Intellectual Property - Overview

An intellectual property rights of an individual or company may be protected in several ways. The most common of these are:

• A Patent protects an idea and provides a right to exclude others from making, using, selling, or importing the idea for a specified period from the filing date. Patents are issued in different countries and apply only to that country.  A U.S, patent is the grant of a property right to the inventor. In the U.S, the term of a new patent is generally 20 years from the date on which the application for the patent was filed. The patent grant provides the right to exclude others from “making, using, offering for sale, selling or importing the invention in the United States.  In Procurement, if you purchase a product that infringes the patent rights of the owner of the Patent, your company could be liable to the original patent owner for that infringement and the original patent owner could seek injunctions against your use of the infringing product.

• A Copyright protects a particular expression of an idea from copying. Copyrights are similar to patents in that copyrights may be issued in multiple countries. A copyright is the exclusive right of the author or creator to print, copy, sell, license, distribute, transform to another medium, translate, record or perform or use. For distributed or published works, a copyright notice should be affixed stating the word copyright, copy or ©, with the name of the creator and the date of copyright (the year of first publication).. While authors normally have the copyright to their works there is an exception. That is when the work is made "for hire". In that situation the author does not own the copyright, the copyright will owned by the party that commissioned the work. In certain countries authors of copyrighted works may also have what’s called “moral rights” in their works. Moral rights include the right of attribution and the right to maintain integrity of their work from anything that may detract from the author or artist’s relationship with the work. In Procurement if you are having something created by a Supplier, you want to own the copyright so if you need to make changes, additions or event translations, you don’t need to hire the Supplier to do them. See the Intellectual Property - Work for Hire blog that deals with copyrights.

• Trademarks identify the source of a good or service and are used to eliminate consumer confusion. For example a Company’s name, and a product’s brand name will usually be trademarked. A trademark is a word, name, symbol, or other device that is used in trade with goods to indicate the source of the goods and to distinguish them from the goods of others. A servicemark is the same as a trademark except that it identifies and distinguishes the source of a service rather than a product. The terms “trademark” and “mark” are commonly used to refer to both trademarks and servicemarks. Trademarks or Servicemarks are commonly used by companies in their “branding: of their products. General Motors, and Chevrolet would be branded as a trademark Their individual lines may also be branded as a trademark. Whereas, “Mr Goodwrench®” would be a service mark. Trademark and Servicemark rights may be used to prevent others from using a confusingly similar mark or name. It doesn’t prevent others from making the same goods or from selling the same goods or services under a clearly different mark In procurement you seldom deal with trademark issues. The exception may be when using a Supplier’s trademark will provide value to the Buyer’s product. For example PC makers that have “Intel Inside” stickers on their product needed to have a trademark license from Intel to use their trademark.  

Patents and Trademarks or Services Marks require governmental filings. Copyright may include governmental filings but filings are not required unless the law of the jurisdiction requires them.
Trade secrets only require management of the information as secret.

• A Trade Secret protects an idea in perpetuity until it has been disclosed by the company without being protected. For example, information about an unannounced product would be protected as a trade secret. Once that product is being sold, a competitor could purchase and tear it down to see how it was made and the use of that information would not be protected.  For something to remain a trade secret the owner must take actions to manage the secret nature of it such as by using confidentiality or non-disclosure agreements if it will be disclosed to a outside party. Trade Secrets include a number of things such as formula, practice, process, design, etc. used by a business to obtain an advantage over competitors. Trade Secret information when disclosed is referred to as "confidential information". Companies protect their confidential information disclosed to their employees through non-compete and non-disclosure provisions of their employment contracts. For third parties that need or want to have access to the information, companies require the execution of Confidentiality or Non-disclosure agreements.

There are three factors to trade secret information:

1.     It is not generally known to the relevant portion of the public;

2.     It provides an economic benefit to its holder from it not being generally known

3.     Reasonable efforts are used to maintain its secrecy.

Trade Secret information does not give intellectual property rights in the information or afford

protection against another party using it. Unlike a patent, trade secret information is

susceptible to independent development or reverse engineering. Protection also ceases when 

it is introduced into the public domain.  Claims related to Trade Secret information would be 

based in law under breach of contract requirements in any confidentiality or non-disclosure 

agreement or in equity in a claim for misappropriation (wrongful taking) of the trade secret 

information.