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Provisional Patent Applications Provide Lasting Intellectual Property Protection

A provisional utility patent application, as opposed to a non-provisional utility patent application, is not reviewed by a patent examiner at the United States Patent and Trademark Office (USPTO), and therefore will not directly lead to the grant of a patent. So, why do we care?

Often entrepreneurs launch their startups with a concept or a prototype of an innovative product. Their business goal is to commercialize the invention. Before the product is ready to be introduced to consumers or an interested acquirer, it has to go through a stage of commercial viability testing or technical improvements. During this period of time, startups face the dilemma of how to protect their intellectual property (IP) assets with limited capital and human resources. The decision whether to file a costly non-provisional patent application is complicated by uncertainty about the patentability of the invention, a patent’s added value to the startup and the commercial prospect of the product. Under this scenario, a provisional patent application is a sensible alternative providing benefits that a non-provisional patent application may or may not have.

Priority Date

Currently the US adopts a first-inventor-to-file system in regard to right to patent. Without patent protection, an invention is subject to the risk of being copied or claimed by another party. Available to utility and plant patents but not design patents, a provisional patent application can be used to establish the priority date of an invention, the same as a non-provisional patent application. The priority date is the earliest filing date of a patent application and used to determine the right of priority over an invention through prior art search and obviousness examination. If a non-provisional patent application is filed within one year after the filing of a provisional patent application, the non-provisional patent application can claim the benefit of the priority of the provisional patent application filing date. Startups may use the one-year grace period to research the market potential for or make further improvements to their product. In addition, startups may file multiple provisional patent applications and claim the priority dates of all of them in a single non-provisional patent application.

One requirement for the priority date claim is that the later filed non-provisional patent application must be adequately supported by the description in the provisional patent application. Also, a provisional patent application cannot claim the benefit of the priority date of another provisional or non-provisional patent application. On the other hand, the patent term of a utility or plant patent is based on the earliest filing date of a non-provisional patent application.

Patent Pending Status

The filing of a provisional patent application will allow startups to use the status label “patent pending” to describe their product, the same as a non-provisional patent application. The “patent pending” status not only will afford IP protection to the invention, but also may carry advantages in various business undertakings such as marketing, venture capital financing, valuation of the company, and deterrence of potential competitors.

Cost

The cost of filing a provisional patent application is much lower than that of a non-provisional patent application for several reasons. First, since a provisional patent application is not examined, it will not incur USPTO fees in prior art search, patent examination and communications. The basic filing fee is low. For example, the electronic filing fee of a provisional utility patent application for a small entity, such as a business organization with fewer than 500 employees, is only $70.

Secondly, the examination process of a non-provisional patent application usually entails back-and-forth communications between the USPTO and attorneys that could drag on for a couple of years and result in significant attorney fees. In total, the process of obtaining a patent may cost up in the tens of thousands of dollars. Finally, entrepreneurs will have to spend time and energy working with attorneys throughout the patent examination process. All of this may strain the capital and human resources of an early stage startup.

Scope of Disclosure

Different from a non-provisional patent application, a provisional patent application does not have to include any claims, which makes it simpler to write and easier to avoid the problem of narrow characterization. A claim defines the scope of protection and therefore tends to limit patent right to an invention. If the claims are written in overly narrow terms, competitors may be able to design around a patent making it unenforceable. Therefore, it is generally recommended to use broadening statements and alternative languages in patent application drafting.

A recent ruling, The Regents of the University of California (“UC”) vs. The Broad Institute (“Broad”), from the Patent Trial and Appeal Board (PTAB) of the USPTO illuminates the importance of the scope of disclosure in patent applications to an inventor’s right to patent. This dispute involves a genome-editing technique called CRISPR-Cas9. The CRISPR-Cas9 system, similar to a cut and paste tool in a word processor, may be employed to modify the genome of an organism by permanently deleting dysfunctional genes or inserting beneficial ones, thus holding enormous potential for applications such as developing therapeutics for intractable human diseases or pest-resistant plants.

In this case, UC’s non-provisional patent application, which was filed earlier than Broad’s and based on four provisional applications, described the CRISPR-Cas9 system in prokaryotes−single-cell organisms without cellular nucleus, such as bacterium, while Broad’s patents demonstrated CRISPR-Cas9 in eukaryotes−multicellular organisms such as humans, animals and plants. PTAB declared that the two parties claimed distinct subject matter in their disclosures. Given CRISPR-Cas9’s potential in changing the landscape of biomedical innovation and both parties of this dispute have established startups to commercialize the technology, the PTAB ruling was widely considered a huge win for Broad.

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Why Do Technology Startups Need IP Assignment Agreements?

If you are considering forming a startup, an intellectual property (IP) assignment agreement will be crucial for your company, especially if your company wants to get financing from outside investors in the future. An IP assignment agreement is a contract that transfers an individual’s rights to an intellectual property (for example, patent, trademark, copyright, etc.) to another legal entity, such as a company. You and your colleagues may want to ask: why do you need to transfer your intellectual property rights to your company?

 

What are the consequences for not having an IP assignment agreement?

If individual inventors do not assign the IP rights to the company, it will be very difficult for the company to seek investment in the future, because an investor will not fund a company that does not have the complete ownership of its intellectual property assets. Therefore, the IP assignment agreement will be a key document that the investor will look for before deciding whether she will fund the company.

Imagine two inventors jointly own a patent. An obvious concern for potential investors is whether this patent can be effectively protected against infringement. However, if the patent is involved in patent infringement litigation, both co-owners must join the lawsuit so that the suit can be filed. Either owner’s lack of interest in joining the litigation will make the patent meaningless because the patent can be easily infringed. In contrast, if a sole owner, the company, owns the patent, the company itself can bring this suit. This is easier for protecting the patent because the company does not need to get every owner’s consent to bring the suit.

Additionally, the value of the patent will be diluted if it is jointly owned by several owners. Each co-owner of the patent can independently exploit, without consent of, and without accounting to, the other co-owners. Because a license is available from more than one party, its value is inevitably diluted. Otherwise, if a potential licensee wants to get an exclusive right to the patent, it must negotiate with all owners, and the holdout problem (where one party’s withholding of support prevents a deal) is likely to occur.

 

What provisions need to be included in an IP assignment agreement?

Because the IP assignment agreement is critical to a company, the agreement should be drafted by a lawyer. Both the Assignor (e.g., the individual developer) and the Assignee (e.g., the company) must carefully review the provisions in this agreement. The most important sections of an IP assignment agreement are:

Assignment of Intellectual Property. This section describes the assignment and acceptance of the intellectual property. If the Assignor agrees to assign the intellectual property in exchange for a consideration, either in the form of cash, equity or royalty, the consideration needs to be clearly identified in the agreement.

Description of the Assigned Intellectual Property. The agreement usually includes a full description of the intellectual property or refers to an exhibit that describes the intellectual property. Notably, the to-be-assigned intellectual property sometimes includes goodwill, which is the intangible value of the intellectual property. The assignment of trademark’s goodwill is particularly important because it includes the brand’s reputation and recognizability.

Warranty. It is especially important to have the Assignor warrant that she has the capacity to assign the intellectual property. Otherwise, the assignment may not be effective.

An IP assignment agreement is crucial for showing your startup’s future investors that the company possesses valuable intellectual properties. Therefore, soon after your company is formed, remember to ask everyone who may have a right in the intellectual property, including inventors, employees, independent contractors and so on, to sign the IP assignment agreement.

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How to Strengthen your Chances of Registering a Trademark

When you see two golden arches that form the letter “m”, your mind probably jumps to McDonalds. That world-famous logo was successfully registered as a trademark, and has served as a way for consumers to recognize the source of the product ever since.

Registering a trademark has many advantages. Registration can discourage other companies from using a similar mark, because the registration makes it easily searchable to the public, in effect deterring them. In addition, future applications of similar marks will be refused registration, as the United States Patent and Trademark Office (USPTO) is required to cite existing registrations against new applications. In the event of trademark infringement, the registered trademark holder has the ability to sue for damages.

The application process to register a trademark can be difficult to navigate, but there are a few steps an applicant can take to make it smoother and more likely to result in a registration. If there are registration-barring problems within an application, a trademark examiner employed by the USPTO will respond to the applicant by issuing an “Office action”. Office actions detail exactly what about the application prevents it from being registrable. Often, the reason for rejection is the genericness or descriptiveness of the mark.

Trademarks are categorized by their ability to identify a source, on a scale of distinctiveness. The four classifications of distinctiveness are: 1. Arbitrary or fanciful, 2. Suggestive, 3. Descriptive, and 4. Generic (in descending order). The more distinct a trademark is, the more likely it is to be registered. Beginning from least distinctive, a generic mark is one that obviously describes whatever the product itself is. For example, if the product was a table, a generic mark for the product would also be “table”. Trademark law does not permit generic marks to be registered, and they can never be distinctive.

A step up from generic marks are descriptive marks. These require only a little bit of imagination from the general public to figure out what the product is. An example of this would be “Sweet and Salty” to describe a trail mix with sweet and salty components. Descriptive marks only meet the registrable standard of distinct if they have acquired secondary meaning. Secondary meaning refers to when consumers recognize the mark as the source indicator. Examples of descriptive marks which have acquired secondary meaning are “Windows” and “Sharp”.

Suggestive marks are inherently distinctive, and can be registered as trademarks. They require the public to make some imaginative leap between the mark and the advertised product. Examples of famous suggestive marks are “Playboy” and “Coppertone”. Finally, there are arbitrary or fanciful marks. These are inherently distinctive as well, and have the strongest chance at being registered. Arbitrary or fanciful marks give the consumer no obvious relationship between the mark and the product. “Kodak” and “Apple” are examples of arbitrary and fanciful marks that have been successfully registered.

In accordance with these categories, an applicant has a greater chance of being successfully registered if the mark is strong, requiring more imagination from consumers to determine what the product is.

Another way to minimize road blocks in the trademark registration process is to start using the mark in commerce as soon as possible. If the mark is already in use, then the application process becomes a bit easier. If the applicant must apply under an “intent to use” rather than a “use in commerce”, they must wait to be officially registered before they can submit a Statement of Use. In addition to that, it is helpful for an applicant to have a specimen of their trademark ready for the application.

A specimen of a trademark shows the USPTO how your trademark has been used in commerce. For standard trademarks in connection with goods, a specimen cannot merely be a drawing or mark-up of the trademark. It must be a real-life sample of how it is used on the goods in commerce. Office actions that are refusals issued on grounds of the lack of a proper specimen, an applicant may overcome responding by submitting a specimen, changing the basis of the application to “intent to use” rather than “use in commerce”, submitting a verification of the specimen, submitting evidence that the specimen was used with the goods, or submitting an unaltered, legible copy of the originally submitted specimen. Of course, submitting a proper specimen at the outset is the best way to avoid this extra hurdle.

Finally, the simplest way to ensure a clean application process is to submit a thorough and accurate application. Applicants may want to first print out a PDF version of the application and make sure they have all the fields accurately filled out and answered before trying to register their mark on the UPSTO website just to be sure to catch any oversights before the examining attorney does. Some fields to pay attention to are the correct classification of the goods or services, the submission of a specimen, or the adding of any disclaimers for the mark.

These three steps: choosing a strong mark, having a valid specimen available, and carefully answering the questions on a trademark application, are all simple ways to reduce the number of Office actions the USPTO must issue before the trademark can be properly registered. With these techniques, applicants can be well on their way to registering a trademark to officially protect their brand.

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“We Don’t Have Any Intellectual Property”: Responding to a Common Startup Misconception

Whenever we meet with a new or potential startup client, one of the questions we always ask is what intellectual property the company has that it might want to protect. Frequently, entrepreneurs will respond with “we don’t have any intellectual property.” However, more often than not, this is not the case. This post aims to help an entrepreneur to begin thinking about the valuable intellectual property that her company may possess. It serves as an overview of all of your company’s assets that may fall under the “intellectual property” umbrella, and which you might be able to protect.

 

Patent

The first type of intellectual property that comes to mind for most entrepreneurs is the patent. Patents generally protect the following types of inventions:

  • Processes
  • Machines
  • Improvements
  • Composition of matter
  • Plants (asexually reproducing)
  • Designs (ornamental designs, separate from functional elements)

Patentable inventions must be useful, novel, and nonobvious. There is no patent protection for laws of nature, natural phenomena, or abstract ideas. This means that algorithms, especially purely mathematical ones, may not be patentable.

 

Copyright

Copyright protects literary and artistic expression that exhibit a modicum of originality and that are fixed in a tangible medium of expression. These literary and artistic expressions that may be eligible for copyright include:

  • Books, poetry, dramatic works
  • Music
  • Dance
  • Computer programs — both the underlying code and the interface
  • Movies
  • Sculptures
  • Images, paintings, drawings, photographs
  • Designs
  • Architectural works

Note that ideas that underlie a work are not copyrightable. Instead, they may fall under the umbrella of patent. Additionally, functional elements of anything are not copyrightable.

 

Trademarks

Trademark is another aspect of intellectual property law that you have likely heard a lot about. What you may not know is what exactly trademark law can protect. Under the federal trademark statute – the Lanham Act – words, symbols, and other attributes that serve to identify the nature and source of goods or services can be protected by trademark. The following marks may be protectable under trademark law:

  • Company names
  • Product names
  • Symbols
  • Logos
  • Slogans
  • Pictures or designs
  • Product configurations
  • Product design or trade dress
  • Colors
  • Smells

The limit here is that, to receive trademark protection, the mark needs to identify to consumers the source of the good or service it identifies. In other words, it must call your company or its goods or services to mind. Additional limits include that the mark must not be a generic description of the good or service or the class of goods or services, and that the mark cannot be a functional element of the product.

 

Trade Secrets

Trade secrets are information that adhere to the following three rules: the information (1) is not generally known to or reasonably ascertainable by the public, (2) confers to your company an economic advantage (meaning the secrecy confers the value, not just the information itself), and (3) is subjected to reasonable efforts by your company to maintain its secrecy. Trade secrets can include business or technical information of any sort. This means that things eligible for trade secret protection may include:

  • Formulas (chemical)
  • Recipes
  • Data
  • Methods or techniques
  • Processes
  • Business plans (e.g. product plans, sale and marketing plans, business strategies)
    Customer lists (current, past, and prospective)
  • Supplier lists
  • Pricing, price lists, pricing methodologies, profit margins
  • Market studies
  • Computer software and programs (including object code and source code)

Any information that meets the above three criteria can be protected under trade secret laws. The above list is not inclusive of all things that may qualify as trade secrets. Note that independent discovery or invention, as well as reverse engineering, of the information contained in your trade secrets is not prohibited under this regime.

 

Why Is This Important?

Intellectual property can be one of the most valuable assets to your company.

Disney’s stories and characters are protected by copyright. Nike’s famous swoosh logo and “just do it” slogan are protected by trademark. Trademark also protects the iconic red of the soles of Louboutin shoes. Coca Cola’s Coke formula is one of the most heavily guarded trade secrets. The curved designs of Apple’s Macbooks and iPhones casings are protected by design patents. Think of where all these companies would be without their intellectual property and the regimes that protect it.

Identifying your intellectual property is your first step to protecting and monetizing it. Whether this means filing a federal application, maintaining a trade secret, or simply asking founders and workers to assign to your company intellectual property they have created, this can be one of the most important parts of your business. So go ahead and start keeping track of assets that may qualify as intellectual property.

 

Conclusion

 For a lot of this, there is a much deeper analysis of whether your particular work, mark, or invention is actually protectable under one intellectual property regimes, to what extent, and how to go about acquiring and maintaining such protection. For more details about those analyses, consult with other posts on this blog, or an attorney.

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Protecting Corporate Intellectual Property

Intellectual property is a critical asset in many startups, especially technology startups, and often provides the foundations for the value proposition of the business. As a result, it’s very important to ensure that this intellectual property belongs to the company and not to various founders, employees, contractors, or any other contributors.

 

There are numerous potential negative consequences that can occur when intellectual property isn’t adequately protected. For example, situations can arise where an individual informally yet intimately involved in the company leaves without ever transferring the intellectual property he or she has contributed. Even where an individual’s relationship with the company was formal and agreed upon in written contracts, if intellectual property is not properly assigned, the company may not own it. Both situations, along with a myriad of other possible scenarios, can result in costly litigation. Long, expensive legal battles over intellectual property can easily destroy a young company that often can afford neither the actual cost nor the corresponding damage to the company’s reputation, especially because relationships are so often critical to a startup’s success. There is also always the possibility that the company will ultimately lose in litigation, and the loss of critical intellectual property components can seriously damage a company’s value.

 

While it’s important to engage legal counsel to aid in protecting your company’s intellectual property, it’s still valuable to understand the basics as an entrepreneur. This post will describe a few of the basic notions central to the protection of intellectual property protection:

  • Intellectual property assignment
  • Proprietary information and inventions agreement (“PIIA”)
  • Works made for hire
  • Shop rights
  • Licenses

 

Intellectual Property Assignment:

A first step is often ensuring that all intellectual property created prior to these measures is affirmatively assigned to the company. Here, it’s important to think critically about who may have contributed any type of intellectual property. Beyond standard technology, consider anyone who might have contributed to the development of trade secrets, a designer who helped with a logo, or even someone who came up with the company name or slogan. If all the people involved in creating any form of intellectual property do not sign an assignment, then there are already gaps in your company’s foundation.

Once you determine who needs to sign an assignment, it’s important to make sure that the scope of the assignment includes the specific variety of intellectual property that you want assigned and that the correct legal words are utilized to make the assignment valid. These are points you should always be sure to confirm with legal counsel.

PIIA:

It’s also important to ensure that any intellectual property developed forward is retained within the company, and PIIAs can often help meet this goal. PIIAs include language constituting a nondisclosure agreement and provisions assigning intellectual property created during a specified term (commonly the term of employment) to the company. The breadth of the intellectual property that a PIIA covers is typically up to the drafter, and it will be important to discuss with counsel what you intend to accomplish with any PIIAs that you request. Some PIIAs can even assign ideas conceived by individuals during the term of their employment.

Works Made for Hire:

Some specific types of intellectual property are protected by the works made for hire doctrine under copyright law. This is a complicated doctrine, and is often less useful than anticipated by entrepreneurs. It only protects works that are created in a “fixed form,” and only applies to specific items. Moreover, it only applies to works created by employees or works specially commissioned and only in very specific circumstances. Because intellectual property protection under this doctrine is so scant, it’s best not to rely on it and to have other protection mechanisms in place.

Shop Rights:

Shop rights occur when intellectual property is created by an employee and applies to inventions or patents. This right is not codified in law, but is an equitable judge-made solution for instances where an employee utilized an employer’s resources in creating an invention but never assigned ownership to the employer. This right is similar to a non-exclusive, no-cost license; the company can use the invention without paying any fee to the former employee, but has no ownership rights and cannot prevent anyone else from using the invention. While shop rights can somewhat protect your business model because you are not at risk of losing a critical invention, they cannot protect you from competitors.

Licenses:

Licenses can also be a useful tool to gain access to more intellectual property that was not created within the company. There is often open source code available for use in software, and using these usually entails some type of license agreement. Licenses are also useful in obtaining freedom to operate if your company’s invention is not useful without utilizing the invention of another entity.

 

In general, it’s important to establish measures to protect your intellectual property early. Many founders don’t like to spend time on this because it doesn’t typically have an effect in early day-to-day operations of the company, but it can make an enormous difference down the line if this framework is or isn’t in place in the event of a dispute. More importantly, it is very difficult if not impossible to remedy weak intellectual property protection once a dispute has already arisen.

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University Trademarks and Leveraging the Brand

Many student entrepreneurs want to use their university's brand as part of their product.

Many student entrepreneurs want to use their university’s brand as part of their product.

It is a well-known fact that universities foster innovation and entrepreneurship. But what happens when you want to incorporate your university’s brand into your startup concept?

It is time to consider trademark law.

Trademark Basics

A trademark is a word, phrase, symbol, and/or design that identifies and distinguishes the source of the product and seeks to prevent consumer confusion. Universities register trademarks in an effort to protect their brand, maximize revenue and maintain control over the way their trademarks are presented to the public.  Universities are some of the most diligent institutions when it comes to protecting their marks. They usually have significant resources dedicated to seeking out infringements. Therefore, before leveraging the brand of the university, it is especially important to take preventative measures and understand what is available for use.

Acquiring Trademark Rights

Trademark rights may be acquired in either of two ways:

  1. Common Law- rights are acquired through the use of the mark in commerce
  2. Registration- rights are acquired by registering with the USPTO

The following symbols may be used with trademarks, although they are not required for one to claim trademark protection:

™ symbol indicates an unregistered trademark

® symbol indicates a registered trademark

This prior post provides more information on the trademark registration process.

University Trademarks

A university can acquire rights to more than just its name and logo; colors are also protectable. Courts have decided that specific color schemes, whether registered or not, are so related to the university that they develop a “secondary meaning.” At which point, customers would likely identify the university as the source of the product. This, along with other factors including medium, sales, advertising and intent, determine if the university has trademark rights to its colors. Universities have recently gotten more creative with colors and trademarked the distinctive name of the colors or the colors in association with other objects.

Many schools will have a website that outlines their expectations regarding the use of their trademarks. Often, you will need to request permission from the university and include a detailed explanation of your plans for the mark. Approvals are granted depending on the applicant, often more favorable to students, alumni, and faculty. The university will also consider how the mark will be used (if it is commercial in nature) and the medium for its display.

Information regarding the use of the University of Michigan’s trademarks can be found here.

It is a good idea to consult your university before making decisions about using their brand as part of your startup product or service.

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How to Win the Name Game

Selecting a strong brand might be more difficult, yet more important, than you anticipate.

Selecting a strong brand might be more difficult, yet more important, than you anticipate.

What’s in a name? As Shakespeare once said, “That which we call a rose by any other name would smell as sweet.” And it is true that the success of a start-up is ultimately determined primarily by the quality of its value proposition and its ability to execute rather than its name. But names are still very important. If they weren’t, we wouldn’t have trademark law to protect names and creative firms wouldn’t be able to charge exorbitant fees to come up with great names.

While a start-up’s value proposition may be strong, if other start-ups have the same or a similar idea, whoever can get their name out there to the most people first often wins. If a start-up chooses a name someone already owns, they may need to change names late in the game, leading to potentially drastic setbacks, as they rebuild name recognition and combat customer confusion. Choosing a bad name can signal many things—not only to customers but also to potential investors. A bad name can signal a lack of self-awareness and diligence, and poor attention to detail, among other bad traits. Investors who hear a pitch for a start-up with a terrible name may have thoughts like, “If they didn’t realize their name was bad, what else won’t they realize? What else won’t they pay attention to? What else is wrong with this company besides the name?” These are thoughts you want to avoid. In short, the quality of a name can be a proxy for the quality of the team behind it.

Moreover, a solid, catchy name can create brand-building power. We often use the best names of companies as verbs. We Google things, we Facebook people, we blow our nose with a Kleenex, we Xerox things, we Uber to places, etc.   Every time someone uses a company name in this manner, the company gets free publicity. Having this universal recognition does not come without a good name. Below are some tips on how to brainstorm name ideas and then some rules of the road for what to do once you have your name.

Brainstorming

Often one of the hardest parts of starting a business is coming up with a name. It seems easy at first but after staring at a blank sheet of paper for hours, many entrepreneurs grow frustrated and either settle for a bad name or hire someone else at significant cost to come up with a name for them. A proper brainstorming process can solve these problems and help you come up with many strong name ideas.

  • Make a list of words/names that relate to your product or value proposition. Use a thesaurus to find related words.
    • Example: If your business is a financial services application, you might list words like coin, blue chip, money, cash, banking, finance, etc. Then, use a thesaurus to find less common, but more interesting or catchy words.
  • Use foreign words. Foreign words can evoke positive responses by lending an exotic, new, and fresh sound to your name. Take the list of words related to your business and try translating some of them into other languages.
  • Always be listening. Things may come up in daily life that inspire the perfect name. Jot down ideas as they come up in a simple journaling or note-taking mobile application.
    • Example: The company, Caterpillar, found its name when a photographer was taking a picture of a tractor and remarked that the tractor crawled like a caterpillar.
  • Make up Words. Using made up words can help your company stand out. Try combining words, changing the spelling of words, and simply creating words that sound catchy.
    • Example: The name Kinkos was created because the founder had very curly hair with lots of kinks.

Rules of the Road

 Coming up with a good name early on can save you a lot of headache down the road. Avoid the pitfalls of many entrepreneurs by following these rules:

  • Keep it short. Twitter, Facebook, Nike, Pixar, eBay, Google, Apple, Kinkos—what do these iconic names have in common? They are all two syllables long. Try to keep your name to two syllables or less. This will maximize its repeatability and memorability.
  • Keep it punchy. What else do the above names have in common? They make use of strong consonant sounds. This will help the name to stand out in conversation and stick.
  • Never make your move too soon. Once you have a list of names, spend at least a week mulling over the options. The best names will be remembered without you having to go back to the list. The proof is in the pudding.   The names that you remember are likely the better names. If it sticks in your mind, it will be more likely to stick in the minds of others and this “stickiness” is exactly what you should be after.
  • Get quality feedback. Try to do more than simply ask close family and friends for feedback. It will be hard for them, if not impossible, to avoid bias. Test the names out on random people and see how they react. Ask them questions to see what they think about the names and what responses the names evoke. Record your findings and analyze them.
  • Make sure the name is available. Cover your bases by conducting appropriate searches including trademark searches via the US Patent Office and company name searches via your state incorporation website.

A rose by any other name may smell as sweet. But what good is the rose if no one gets to smell it? A great name can help propel your business or product through the early stages and contribute to the likelihood of survival. After you’ve followed the above rules and found your name, it’s time to file a trademark.

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Why Should You Consider Filing A Provisional Patent Application

 

Provisional patent applications can help entrepreneurs beat the clock by establishing important filing dates

Provisional patent applications can help entrepreneurs beat the clock by establishing important filing dates.                                             Image by opensourceway.

Since March 16, 2013, the United States switched from a first-to-inventor to a first-to-file patent system, which means the first inventor to file an application (but not necessarily the first to invent), gets the patent. As a result, it is important to file a patent application to claim priority over the invention soon after the invention is conceived (i.e. once the inventor has created a definite and permanent idea of the complete and operable invention) and capable of being described. Moreover, having an invention that is patent-pending adds value and credibility to a business, which helps the business seek additional financing.

However, filing a regular patent application (i.e. non-provisional) can be very expensive, ranging from several thousand dollars to over twenty thousand dollars, which is often outside a business’ budget, especially in its early stages. Additionally, a non-provisional patent application is examined by the Patent & Trademark Office and an applicant’s responses to the examiner’s rejections also incur significant legal fees. This is where a provisional patent application can come in handy. A provisional patent application allows you (the inventor) to claim priority to the invention (and claim that you have a “patent pending”) and push off some of the costs associated with a non-provisional application.

What is a provisional patent application?

A provisional patent application is a temporary patent application that includes the specification of the invention, including sufficiently detailed description and drawings to allow another to make and use the invention. The drawings can be hand-drawn or computer-created (though the latter may be better for business reasons). Moreover, the applicant does not need to draft any patent claims. Because there is no examination of the patentability of the provisional application at the USPTO, the filing fee is relatively low – $65 for micro entities, $130 for small businesses, and $260 for all others. Although ultimately you will need to file a non-provisional patent application in order to obtain a patent in the United States, the provisional application allows you to (1) have an effective filing date that a later non-provisional patent application, filed within 12 months, can claim priority to and (2) say that you have a “patent pending”, which can add more value to your business.

What are the benefits of applying for a provisional patent?

One of the key benefits of a provisional application is that it has few formal requirements, which can translate to a lower cost of obtaining early protection for your invention. As mentioned above, a provisional patent application does not require disclosing any patent claims. Because there is no examination process, an applicant will not have to incur legal fees in responding to “office actions” until after a non-provisional application is filed.

A related benefit of the provisional application is that it allows you to delay filing a non-provisional application for 12-months. A successful and valuable invention is often a work-in-progress, and this grace period can be very valuable for evaluating the merits of the invention and making improvements. While aspects of your invention may be sufficiently concrete and detailed for you to seek protection for, there are still parts that you may want to research and develop. One flexibility to a provisional application is that when you file a non-provisional application, you can claim the priority to multiple provisional applications so long as they are within the 12 months prior to your filing date. In other words, you can combine multiple iterations of your invention into a single document, which is beneficial if you’re still in the processing of developing and perfecting your invention.

In addition, this 12-month grace period can be especially helpful for small entrepreneurs or businesses that do not have the funds upfront to afford filing a non-provisional application. As mentioned earlier, the cost of filing a provisional application is relatively low, especially if you qualify as a micro-entity. Provisional applications allow you to immediately establish a filing date for your invention and to begin promoting and seeking additional funding for your invention without the worry that by disclosing your invention to others, you may lose your claim to your invention. Because the “novelty” of your invention is generally judged as of your filing date, this early filing date can have enormous benefits. By filing a provisional application (and within 12-months, the non-provisional application), if a patent is issued, you can claim priority to the date you filed the provisional application and exclude others from making, using or selling products that embody your invention.

What are the risks of filing a provisional patent application?

While a provisional patent application does not require many of the formalities (such as patent claims or formal drawings) of a non-provisional application, it still must be drafted with care. The provisional application must sufficiently enable and describe the invention that you will later claim in your non-provisional application. If the provisional application does not provide adequate description to enable the claims in non-provisional application, the claim will not be able to benefit from the provisional filing date. As a result, a public disclosure after the filing of the provisional application but before the filing of the non-provisional application could invalidate the claims. For more information about the risks of filing a provisional patent application, see our prior post on the risks of filing a “cover sheet provisional” application.

What are the next steps after filing a provisional patent application?

One important point to keep in mind is that filing a provisional patent application is just the first step towards obtaining protection for your invention. Ultimately, you still need to file a non-provisional patent application to obtain a patent, and to take advantage of the earlier filing date of the provisional application, you must file a non-provisional application within 12-months. Thus, if you’re planning on referencing multiple provisional applications, the critical date you want to file your non-provisional application by is 12-months from the filing date of the earliest provisional application to which you want to reference.

Lastly, so long as you do not run afoul of any of the statutory bars (e.g. offering to sell the invention or publicly disclosing the invention), even if you cannot file a non-provisional application within 12-months and claim priority to it, it will not cause you to lose what you have disclosed in your application because the provisional application is not published.

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What’s in a Name? (According to the App Store)

Startups should confirm that their product name does not have any conflicts with other app names.

Startups should confirm that their product name does not have any conflicts with other app names.

Picking a product name may be one of the hardest tasks faced by a mobile app startup. The ideal name is one that seizes people’s attention and stays in their memory, conveys some desirable quality of the app, and—despite an increasingly crowded marketplace—steers clear of infringing other companies’ trademarks. That’s a lot of boxes to check. Startup founders may have to rely on their own creativity to come up with a memorable and evocative name, but they can mitigate the risk of committing trademark infringement by following a few concrete guidelines. This article briefly discusses these guidelines for a startup seeking to release an app in Apple’s App Store.

Trademark Basics and Searching Registered Marks

Trademark law prevents one from using a mark (such as an app name) that is likely to cause customer confusion with an existing mark. Additionally, Section 8.5 of Apple’s App Store guidelines for developers says simply: “Apps may not use protected third party material such as trademarks, copyrights, patents or violate 3rd party terms of use.” This means that Apple, through its own guidelines, has the ability to enforce what it perceives to be the trademark rights of others. That raises the question of whether your app uses another’s trademark.

As covered in previous posts, trademark protection can be acquired through registration with the USPTO or through use in commerce. Founders should check both avenues before committing to a name. The first step simply involves searching USPTO’s Trademark Electronic Search System to see what else is already registered under the proposed name.

Testing the Waters

Sometimes people don’t register with USPTO, but they might still enjoy trademark protection. To determine whether protection has been acquired through use in commerce, an app developer seeking to release an app should search the App Store. This is actually less intuitive than it sounds because Apple separates content in the App Store by device. The easiest way to run a comprehensive search is to go to the iTunes Content Dispute page, and provide your contact information to log in (it doesn’t have to be real if you don’t actually intend to submit a complaint). This takes you to a page (as shown below) with a drop down menu from which you can select iPhone apps, iPad apps, and Macbook apps to search the App Store for each device.

Running a comprehensive search of the App Store can be less intuitive than it sounds because Apple separates App Store content by device.

Running a comprehensive search of the App Store can be less intuitive than it sounds because Apple separates App Store content by device.

You found a similar name. Now what?

Even if a prospective name has been registered or is in use on the App Store, a founder might still be able to go forward with it. Courts apply a standard based on the “likelihood of confusion,” considering factors such as similarity of product/service, strength of the prior user’s mark, etc. So for example, if a founder wanted to use the name “Wizard” for a mobile gaming app, a company which has registered the trademark “Wizard” but is in the construction industry will probably not have a good claim since their product/service is not similar. Similarly, a developer will likely have less risk if it uses a highly descriptive name (for example “storefinder” because anyone else using a similar mark for a similar purpose would likely not have strong trademark rights, if any.

There are several risks associated with using a similar name to an existing app, including:

  • Apple may decline to place your app on the App Store citing Section 8.5 of its Guidelines if it believes your app is using another’s trademark;
  • the owner of the similar mark may complain to Apple and cause Apple to remove your app from the App Store;
  • the owner of the similar mark may seek to enforce its trademark rights directly against you (for example, by sending a cease and desist letter, opposing your trademark registration, or pursuing litigation); and
  • consumers mistakenly downloading your app (seeking the other app with the similar name) may cause havoc with your conversion metrics.

Apple delaying or denying an app’s placement on the Apple Store, or removing your app from the App Store in response to a third party complaint is of particular concern. Apple might be incentivized to err on the side of caution. For example, in response to a complaint, it is easiest for Apple to verify that two apps are similarly named and remove the latter app. It would be costly for them to analyze the “likelihood of confusion” factors for each case that gets brought to their attention. So developers run the risk that Apple can remove their app even if they are legally in the clear with regards to a trademark.

So what’s a founder to do? If the founder has identified sources of risk through TESS or the App Store, s/he should assess the size of the risk. How active and successful are the other companies? Are multiple people operating under the same or similar names? How similar are the other products/services? More often than not, it is best for founders to avoid the numerous problems posed by similarly named existing apps. If a founder continues to see significant value in a chosen app name, despite the existence of an app with a similar name already on the App Store, an experienced trademark attorney can help to quantify and suggest steps to mitigate the risk.

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Trademarks in National Parks

A looming trademark dispute involving our national parks illustrates the importance of clarifying trademark ownership.

A looming trademark dispute involving our national parks illustrates the importance of clarifying trademark ownership. Photo by David Liff.  License CC-BY-SA.

Like the giant sequoias, there is a trademark dispute rising out of Yosemite National Park. Delaware North, a concessions powerhouse, has operated the hotels, restaurants, and other concessions in Yosemite since 1993. Their contract is set to expire in 2016, and as other firms line up to bid on the new contract, Delaware North has made clear to the Park Service that it claims to own the intellectual property in the names of famous sites like the Ahwahnee Hotel and Curry Village. The National Park Service disputes this claim, and says that the names, which historians suspect have been in use for over 100 years, belong to the American people. Delaware North claims the IP is worth $51 million, and says it will seek that amount if the Park Service wants to use the names without Delaware North’s permission.

Background on Trademark Law

The situation implicates some core issues of trademark law and serves as a good trademark primer for entrepreneurs unfamiliar with the field. Words, phrases, logos, and other designators of a product’s source are granted protection under federal law via the Lanham Act. While registering a trademark with the federal government grants certain protections and other benefits, one does not need to register a trademark for protection to exist. For both registered and unregistered marks, trademark protection is gained through use of the mark in commerce in a way that serves as a source designator. While registering a mark gives the registrant nationwide priority to the mark over subsequent users, the first user of any mark has rights to it, registration or not, given certain geographical and industry limitations.

Delaware North’s Potential Trademark Rights

Delaware North acquired the trademark registrations from the company from which it bought the Yosemite properties. Delaware North subsequently sold the properties to the National Park Service, but retained assets like furniture, vehicles, and as Delaware North argues, the IP) and began running the concession for the Park Service. Delaware North’s ownership of the registrations in the park properties, however, is not conclusive as to the marks’ rightful owners. As the National Park Service points out, if another party used the mark as a source designator before the registration, they could have rights in the mark. While a party that has not used a mark for more than three years is generally considered to have abandoned the mark, Delaware North should not expect the Park Service and other interested groups to give up easily.

Lessons for Entrepreneurs

The takeaway for entrepreneurs is that trademark rights can become extremely valuable and it is of the utmost importance to establish whether or not you have rights in a mark you are using early on. This can be especially important when partnering with third parties. Entrepreneurs should understand that ownership of tangible property does not necessarily mean that rights in related intellectual property are secured. As a product or service is marketed to the public under a consistent brand, the trademark rights in that brand will likely increase in value. Entrepreneurs should ensure that they have the necessary rights in any brand related to their products or services.