Intellectual Property Law and Licensing

Intellectual property (IP) law encompasses the protection a wide variety of property created by businesses, authors, musicians, artists, and inventors. Copyright, trademark, trade dress, trade secret, and patent laws protect intellectual property. IP law protects the property rights of businesses and individuals from infringement, unauthorized use, and misuse. By maintaining property rights, an individual or business can control the use and distribution, including the sale and licensing of such property.

Licensing is a key business strategy because it is a way to gain earnings from inventions and creative works. Licensing is the process where you grant some rights to intellectual property you own to others. It is really a business relationship between the licensor, who owns the IP, and the licensee, who is given the limited right to use it.

Technology licensing by the author or inventor of a new product or technology requires both IP protection and contractual agreements to realize an economic benefit from its production. For instance, the author of a software program or an inventor can grant a license to a corporation that has the resources to produce and distribute the embodied intellectual property.

Copyrights are exclusive rights granted to the authors of "original works of authorship" including literary, dramatic, musical, artistic, and certain other intellectual works, both published and unpublished. To qualify for copyright, the creative work must be original and must exist in some tangible form; it cannot exist only in the author's mind. The owner of copyright has the exclusive right to reproduce the copyrighted work, to prepare derivative works, to distribute copies or phonorecords of the copyrighted work, to perform the copyrighted work publicly, or to display the copyrighted work publicly. Copyrights arise automatically as soon as creative works are made; however, registration affords owners of copyrighted materials additional legal benefits.

A trademark is a word, name, symbol, or 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 service mark is the same as a trademark except that it identifies and distinguishes the source of a service rather than a product. Trademarks allow businesses to protect the symbolic information that identifies the source of goods and services by preventing use of the information by competitors. Trademark rights may be used to prevent others from using a confusingly similar mark, but not to prevent others from making the same goods or from selling the same goods or services under a clearly different mark. To receive protection, a word, name, symbol, or device must be distinctive and must be used in commerce. A trademark need not be registered, but if it is registered the owner of the mark has put others on notice that the trademark is already in use.

Trade dress is a distinctive visual appearance of a product or service that uniquely identifies the product or service to signify the source to consumers, and is similar to trademark. The shape, color, and design of a product or its packaging can be trade dress as can be the design of a building, or the decor and color scheme of a restaurant or store. To gain registration or common law protection under the Lanham Act, a trade dress must not be "functional." That is, the configuration of shapes, designs, colors, or materials that make up the trade dress in question must not serve a utility or function outside of creating recognition in the consumer's mind.

Trade secrets are a class of proprietary information that has commercial value and are "owned" by a business entity. Trade secret laws protect formulas, patterns, devices, and compilations of information from use by unauthorized persons. Protection of trade secrets with other parties is by contract and formal agreements that are legally enforceable by the trade secret owner.

A patent for an invention is the grant of a property right to the inventor for new and non-obvious technologies. A patent gives the inventor "the right to exclude others from making, using, offering for sale, or selling" the invention in the United States or "importing" the invention into the United States for a period of time, usually 20 years. During this time the inventor can profit from the invention by controlling its availability. Patents can be granted for designs of manufactured products, machines, processes, and combinations of matter, and in certain cases for plants and other life forms. A United States patent must be applied for through the US Patent and Trademark Office and issued US patents are effective only within the US, US territories, and US possessions.