Intellectual Property

An Overview On The 4 Main Types Of Intellectual Property

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Before talking about the types of intellectual property, it’s important you fully understand what IP really is. We’ve already covered all the pillars of intellectual property (IP) in our in-depth guide about IP, and strongly advise you to give it a read. If you don’t have time on your hands right now, here’s the gist of it: IPs are all the intangible benefits or assets a company or person has.

As long as you create something unique, or iterate on an already existing process or procedure (and legally register these ideas as yours), you have an IP. IPs can also be bought or sold, becoming the exclusive property of the new owner. Because of this, ideas can be protected through IPR (intellectual property rights). These come in 4 main variants: patents, copyright, trademarks and trade secrets.

IPR serves a dual role. It protects and fosters innovation and healthy economic competition, while also helping consumers choose the best products and services.

What Are Intellectual Property Rights (IPR)?

IPR refers to all the legal measures and regulations that are in place to prevent the unauthorized use of an original idea/creation. Once a company or individual registers their designs, creative works, scientific improvements, computer programs etc, they receive the exclusive rights to use, copy and distribute that IP.

IPR fit into 2 large categories:

  • Copyright is attributed to creative works and original ideas in the arts, culture and entertainment fields; they protect the creator from plagiarism or illicit use of their work
  • Industrial rights are a safety net for companies or individuals, guarding IPs like inventions or scientific/industrial improvements from unauthorized use by third parties; they also inform the customer about what they’re buying and who created those products or services

Why Do Intellectual Property Rights (IPR) Exist?

IP-centric businesses have become more important and prevalent than traditional industries. According to the Global Innovation Policy Center, 45 million Americans are employed in an IP-intensive field, and their income is also 46% higher than those of their counterparts (people in non-IP fields).

This shouldn’t surprise you either, as most economically developed countries are now knowledge based. The search for information, entertainment, and innovation is continuous, and those are the needs that intellectual property satisfies. Art, computer programs, literary works, industrial designs etc; all of these are, in essence, IPs.

The U.S. is also above all other countries in the entire world in its IP’s GPD value, estimated at $6.6 trillion. In other words, the U.S.’s IP-centric businesses generate 38.2% of the country’s total GDP. People which are doing these jobs earn almost 50% more than those who don’t. What’s more, even though IPs aren’t physical products themselves, they also account for 52% of the entire country’s merchandise exports. That’s literally more than actual, tangible items.

IP is also crucial thanks to its wide range of applications. For example, potentially revolutionary automation algorithms for a factory and new drug formulas are both IPs. R&D for the pharmaceuticals industry is actually one of the most in need of patent protection. IPs have also become vital for the discovery, implementation and improvement of green energy sources and farming.

In short, without IPR, there’s no innovation, because there’s no safeguarding for your original ideas. The types of intellectual property rights drive inventors, creators and other bright minds to better the world day after the day. True, they’re at a direct and potential substantial financial gain from doing so, but that’s only natural. After all, they’re investing their time and work into it, and the general public stands to benefit too.

Here are some key takeaways about the importance of IP and IPR:

  • Hundreds of millions of people are employed in IP-centric businesses worldwide, with 40M+ in the U.S. alone
  • IP-centric businesses are predicted to grow much faster in the following years
  • People employed in IP-intensive industries earn (on average) 46% more than those who work in non-IP fields
  • America’s IP alone is worth $6.6 trillion and accounts for 38.2% of the country’s GDP
  • IPR drives innovation and creativity by protecting original ideas that lead to scientific/industrial breakthroughs or cultural enrichment
  • IPR also informs and educates the customer about the final product or service’s quality and reliability

The 4 Most Important Types of Intellectual Property

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Depending on the nature of an IP, it’s going to be protected in a different manner as far as the law is concerned. All 4 of these methods give you or your company sole ownership of your idea, but the terms and conditions vary.

Patents

Used for protecting inventions or process improvements from being used by a third party that hasn’t been given explicit permissions. These are a fairly common IPR method and known by most people. They’re usually handed out by governments for about 20 years at a time, but the timeframe can differ. Patent owners can also license out their unique idea. In other words, they give another party, the licensee, right of use to their patent under the agreed terms of the deal.

After a patent’s expiration date, it becomes public property. Because of this, many companies give their patents a value. The number decreases each year as the patent nears its expiration date. Legally, this means that the company’s income from that patent also lessens, so the taxes for it are lowered too. This is called “amortization” in economics.

Patents can fit into 1 of 3 categories:

  • Utility patents target products, machines or processes that are useful. Think of innovative improvements to an assembly line.
  • Design patents are self-explanatory, but they refer strictly to the design of products. The interior of a car, the shape of a bicycle. Website design (for example) falls into copyright, not patents.
  • Plant patents are important for farming or ecological efforts, protecting new species of plants or interbreeding experiments. They’re for plants that don’t exist because of evolution, reproduction, or other natural means.

Patents creation process

Patents come into being as a result of a need or problem that’s observed. This usually affects one’s organization or industry, but it can also be a wider scale issue, even global. After the idea is set in stone, R&D comes into play to work out all of the details. How exactly will it solve the problem, how much will development take and cost, what resources are needed for production etc. After this is done, a prototype of the product is created.

Extensive internal QA is performed, where the developing team(s) consult with the inventor about the prototype. Does it serve its original goal? Can it be made better? Can it be replicated, distributed or sold easily? All of these questions and more are part of the process, and multiple reviews are common.

If the invention turns out to be everything the organization hoped for, it’ll be deemed patent worthy. This is (arguably) where the most exhausting part begins: paperwork. Back and forth with governmental agencies, patent attorneys, etc. After the (costly) documents are all signed and finalized, the IP is official and protected by law. Maintenance of the IP and potential renewal of the patent down the line is the responsibility of the holder.

Copyright

Now, this is especially important. Copyright doesn’t protect ideas. It protects how an idea is used; how it’s shaped and presented to others, how it’s turned into original work. Superheroes and vigilantes aren’t and can’t be copyrighted, but Superman and Batman are. Musical notes aren’t copyrighted, but songs are. How to program a video game isn’t copyrighted, but video games themselves are, because they’re the original way in which a team intertwined that code to make something. This also applies to writing, painting, sculpting etc.

The author(s) of a creative work have full rights to use, copy and distribute their work, but can choose to sell them to someone else. Copyright lasts for all of the author’s life and for another 50 years (usually) after they pass away.

Copyright creation process

After the finalization of a unique piece of content (characters, songs, paintings etc), which includes its existence in a tangible environment/medium, registration is done at a governmental copyright office. It’s usually enough for the author to go alone, as it tends to be simple and way cheaper than patents. The U.S. even has an online application form for the process.

Trademarks

Instead of protecting products or services, trademarks safeguard their source. Trademarks can be logos, words, phrases, sounds (20th Century Studios drum roll intro), even smells (think of perfumes). Any big brand you can think of (Apple, Microsoft, Sony, Burger King etc) has at least one trademark, the most obvious being their logo. Trademarks help consumers place one product or service into its broader “corporate family” with ease, while also legally protecting it from being replicated or sold by unauthorized parties.

Trademarks also protect a product even if the product itself isn’t patented (think of logos on clothing lines).

Trademark creation process

In order to provide appropriate protection for your brand, trademarks must be individually registered with governmental authorities. You only need to file a request where you stipulate its precise scope, usage, description, and what it’ll be associated with. Having outside or in-house specialized assistance is recommended. With everything being said though, you can actually establish an informal trademark by just using it over and over.

Through free market commerce, your trademark will organically reach buyers and your notoriety will grow. Nothing’s stopping others from using it or even claiming it as their own though, so we suggest avoiding this idea.

Trade Secrets

These are outright competitive advantages that a business has. They represent confidential procedures, processes, formulas, technologies, strategies, information etc. Their safeguarding is important for precisely this reason; if they “get out”, companies risk losing potentially substantial revenue or profit. This also makes them a prime target for corporate espionage. Not all of these economic advantages are spy movie level secrets though. They can even be an undisclosed special recipe for cupcakes, that still differentiates one pastry shop from the next.

Trade secret creation process

Since the purpose of a trade secret is to remain secret, there is no federal registration procedure to follow. It’s up to every organization to have safety measures in place that protect their assets. Proactivity is key here. You must make sure that you have the appropriate procedures in place that’ll determine who, when and why should someone have access to one of your trade secrets.

Keeping logs, implementing tight digital security, having physical documentations under lock and key; all of these are steps that should be part of your strategy. A common defense in the case of a trade secret infringement from an employee or business partner is they’ll say they didn’t know it was proprietary knowledge. So, make sure you adequately inform everyone of the situation, and have relevant NDAs signed. It’s thanks to those NDAs that you can pursue legal action if necessary.

In Need Of IPR Protection?

We’ve been doing IPR investigations for the past 20 years. During this time, we’ve worked with industry leaders and fortune 500 companies from loads of niches to assure their IP exclusivity. If you think your brand’s reputation or sales are at stake because of potential infringement, just call us now at (727) 403-1129. We’ll skillfully find the involved parties and help you pursue legal actions or otherwise for the removal of your IP from their hands.

IPR refers to all the legal measures and regulations that are in place to prevent the unauthorized use of an original idea/creation

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The 4 main types of intellectual property serve to protect both creative works and industrial innovations and iterations. Without them, creativity and inventions as we know them today might not even exist. Whatever niche you might be working in, there’s statistically a good chance that you’re using one more more IPs. If they’re not registered, make sure to head to your nearest government agency today to get that process started and assure your brand’s reputation and profit margins.