Intellectual property concerns are commonly one of the first obstacles entrepreneurs address when starting their business. Trademarks, copyrights, and patents are different ways to protect different types of intellectual property. Patents grant entrepreneurs exclusivity to manufacture, market, and sell something without competition for a set amount of time.
What Is a Utility Patent?
A utility patent legally protects what a single invention does, how it is used, and how it works (35 U.S.C. 101). In other words, utility patents protect the detailed function of a product. The patent covers processes carried out by the item, such as if it manufactures or makes something, if it utilizes other patented parts, or if it improves the functionality of an existing item. Each product or invention requires its own patent.
Some ideas are not patentable. For example, no human process or natural laws, like gravity or magnetism, can be patented. Abstract ideas cannot be patented, which is where some software applications run into difficulty. Software that improves on an existing system may be easier to patent than completely new software, as new software is often an abstract concept.
What Is a Design Patent?
Design patents legally protect what an invention or creative work looks like, its shape and configuration, and any specific ornamentation or coloration (35 U.S.C. 171). Compared with utility patents, design patents protect the form of a product. An example is the signature curved Coca-Cola bottle. Like utility patents, each design requires its own patent.
A design patent is not the same thing as a trademark. While both protect intellectual property, trademarks cover designs like logos, labels, packaging, or other identifiers that protect a product’s goods or services. An example would be the Coca-Cola lettering and stripe, which appear on all Coca-Cola products, not only the curved bottles.
When Would a Business Need a Patent?
A utility patent is used whenever a product is unique. The statute states, “Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.”
If a business owner has something they believe is new and wants to prevent infringement, starting the patent application process can help avoid claims of infringement by other companies. This does not necessarily mean the application will be approved: The process of approval is long, ideas are not always unique, and there may already be another application that is approved first.
Design patents should be filed when the design is what makes people buy their product or article over a competitor’s product. For example, while the idea of earrings cannot be patented, a company’s unique earring design would qualify. If it seems likely that the design would be subject to copies, then a design patent may be a good investment.
Patent Assertion Entities
Beginning in the early 1990s, small-business owners found themselves subject to surprising legal battles as patent assertion entities started using the internet to find products similar to existing patents. In many cases, these entities purchase patents from bankrupt companies or investors, and the item may not even be in production. As the entities find similar products, they file infringement lawsuits unless the competing business owners agree to settle.
Small businesses and start-ups are more vulnerable to these entities because they often lack the legal knowledge to properly patent and protect their ideas before promotion or going to market.
How to Protect Products and Designs
A business owner should take every step possible to understand the risks and benefits of patenting a product early in the startup process. The patent review process can take one to five years from the filing date, and that is only if the filer has met all the requirements. The product in question must:
- Be novel: It must be new.
- Be useful: It must have “utility.”
- Not have previously been patented.
Patent applications can be reviewed at the U.S. Patent and Trademark Office website.
Learning About Patents and the Law
Columbia Law School’s online course, A Legal Toolkit for Starting and Scaling Your Business, gives business owners the tools to navigate legal obstacles, like patents, as they build their businesses.