6 Steps to Protecting Your Start-up

6 Steps to Protecting Your Start-up

by Michelle Fabio, Esq., March 2008

You've worked hard to come up with an original and unique idea, logo, and slogan and you think you're ready to make your proverbial mark on the business world.

Now what? For starters, your new best friend should be the website of the United States Patent and Trademark Office (USPTO) because now it's time to ask yourself some questions about how to best protect all your hard work.

But that isn't all you need to worry about. There are a number of pitfalls you will need to avoid as you venture down the road to success. Here is our list of top mistakes to avoid when you begin your business.

1. Get a Patent

Remember that ideas themselves cannot be patented. Business methods or processes, however, can—provided that they (1) are novel; (2) produce a useful, concrete, and tangible result; and (3) are nonobvious, meaning that someone of ordinary skill in the given technology couldn't easily come up with the idea.

By statute, a patent grants "the right to exclude others from making, using, offering for sale, or selling" the patented method or process.

Although many think of scientific inventions when the word "patent" comes up, business methods and processes have actually been patented as far back as 1799, when a technique for identifying counterfeit money was patented.

Interest in business method patents died down throughout much of the 20th century until computer-related technology picked up in the 1980s, and then, in 1998, a federal court ruled that patents are absolutely intended to protect new business methods with or without the aid of a computer.

In the six months following the decision, patent filings for Internet business methods/computer software rose by 40%.

A patent application with the USPTO is usually in a "pendency period" for about two to three years, and once granted, a business method/process patent is good for 20 years from the date of the application.

2. Stake Your Claim

Since 1995, the USPTO has offered the option of filing for a provisional patent, which is valid for 12 months from the filing date. Some advantages to filing for a provisional application are as follows:

  1. It is a simplified and therefore lower-cost filing procedure because not as much information is needed upfront as with a non-provisional patent application;
  2. It establishes an earlier filing date so that upon applying for a non-provisional patent (which must be done within the 12-month period in order to receive the benefit of the provisional patent), patentability would be determined from the earlier date;
  3. It permits the applicant to promote the object of the patent immediately, including using the label "patent pending"; and
  4. It provides an extra year's time for testing out of the object of the patent before investing in the cost of a non-provisional patent.

Note, however, that the 12-month period is non-renewable so if you don't file a non-provisional patent application within the year, it is as if you never had any patent protection at all—and in reality, you didn't.

3. Protect the Software

Computer software is often combined with a new business method and can therefore come under the protection of a patent. One example is Amazon.com's 1999 patent for its 1-click ordering system, which allows a buyer to avoid entering new billing and delivery information with each order because the information has already been saved in Amazon's database.

Another form of protection for computer software is the copyright. The USPTO defines a copyright as "a form of protection provided to the authors of 'original works of authorship' including literary, dramatic, musical, artistic, and certain other intellectual works, both published and unpublished."

Copyright applications are filed with the US Copyright Office and generally last for the life of the author plus 70 years, although rules vary according to different situations.

4. Know the Difference Between Utility and Design

Business method patents are under the category of utility patents as they protect the way something is used or works; in order to protect the way an article looks, you would apply for a design patent.

Design patents apply to the "visual ornamental characteristics embodied in, or applied to, an article of manufacture" and "may relate to the configuration or shape of an article, to the surface ornamentation applied to an article, or to the combination of configuration and surface ornamentation." Moreover, the design must be novel, original, ornamental, and nonobvious (as discussed above regarding business method/process patents).

A good example of an object granted a design patent is the original Coca-Cola bottle with its unique shape. Other beverage containers, jewelry, furniture, and even computer icons are also eligible for design patents, which are valid for 14 years from the date of issue from the USPTO.

5. Trademark Your Logo and Slogan

In order to protect your logo and/or slogan, you should register them.

According to the USPTO website, "[a] trademark is a word, name, symbol or device which is used in trade with goods to indicate the source of the goods and to distinguish them from the goods of others."

Although even without registering you may acquire certain rights by simply using the logo or slogan, with a trademark registration you have a better chance of winning an infringement suit in case of violation because you have provided notice of your use and claimed ownership of the trademark.

Trademarks are generally valid for 10 years, but there are various forms to be filed in the interim and for renewal, so do be careful.

6. Limit Your Liability

Inventors often forget the last and most important step in the initial phases of creating their business—the actual formation of their company. Often inventors get so mired in designing and protecting their inventions that they don't remember to limit their own liability by forming a corporation or an LLC.

Final Advice

The processes of applying for patents, trademarks, and copyrights differ greatly and can get very complicated. You will want to make sure to read as much as possible to understand the process.