Intellectual Property Fundamentals

Intellectual property protects creations of the mind—inventions, brand identities, creative works, and confidential business information. Understanding IP types, their distinct protection mechanisms, and how ownership and licensing work enables meaningful assistance with contracts, employment agreements, business strategy, and legal questions. IP law provides time-limited monopolies (patents, copyrights) and ongoing brand protection (trademarks) alongside perpetual secrecy regimes (trade secrets).

Core Concepts

Four primary IP types exist, each protecting different subject matter through distinct mechanisms. Patents protect functional inventions—new processes, machines, compositions of matter, or improvements. They grant exclusive rights for limited terms (typically 20 years from filing for utility patents) in exchange for public disclosure. Trademarks protect brand identifiers—names, logos, slogans, product designs—that distinguish one party's goods or services from others'. Trademark rights can last indefinitely with proper use and renewal. Copyright protects original creative works fixed in tangible form—literature, software, music, art, films. Copyright arises automatically upon creation but registration provides additional benefits. Protection typically lasts for decades after the author's death. Trade secrets protect valuable confidential business information that derives economic value from secrecy—formulas, customer lists, manufacturing processes. Unlike other IP types, trade secrets have no fixed term but require ongoing secrecy to maintain protection.

The fundamental distinction: patents and copyrights are statutory monopolies granted by government registration. Trademarks protect source identifiers acquired through use in commerce (though registration strengthens rights). Trade secrets rely on contractual and common law protection rather than government grants. Understanding what each type protects prevents common confusion—you cannot patent a logo (that's trademark), trademark a novel (that's copyright), or copyright a business method (that might be patent-eligible if novel and non-obvious).

IP Types and Protection

Patents

Patents protect functional inventions—processes, machines, manufactures, compositions of matter—that are novel, non-obvious, and useful. Utility patents cover how something works, is used, or is made. Design patents protect the ornamental appearance of articles of manufacture (shape, surface ornamentation) rather than function. Plant patents cover new, distinct, asexually reproduced plant varieties.

The patent bargain requires full public disclosure of the invention in exchange for exclusive rights. Once granted, patent holders can exclude others from making, using, selling, or importing the claimed invention. Patents are territorial—US patents only provide rights in the United States. Patent terms are limited: utility patents last 20 years from the earliest non-provisional filing date (subject to maintenance fees), while design patents last 15 years from grant if filed on or after May 13, 2015.

Provisional vs. non-provisional applications: Provisional applications establish an early filing date quickly and inexpensively, giving "patent-pending" status. They require a written description and drawings (if needed) but not claims, oaths, or formal declarations. Provisionals automatically abandon 12 months after filing. Non-provisional applications are the full patent application requiring claims, formal specification, oath or declaration, and examination. Non-provisional applications can claim priority to an earlier provisional if the provisional's disclosure supports the later claims.

Claims define scope: Patent claims particularly point out and distinctly claim what the inventor regards as the invention. Independent claims stand alone; dependent claims refer back to and further limit other claims. The claims determine what competitors cannot do—broad claims provide more protection but face higher scrutiny during examination. Claims must be novel (not anticipated by prior art) and non-obvious (not an obvious combination of existing knowledge). Patent prosecution involves responding to office actions where examiners cite prior art and raise objections, requiring amendments or arguments to overcome rejections.

Trademarks

Trademarks protect source identifiers—marks that distinguish one party's goods or services from others'. Marks can be words, logos, slogans, product designs, colors, sounds, or even scents. Unlike patents, trademark rights arise from use in commerce, not registration. Registration strengthens and expands rights but is not required for basic protection.

Distinctiveness spectrum: Marks exist on a spectrum from strongest to weakest protection. Fanciful marks are made-up words with no meaning (e.g., "Kodak"). Arbitrary marks are real words used in contexts unrelated to their meaning (e.g., "Apple" for computers). Suggestive marks require imagination to connect to the goods or services. Fanciful, arbitrary, and suggestive marks are inherently distinctive and immediately registrable on the Principal Register.

Descriptive marks directly describe qualities, characteristics, functions, or geographic origins. They require acquired distinctiveness (secondary meaning) showing consumers associate the mark with a particular source. Five years of substantially exclusive and continuous use provides prima facie evidence of acquired distinctiveness. Generic terms are the common names for goods or services and are never registrable—they cannot function as source identifiers.

Use requirements: In jurisdictions with first-use priority (like the US), the first party to use a mark in commerce has priority over later users. "Use in commerce" for goods means placing the mark on goods, packaging, or displays plus actual sale or transport. For services, use means use in advertising or rendering services across state lines or foreign commerce. Registration provides nationwide constructive notice, presumption of validity, and exclusive rights (subject to prior users in specific geographic areas).

Registration classes: The international classification system divides marks into classes—Classes 1-34 cover goods; Classes 35-45 cover services. A single mark can be registered in multiple classes, each requiring separate fees. Classification affects priority disputes and likelihood of confusion analyses, but priority ultimately depends on use in specific goods/services and geographic scope.

Copyright

Copyright protects original works of authorship fixed in tangible form—literary works, software code, music, visual art, films, architectural works, choreography. Copyright arises automatically upon creation and fixation—no registration required. However, registration provides significant benefits including eligibility for statutory damages, attorney's fees in infringement actions, and presumptive evidence of ownership.

Scope of protection: Copyright protects expression, not ideas, facts, or functional elements. The same idea can be expressed in multiple ways, each potentially copyrightable. Copyright gives exclusive rights to reproduce, distribute, create derivative works, publicly perform, and publicly display the work. These rights can be subdivided and licensed separately.

Duration: For works created on or after January 1, 1978, copyright lasts for the author's life plus 70 years (for individual authors) or 95 years from publication or 120 years from creation (for works made for hire or anonymous/pseudonymous works). Duration varies for earlier works depending on publication status and renewal requirements.

Work-for-hire doctrine: Works created by employees within the scope of employment are automatically "works made for hire," meaning the employer is the first owner of copyright. For independent contractors, work qualifies as work-for-hire only if it falls into one of nine specific statutory categories (contributions to collective works, compilations, instructional texts, etc.) AND there is a written agreement explicitly stating it's "work made for hire." Otherwise, contractors own copyright unless they assign rights. This distinction matters enormously—employment agreements and contractor agreements must address copyright ownership explicitly.

Fair use and limitations: Copyright has built-in limitations. Fair use permits limited use without permission for purposes like criticism, commentary, news reporting, teaching, scholarship, or research. Fair use analysis considers the purpose and character of use, nature of the copyrighted work, amount used, and effect on the market. Other limitations include first sale doctrine (purchasers can resell physical copies), library and archival exceptions, and specific exemptions for reverse engineering software in certain circumstances.

Trade Secrets

Trade secrets protect valuable confidential business information that derives economic value from not being generally known and is subject to reasonable efforts to maintain secrecy. Unlike patents and copyrights, trade secrets have no fixed term—protection lasts as long as secrecy is maintained. Trade secrets can protect a broader range of subject matter than patents (which exclude abstract ideas, natural phenomena, laws of nature) and don't require disclosure.

What qualifies: Virtually any confidential business information can qualify—formulas, customer lists, pricing strategies, manufacturing processes, algorithms, business methods, marketing plans. The information must have actual or potential economic value from secrecy (not from being publicly known). The owner must take reasonable steps to maintain secrecy—non-disclosure agreements, access controls, employee training, physical security, marking documents "Confidential."

Advantages: Trade secrets avoid the disclosure requirement of patents. They can protect information indefinitely if secrecy is maintained. No registration costs or government examination. Protection begins immediately with appropriate measures.

Limitations: Once information becomes public (through reverse engineering, independent discovery, or disclosure), trade secret protection ends. No exclusive rights against independent discovery. Enforcement requires proving misappropriation (acquisition through improper means or disclosure/use in breach of duty). Trade secret litigation can be expensive and outcome-uncertain.

Employment context: Trade secrets are commonly protected through non-disclosure agreements (NDAs), employment contracts, and confidentiality policies. However, general skills, knowledge, and experience cannot be protected as trade secrets—employees can use their expertise gained on the job. The distinction between protectable trade secrets and general know-how requires careful analysis.

Ownership and Assignment

IP ownership begins with the creator, but employment relationships, contracts, and assignments alter default ownership rules. Understanding ownership is critical for ensuring companies properly acquire IP rights from employees and contractors.

Default ownership: Authors own copyright in works they create. Inventors own patent rights in their inventions. Trademark rights belong to the first user in commerce. Trade secret owners are those who develop and maintain secrecy.

Employment relationships: For copyright, works created by employees within the scope of employment are automatically "works made for hire"—the employer owns copyright without assignment. For patents, work-for-hire does not apply—employers must use invention assignment agreements to acquire patent rights from employees. Employment agreements typically include broad invention assignment clauses covering all inventions related to the employer's business or developed using employer resources.

State law limitations: Some states (notably California, Washington, Minnesota) limit the enforceability of invention assignment clauses, especially for inventions developed entirely on the employee's own time, without using company resources, and unrelated to the employer's business. These statutes protect employee rights to pursue independent inventions outside their employment scope.

Contractor agreements: Independent contractors retain IP rights unless explicitly assigned. Work-for-hire clauses apply only if the work falls into specific statutory categories AND the agreement explicitly states it's "work made for hire." Best practice: include both work-for-hire clauses (where applicable) and fallback assignment language. Use present-tense assignment language ("hereby assigns") rather than future-tense ("will assign") to transfer rights immediately.

Pre-existing IP: Contracts should address background IP—inventions or works developed before the engagement. Common approaches: require disclosure of all pre-existing IP used in deliverables, grant licenses for necessary background IP, ensure no third-party IP is included without authorization.

Assignment and recording: IP rights can be transferred through assignments. For patents and trademarks, assignments should be recorded with the relevant government office (USPTO) to provide constructive notice and protect against subsequent purchasers. For copyright, recording with the Copyright Office provides similar benefits though not strictly required.

Licensing Basics

Licenses grant permission to use IP without transferring ownership. Licensing is fundamental to commercializing IP—allowing others to manufacture, distribute, or exploit the IP while the owner retains ownership.

Exclusive vs. non-exclusive: An exclusive license grants rights to only one licensee for the defined territory and field of use. Typically, the licensor cannot grant additional licenses or use the IP themselves (unless the contract permits). Exclusive licenses command higher fees and royalties. A non-exclusive license permits multiple licensees—the licensor retains rights to license others and use the IP themselves. Sole licenses are hybrids: only one licensee, but the licensor retains right to use the IP; no other third parties get licenses.

Field of use and territory: Licenses can be limited by field of use (medical vs. veterinary applications, educational vs. commercial markets) and territory (worldwide, specific countries, states, or regions). These limitations enable owners to maximize value by licensing different applications or regions to different parties.

Duration and termination: Licenses may be time-limited (e.g., 5 years) or perpetual (lasting until IP expires). Licenses should specify termination rights—breach, failure to meet performance obligations, or convenience. Termination provisions determine what happens to rights, inventory, and obligations upon ending.

Royalty structures: Running royalties are typically percentages of sales (net or gross) or metrics tied to IP exploitation. Upfront payments or lump sums are paid when licenses begin. Milestone payments tie to regulatory approvals, sales thresholds, or development progress. Minimum guarantees ensure licensees have incentive to commercialize. Royalty structures vary by industry, IP value, and licensee risk.

Key provisions: Licenses should address sublicensing rights (can licensees grant sublicenses?), assignment rights (can licenses be transferred?), quality control (especially for trademarks—licensors must maintain control over brand use or risk losing rights), reporting and audit rights (how will royalties be calculated and verified?), and infringement enforcement (who pursues infringers and bears costs?).

Common Misconceptions

"Patent pending means I'm protected" — "Patent pending" indicates a patent application is filed but provides no enforceable rights until a patent issues. Competitors cannot be excluded during the pending period, though filing establishes priority.

"Trademark and copyright are the same" — Trademarks protect source identifiers (brand names, logos); copyright protects creative expression (novels, software, music). A logo might have both trademark protection (as a brand identifier) and copyright protection (as an artistic work), but these are separate rights.

"I can't patent something that's already copyrighted" — Different IP types protect different aspects. A software program has copyright in its code (expression) and potentially patent protection in its innovative processes (functionality). These rights coexist.

"Registration is required for copyright" — Copyright arises automatically upon creation and fixation. Registration provides additional benefits (statutory damages, attorney's fees) but is not required for basic protection.

"Trade secrets are protected forever" — Trade secrets last only as long as secrecy is maintained. Once information becomes public through any means (reverse engineering, independent discovery, disclosure), protection ends. This contrasts with patents, which provide exclusive rights even if others independently invent.

"First to file always wins" — This applies only to patents in first-to-file jurisdictions (like the US after the America Invents Act). For trademarks in first-use jurisdictions (like the US), first commercial use determines priority, not filing date. Constructive use from intent-to-use filings provides priority only once registration issues, and earlier actual users still prevail.

"I don't need an assignment if I paid for it" — Payment alone does not transfer IP ownership. Written assignments are required (except for works made for hire in employment relationships). Contracts must explicitly address IP ownership—payment without proper assignment leaves creators with ownership rights.

Terminology

Prior art: All information publicly available before a patent application's filing date (or invention date in first-to-invent systems). Prior art includes patents, publications, public use, sales, or other disclosures. Prior art determines novelty and obviousness.

Distinctiveness: For trademarks, the quality of a mark that enables it to identify and distinguish goods or services. Inherent distinctiveness exists for fanciful, arbitrary, or suggestive marks. Acquired distinctiveness (secondary meaning) occurs when descriptive marks come to signify a particular source.

Fair use: A limitation on copyright permitting limited use without permission for purposes like criticism, commentary, education, news reporting. Fair use is determined case-by-case considering purpose, nature of work, amount used, and market effect.

Misappropriation: Unlawful acquisition, disclosure, or use of trade secrets through breach of duty, improper means, or use of information known to be acquired improperly.

Prosecution: The process of obtaining a patent through interaction with patent examiners, including responding to office actions, amending claims, and arguing for patentability.

Likelihood of confusion: The standard for trademark infringement—whether consumers are likely to be confused about the source of goods or services. Factors include mark similarity, goods/services similarity, consumer sophistication, and actual confusion evidence.

Derivative work: A work based on one or more preexisting works (translations, adaptations, sequels). Creating derivative works requires permission from copyright owners of underlying works.

Jurisdiction Matters

IP protection is territorial—US patents provide rights only in the United States, though international mechanisms exist (PCT for patents, Madrid Protocol for trademarks). Specific registration processes, examination standards, and enforcement mechanisms vary significantly by jurisdiction.

Patents: US follows first-inventor-to-file system with USPTO examination. European Patent Office (EPO) and Patent Cooperation Treaty (PCT) systems have different processes and standards. Patent term lengths, maintenance fee requirements, and post-grant procedures vary.

Trademarks: US follows first-use priority—first commercial user has priority. Many other jurisdictions follow first-to-file priority where the first applicant gets rights regardless of use. Registration processes, examination standards, and renewal requirements differ.

Copyright: International treaties (Berne Convention) provide minimum standards, but registration benefits, duration, and fair use exceptions vary by country. US has specific registration benefits and statutory damages unavailable elsewhere.

Trade secrets: Uniform Trade Secrets Act (UTSA) provides a framework adopted by most US states, but specific requirements and remedies vary. International protection differs significantly.

This primer covers universal IP concepts. For US-specific processes, registration requirements, and examination standards, see IP Primer (US). For IP clauses in contracts, see Contracts Primer. For IP enforcement and litigation, see litigation primer (when available).