Aside from falling in love, perhaps no other experience in life can be as intoxicating and as exciting as starting your own business. But despite your optimism, one important reason that so many new businesses fail is that new business owners do not spend enough time learning the laws that affect them. Depending on the nature of your business, patents, copyrights, and trademarks (or intellectual property rights) may be important to you. Why? Read on.
Patents
Patents provide inventors, and society in general, a number of important benefits. For example, they encourage people to invent. Without patents, we might never have had the telephone, the computer, the airplane, and other innovations that have transformed society.
Patents also make it easier for inventors to attract the money they need to transform their invention into something that they can market and sell or license.
Patents can only be granted for new and useful inventions and discoveries related to the following:
- Compositions of matter (medicines, for example)
- Improvements in any of the above
If you invent something new and if you want to "exclude others from making, using, or selling" your invention, you must complete a patent application and file it with the Federal Patent and Trademark Office in Washington.
In the application, you have to describe your invention in detail, including how to make and use it. You may also have to provide a prototype. After you file your application and pay the fee, a review process begins — it can take a year to complete. If you're granted a patent, you have to pay other fees as well. Your patent is good throughout the U.S. and in all of its territories and possessions.
You can prepare the application yourself, but you're probably better off hiring a registered patent attorney or patent agent to help you. Although they don't come cheap, their knowledge of federal patent law and of the inner workings of the Patent Office itself can be a time-saver and can give you a better shot at getting your invention patented.
 | According to law, only attorneys and agents recognized by the U.S. Patent Office can represent inventors before the Office. The Patent Office maintains a registry of these attorneys and agents, which can be purchased for a small fee through the Superintendent of Documents, Government Printing Office (GPO), Washington, D.C. 20402. |
 | If you're approached by a company claiming to be an invention marketing business, check it out carefully. To get your money, these businesses exaggerate the potential of your invention, do a haphazard patent search, get you a worthless patent, and do little if any marketing. |
When you get a patent, what you're actually getting is time — 20 years after your application is filed — to develop your idea into something you can make money from and the right to exclude others from doing the same. Meanwhile, your application information is available to the general public so that others can use the information to try and develop new inventions of their own, which they in turn can try to patent. And so it goes . . . .
| If someone violates your patent, the federal government will not help you enforce it or bring legal action against the violator. You have to file a lawsuit in federal district court to collect damages and/or to prevent further infringements on your patent. |
 | Ideas cannot be patented, but an idea can help create something that can be patented. |
Copyrights
The Federal Copyright Act of 1976 allows original created works — including books, software, CD-ROMs, films, artwork, music, and so on — to be copyrighted to prevent others from copying them without your permission and/or without paying you a fee. When you copyright something, it means that the entire time your copyright is in effect, you have exclusive right to copy, perform, or display the copyrighted work. A business copyright lasts for 100 years from the time the work was created or for 75 years after the date of publication, whichever is longer. If an individual has a copyright, it lasts for as long as that person is alive plus an additional 50 years.
| Copyright law allows for fair use of copyrighted material and establishes criteria for determining fair use. |
An idea cannot be copyrighted, but the expression of an idea in a work can be. Nor can works whose value is totally utilitarian and not expressive in any way be copyrighted. So if you build a functional table in your workshop at home out of scrap wood with unique utilitarian features, you can't copyright the table; but you may want to patent it. On the other hand, if you create a table out of an old tree, carving the table base into the shape of a tree trunk and carving branches to hold up the table's glass top, that table can have a copyright by virtue of its creative design. On the other hand, a uniquely-designed table whose uniqueness is not in its artistic qualities but in its utility may qualify for a patent.
Getting a copyright is significantly easier than getting a patent. There is no application process. As soon as you create a work that can be copyrighted, it's copyrighted! It's as easy as that.
 | To be able to sue someone for infringing your copyright, you must register it with the Library of Congress in Washington. Call 202-707-3000 or visit the official Web site for a copyright application. |
In most cases, if one of your employees creates an original work as part of his or her job, the copyright belongs to you, the employer, not to your employee. So if you create packaging for CD-ROMs, you have the copyright on the designs that your employees create while they're on the job. You are also free, however, to work out another arrangement with an employee by drawing up a written agreement to that effect, signed by both of you.
| If you sue someone for violating your copyright, your lawsuit will be heard in federal court. To win your case, you have to prove the infringement, not that you suffered actual damages, and your monetary reward can be as much as $500,000. |
Trademarks
A trademark is something that you can use to identify your business's product and distinguish it from others. A trademark can be a name, symbol, shape, device, or even a word. Service marks are similar but apply to a business service. Well-known trademarks include Apple, Häagen-Dazs, and Kodak. McDonald's is a highly visible service mark.
| Make sure that no one else is using the trademark you want. |
Although you don't have to go through an application process to get a trademark (you get one simply by being the first to use it, and you keep it as long as you continue using it), it's a good idea to register your trademark with the U.S. Patent Office. Being federally registered gives you the right to sue recover damages for unlawful use of your trademark. Registration involves completing an application, providing samples of your trademark, and paying a fee.
You can get a state trademark, but a federal trademark provides more protection and is good in all states. A state trademark is good only in the state that grants it.
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