Small Businesses, Start-Ups, and Intellectual Property

by Zachary Kling

Everybody has intellectual property rights that belong to them.  

You know that scribbled crayon masterpiece hanging on your refrigerator? Your kid has a copyright in that work.

That’s the beauty of copyright; you don’t need to do anything to have your original creations protected by the law. Unfortunately, copyright is generally not a particularly valuable form of intellectual property protection, unless you happen to write, make music, film popular content (movies, TV shows, internet videos), write software, or create works of visual art. If that’s you or your business, then copyright is a good place to start protecting your valuable assets. The automatic nature of copyright is great to afford some of that protection. However, if you really do have very valuable assets that can be protected by copyright, you need to register them with the federal government to qualify for the full bundle of rights and protections.

If you are an inventor that has created something new and useful, you should definitely consider seeking out a qualified patent agent or attorney to help you determine whether you can secure patent rights in your widget.

Additionally, most (if not all) small businesses should definitely be concerned with protecting their name and the goodwill of their business by securing their trademark rights through registration. Too many business owners fail to take this measure because of the misperception of the costs and benefits of registering a trademark. Think of registering a trademark as an investment, not just a cost of doing business. A strong trademark can increase the value of your company and create goodwill among current and future customers.

Registering a trademark with the Secretary of State of the state in which you conduct business is a good place to begin. In Indiana, you are required to have actually used the mark on the goods or services to receive a valid registration.

If your business participates in (or plans to participate in) interstate commerce, then you can register with the United States Patent and Trademark Office (USPTO) instead. National applications for registration also allow you to file an “intent to use” application, which avoids the necessity of actually using the mark before you can apply to register the mark. However, you will need to start using the mark in commerce within a limited time window.

Costs of Registration

In Indiana, the filing fee for each mark is only $10. The USPTO filing fee is currently $325, when filed electronically. 

In order to make sure registrations you file will be accepted, you need to make sure that no one else is already using that mark or has rights to use that mark in the place you want to do business. Attorneys and search firms can do this for anywhere from $200 to $2,000, depending on the depth of the search you want conducted. Do a little googling and you’ll find that most charge in the lower half of that range. While this step is not legally necessary, I highly recommend it because doing so provides more assurance that the mark you want to register is not already being used.  

Trademark applications can be tricky, but can be done on your own. There are a lot of resources available online and in print to help guide you through the process of registering trademarks. However, the best resource will be an experienced attorney who can help walk your registration through the filing office.

I know it can be painful to part with any capital, especially if you are just starting your business, but there are so many benefits to trademark registration that I think every small business owner should seriously consider it.

Benefits:

·         When you conduct a trademark clearance search, you may find that the mark or name you intended to use is already in use. By finding this out before you actually use the mark, you may have just avoided potentially costly litigation from the prior user. Also, you may avoid spending money on promotional materials and advertising that contains an infringing mark.

·         On the flip side of the previous benefit: Registering your mark will discourage others from using the same or similar mark when they conduct a clearance search and find out that you are already using the mark. It’s always better to prevent problems than to fight them later.

·         Trademark registration allows you to protect your brand and brand identity from potential copycats and others who may inadvertently or intentionally piggyback off of your goodwill. A registration is considered strong evidence that your rights in the name and mark are valid!

·         When you file a national “intent to use” application, you are afforded nationwide rights in the use of that trademark. If you have a business you think has the opportunity to expand, this is a powerful tool in allowing that expansion to happen while potentially minimizing the headache of trademark disputes down the road.

·         You can get the government to do some of your dirty work for you! The USPTO has a duty to deny registrations when they are confusingly similar to an already registered trademark.

·         National registration allows you to bring claims in federal court against infringers and provides the possibility of recovering triple damages and attorney’s fees when the infringement occurs under certain circumstances.

·         Deter counterfeiters! National registration provides for statutory damages in the case of counterfeiting, which means you don’t have to prove any damage to you by the counterfeiters. The mere fact that they were counterfeiting your goods allows you to recover a prescribed sum.

·         With a national registration, you get to use that little circle R - ® -, which shows everyone that you are serious about your rights. Not to mention, there’s definitely reputational gains associated with being able to proudly display the “registered” status of your mark. 

Contact Clements & Shackle with any questions.

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