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Intellectual property typically is the most valuable asset for information technology and life science companies. The protection of that intellectual property is critical to obtaining funding for the business and ultimately for the success of the business. This article addresses the three forms of Federal statutory protection of intellectual property. Next month’s article will address the intellectual property protection that is available under state and international law.


Copyright protection is available for an original work of authorship in literary, audio-visual, and other works of expression. The owner of a copyrighted work has the exclusive right to reproduce, distribute, publicly perform, publicly display, or prepare derivative works of the work. Importantly, however, a copyright interest will not protect ideas, procedures, processes, systems, methods of operation, concepts, principles, facts, and discoveries; although, it may protect the original and creative way the idea, procedure, etc. is expressed. In addition, "fair use" of copyrighted material such as scholarship, research, teaching, news reporting, comment, and criticism, does not constitute a copyright violation.

Unlike patent protection, copyright protects expressive works from the moment they are fixed in a tangible medium of expression. There is no required registration or application process for the copyright to exist. However, registration of a copyright with the United States Copyright Office provides the following additional benefits: (a) registration is a prerequisite to filing a copyright infringement suit; (b) registration before infringement entitles the copyright owner to statutory damages and attorneys’ fees; and (c) registration provides evidence of the ownership of the work at issue.

For works created after January 1, 1978, the term of a copyright for a work created within the scope of the author’s employment, or otherwise that is a work made for hire, is 95 years from the year of first publication or 120 years from the year of its creation, whichever expires first. For works authored by an individual, the copyright term is the life of the author plus 70 years.


Patent protection is available for machines, processes, articles of manufacture and compositions of matter. The most familiar form of patent is the "utility" patent, which includes electrical, mechanical, and chemical types. The subject matter of patent protection has evolved as technology has developed and progressed. In recent years there has been much discussion and debate, and some confusion, regarding the patentability of living matter (non-naturally occurring forms which are the product of human ingenuity), software and business methods, but it is now well established that all of these may be patented.

In the United States, the key statutory requirements for patentability are that the invention must be novel, useful and non-obvious. The novelty and non-obvious standards often are determined by what is known in the "prior art." Whether an invention is obvious in view of the prior art is judged by whether the prior art teaches a workable version of the invention, not whether it is obvious to try to make the invention.

Patent applications are filed with the United States Patent and Trademark Office ("PTO"), which evaluates the patentability of the applied-for invention. The PTO assigns an examining attorney to each application. Examining attorneys typically have some education and experience in the subject area of the patent application. An application is "prosecuted," meaning that the applicant and examiner engage in a written back-and-forth dialogue regarding the scope of the application and other issues.

An issued patent gives the owner an "intangible" property right to exclude others from practicing the invention, that is to make, use, and sell the invention. This property right is defined by the numbered claims found at the end of the patent. It is important to recognize that this property right is one of exclusion; the patent does not give its owner the right to practice the invention, only the right to exclude others from doing so.

United States patent rights will be lost unless a patent application is filed within 1 year after the invention is first sold, offered for sale, publicly used, or disclosed in a printed publication.
Patents applied for before June 8, 1995 but not issued on that date have a term of either 17 years from the date the patent issues, or 20 years from the date of application, at the election of the patent owner. For patent applications filed after that date, the term is 20 years from the date of the application. In some cases the term of patents can be extended, for example, to take into account the time spent seeking regulatory approval of a new drug product.

Design patents are available for new and ornamental designs to protect a product’s look and have a term of 14 years. Plants and seeds may also be protected by patents, and depending upon how created, plants also may be protected by other means as well. Plant patents have a term of 20 years.


Trademark and unfair competition law protects the trade identity associated with the goods and services marketed and sold by commercial entities. Ownership of a mark–at least with respect to the geographic area of use–is generally established in the United States by actual "use" of the mark in connection with the sale of goods and services. Registration of marks with the PTO, however, provides the following additional benefits: (a) nationwide constructive first use as of the application filing date; (b) ability to recover attorneys’ fees and treble damages and to seek import restriction remedies; (c) prima facie evidence of the facts set forth in the registration; and (d) valuable documentation for obtaining or retaining Internet domain names.

Trademarks can be classified by the following types: arbitrary, fanciful, suggestive, descriptive, and generic terms. Generally speaking, arbitrary, fanciful, and suggestive marks are those marks that bear no or little relationship to the actual goods and services and are entitled to a relatively broad scope of protection. Descriptive marks–those marks that merely describe in some fashion the goods or services–are entitled to protection only upon proof that the relevant consumers associate the name of the mark with the goods and services provided by the owner of the mark. Generic terms are simply words that mean the associated goods, and are entitled to no trademark protection because they have become part of the everyday language.

Trademark owners have the right to prevent others from using confusingly similar marks, and also have the right to prevent others from stripping off the identifying source and replacing it with different marks. Trademarks provide protection for an unlimited length of time. Trademark rights can be diminished, eroded or lost, however, if the owner does not continuously use the mark, or if the owner does not actively enforce his rights against known infringers, or if the trademark loses its significance in the market by becoming generic.

This article was published in the December 2001 issue of the Triangle TechJournal.

This Entrepreneurship article was written by Hutchison and Mason PLLC on 2/11/2005

Hutchison & Mason, PLLC is a Raleigh, North Carolina based law firm specializing in information technology and life science companies. Their web site is