ECC Talk #11 – Patents and Intellectual Property


Patents, Intellectual Property, Trademarks, Copyrights, Trade Secrets, The America Invents Act….. What’s all of this stuff mean?

In 1975, only 20% of a company’s worth was intellectual property, and 80% was hard assets – Fast forward t0 2012, now approximately 80% of a company’s worth is defined by their intellectual property (Patents and trade secrets).  If you think about it, this is a major shift which shows that companies are protecting knowledge more than assets.

So, with those statistics in mind, let’s delve a bit into the definitions of intellectual property, shall we?

PATENT – A legal monopoly.  With a patent, you get an exclusive 20 year right to exclude others from the market.  A patent protects your research & development investment by locking others out from competing with you.  The first product is always more expensive due to R&D, and a patent keeps the knock-offs from running you out of business.

Think of it this way – A patent is the government’s way to get you to publicly disclose your technology in exchange for a monopoly.  The government’s concept is that by allowing a monopoly in exchange for a full disclosure, the innovation can be broadly used for the public good after the 20 year monopoly runs out.  This is good for the economy, good for technology, and encourages innovation and business investment.

Patent Claims – This is actually what is the legal boundary of the patent.  The claims are actually what the lawyers spend most of thier time on because this is the legal description of exactly what the patent does and does not include.  The inventor and patent attorney’s goal is to make the patent claims as broad as possible, whereas the Patent Office’s goal is to make the claims as narrow as possible.  Patent claim adjudication is typically a challenging process of back-and-forth negotiation between the patent attorney and the US Patent Office.

PROVISIONAL PATENT – This item is of particular interest to startups…. A provisional patent costs $110 and you can do it yourself.  It is valid for one year, and after that time you have to turn it into a full utility patent or you lose the benefits of your filing date.  You can re-file again, assuming no one has filed a patent and gain another year of protection, however this is a very dangerous game.  One of the benefits of provisional patents is that you can now mark all of your prototypes as Patent Pending.  This will discourage most would-be copy cats.  One of the other great things about a provisional patent is that it is not publicly disclosed.   So, if somebody wants to copy your idea, they won’t have access to the “secret sauce” that makes it work because they won’t have access to your provisional patent.

Here’s some resources to help you fill out what you need on the provisional patent application:
1.  US Patent & Trademark Office (USPTO) Provisional Patent Application Page –
2.  US PTO Electronic Filing Pages –

1.  Write down everything relevant to your idea or invention including: what does it do, how does it do it, what is it composed of, etc. You want to be as detailed as possible to include everything in the provisional patent.
2.  Create a drawing or figure of your invention.
3.  Complete necessary paperwork. Fill out these official documents from the US Patent & Trademark Office:

  • Provisional Patent Cover Sheet & Invention Declaration Document.

4.  Submit all documents with filing fees to the US Patent & Trademark Office.

THINGS YOU’LL NEED –>Provisional patent application cover sheet  (Get from USPTO website above) –>Invention declaration   (The documentation you prepare)

GOOD DESCRIPTION OF INFO YOU’LL NEED TO INCLUDE:   (Note, You don’t need to pay this NOLO service to file your patent.  They just have the information nicely arranged for you.  You can make your own provisional patent to file yourself (See #1 and #2 up top)

COPYRIGHT – Protects the form or expression of works of authorship.  This can include but is not limited to – Writings, Brochures, Layouts, Schematics, and other drawings

TRADE SECRET – Can be protected forever….. Coca-Cola is the example everybody always thinks of.  Their secret recipe is only known by three people, and they have significant industrial security in place to protect this trade secret.  Violation or exposure of a trade secret can be punishable by law, but this statute varies and is enforced differently from state-to-state.

TRADEMARKS – Logos, Brands, Product Trademarks, Tag Lines, etc.  Trademarks provide consumer protection and anti-confusion.  Like for example, you know when you are buying an Apple product you expect a certain look, feel, support infrastructure, etc.  When you buy a Mountain Dew, you know what it will taste like, no matter where in the world you are.  It is brand recognition and understanding to protect consumers.  Trademarks can exist and will not ever expire as long as they are still in use.

I almost forgot – The America Invents Act states that by 3/16/2013 the patent law will change, and the first inventor to file wins….. So if you have an idea, make sure you get that provisional patent filed!