California and Idaho startups should understand different categories of Intellectual Property in order to determine how best to protect these assets.
As a practical matter, a variety of different assets can be considered intellectual property. A non exhaustive list of IP includes: technology, brands and marks, data, customer information, business processes, people and know how, and business relationships.
There are four major categories of Intellectual Property, each with different attributes that dictate which protection strategy a startup should implement:
- Trade secrets- generally, trade secrets include any valuable information of which the components are not publicly known that a company has taken reasonable efforts to keep secret. Think KFC’s secret blend of herbs and spices. Nonpublic elements of software are also eligible for trade secret protection. The key qualification of whether or not information can be considered a trade secret, is whether a startup has taken reasonable efforts to protect this information and exclude others from accessing it.
Trade secrets do not have to be registered in order to be afforded protection. Instead, trade secrets are protected by federal and state law. The Defense of Trade Secrets Act § 1836, et seq. allows an owner of a trade secret to sue in federal court when its trade secrets have been misappropriated. Most states offer additional protection under state law.
- Copyrights – Copyright protections are offered to owners of original works of authorship in a fixed medium. This can include educational curriculum, sound recordings, and software code.
Copyrights exist automatically in an original work of authorship but a copyright owner can take additional steps to enhance protections which include registering a work with the U.S. Copyright Office. Copyright registration allows owners to seek monetary damages and attorney fees, and also provides a presumption of ownership if there is a dispute over the correct authorship of the work.
- Trademarks – Trademark protections apply to names, slogans, symbols or designs identifying goods or services. Most commonly, this protection encompasses brand names and logos.
Like copyrights, trademark protection exists automatically when a businesses uses the words or symbols in commerce. However, this right is limited to geographic region where the business operates if not registered. To expand this protection nationally, and to activate a legal presumption that a startup owns the trademark, registration with the Untied States Patent and Trademark Office is required.