The laws governing intellectual property protection are complex. However, IP is one of a small business’s most valuable assets. Forbes reported that 80% of a business’s value is derived from intangibles, such as IP or branding. Many merchants believe their logo, brand name or tagline is protected under common law, but there are some key caveats to common law IP that can impact your competitive advantage. Here’s what you need to know about common law IP rights.
[Read more: Intellectual Property: Differences Between Patent, Copyright and Trademark Laws]
Intellectual property and common law
Intellectual property is generally broken down into four categories: patents, copyrights, trademarks and trade secrets. Each type of IP is protected by a different set of laws that delineate ownership and usage of a particular work. Patents protect inventions; copyrights protect creative works; trademarks cover branding.
[Read more: Everything You Need to Know About Intellectual Property]
The term “common law” refers to a commonly held set of unwritten laws that are not officially codified but instead set by legal precedent in the courts. Common law comes into play in instances where the outcome of a case or a dispute can’t be conclusively determined by referencing an official law.
Does common law cover intellectual property?
Trademarks are covered under common law. Your business may have acquired a common law trademark just by using a certain logo, business name or tagline. “Common law trademark rights go to the business that uses the trademark first. And you can only enforce a common law trademark in the geographic area where the trademark is used,” described Legal Zoom.
There are limits to what IP is covered under common law, even when it comes to common law trademarks. A common law trademark is limited to a specific geographic area where the intellectual property is used, as well as any areas where it could “reasonably expand.” For instance, a noodle restaurant called Tasty Noods in Los Angeles could only claim reasonable common law trademark rights for California, not Maryland or New York.
Another caveat to using a common law trademark: As a business owner, it’s your responsibility to enforce your common law rights. A registered trademark or patent application could infringe on your common law trademark unless you oppose that application within five years of it being submitted. You can search to see if someone else is using your business name or tagline in the following places:
- Federal trademarks: Visit the USPTO website to find all registered U.S. trademarks.
- State trademarks: Check your state’s trademark website. You will need to check all state records before registering for a federal trademark. If you wish to use a common law trademark, you just need to visit the official state trademark website.
- Common law trademarks: Check business directories, website domain sites, phone directories and regular search results to see if your trademark is already protected under common law.
Only trademarks are automatically protected. Copyrights and patents must be registered and maintained.
What intellectual property is automatically protected?
The answer varies depending on the type of intellectual property you’re seeking to protect. The short answer: Only trademarks are automatically protected. Copyrights and patents must be registered and maintained. Otherwise, your IP may enter the public domain, wherein anyone can access your trade secrets.
When work enters the public domain, it is no longer protected by intellectual property laws. “Public domain” is a term that describes works owned by the public as a whole. Facts, generic titles and mathematical formulas are all examples of public domain that cannot be copyrighted or trademarked.
A work enters the public domain after its IP protection expires. That timeline depends on the type of protection:
- Patent: A patent expires 20 years after application, although some patents may be extended for an additional five years. Alternatively, a patent may expire early if the holder does not pay the appropriate patent fees.
- Copyright: Copyright laws are a little more complicated. A copyrighted work enters the public domain based on the year of publication. For current business owners, “[w]orks created after 1977 become public domain works 70 years after the creator's death. Corporate works become public domain either 95 years after publication or 120 years after creation, whichever comes first, with some caveats.”
- Trademark: Registered trademarks never expire. Common law trademarks are harder to enforce.
Your brand is a critical asset; make sure you find one that fits your company and get the clearance you need to use a name or image legally.
CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.
Want to read more? Be sure to follow us on LinkedIn!
CO—is committed to helping you start, run and grow your small business. Learn more about the benefits of small business membership in the U.S. Chamber of Commerce, here.
Join us for our Small Business Day event!
Join us at our next event on Wednesday, May 1, at 12:00 p.m., where we’ll be kicking off Small Business Month alongside business experts and entrepreneurs. Register to attend in person at our Washington, D.C., headquarters, or join us virtually!
