The Best Actions Entrepreneurs Can Take to Protect Intellectual Property

Updated on January 29, 2020
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One important thing to consider as you’re growing your company: Making sure that you’re taking the right steps to protect your proprietary brand names, products, and technologies from potential infringers. If you don’t, you could jeopardize all of your hard work—and your reputation. And, worse, you might have to fork over millions of dollars in legal fees to resolve pertinent disputes.

Researchers at the American Intellectual Property Association found that total patent litigation costs an average of about $3 to 6 million for disputes valued between $1 million to 25 million. Yes, that’s a lot.

Fortunately, your company has options available to go against competitors and other malicious actors. Here are some actionable steps you should be taking to protect your company’s growing intellectual property portfolio.

Protect Your Business Trademarks

Registering your business and product names as trademarks with the United States Patent and Trademark Organization (USPTO) is highly recommended. You want to ensure that you can seamlessly conduct business across state lines while also enjoying heightened legal protections against infringers.

First, File for Trademark Protection Online

The USPTO allows companies to file trademarks online using its TEAS Plus application either before or after your company is using its brand and product names in interstate commerce.

If you decide to file your application after conducting your first interstate sale, you’ll have to include images or other examples showing how you’re using your product and brand names in commerce. If you plan to use your trademarks in interstate commerce in the future, you can register your trademarks on an Intent-to-Use (ITU) basis. Then, you can subsequently file a Statement of Use (SOU) form. You’ll need examples attached showing how you’re using your trademarks in commerce.

Heads up: This process entails additional fees, but the USPTO will prevent other companies from registering similar marks they file after the date you filed your ITU application. And that’s definitely what you’re looking for. Alternatively, you can register your trademarks with your state’s Secretary of State office if you only plan to conduct business in one state.

How to Report on Trademark Infringement

Although online marketplaces such as Amazon and Etsy offer internal trademark dispute procedures, they’re only helpful for removing infringing product listings. That might not be enough for every small business owner—especially if you’re seeking damages or injunctions against infringing merchants.

If that’s the case for you, you’ll want to explore your litigation, arbitration, and alternative dispute resolution options. In these instances, judges will usually compare the similarity of both trademarks using multifactor balancing tests.

Although these tests vary by jurisdiction, judges will generally consider whether:

  • The parties’ trademarks look and sound similar to each other
  • There’s hard evidence of confusion among customers regarding the source of the disputed marks
  • The parties are in similar industries and use similar marketing channels

Outside of litigation, US Customs and Border Patrol offers a process that allows companies to submit copies of their trademark registration. You can instruct CBP officers to seize infringing imported products. You can also initiate several filings through USPTO’s Trademark Trial and Appeals Board (TTAB), including notices of opposition to challenge pending registrations and petitions for cancellation.

Get those TTAB forms here.


Safeguard Your Patents

On top of trademarks, companies should be diligent about protecting and enforcing their patents.

With issued patents, direct competitors and other companies are prevented from selling products, processes, and methods that conflict with your company’s patents. Patent registrations also allow you to explore product licensing and other monetization opportunities that wouldn’t otherwise be feasible without one.

How to Pursue Patent Violations

This’ll sound similar to trademarks: Patent owners can use traditional litigation to get injunctions and patent-specific remedies, like lost profit and reasonable royalty damages.

Think a direct competitor or other business has been granted a patent that covers areas you think believe conflict with your already registered patents? You can also initiate one of several proceedings before the USPTO’s Patent Trial and Appeal Board (PTAB) to prevent that person from receiving their patents.

The main types of PTAB disputes that patent owners can participate in include:

  • Post grant review (PGR), which you can use to challenge claims in a recently issued patent no later than nine months from the patent’s issuance or reissuance date
  • Inter partes review (IPR), which you can use to challenge the patentability of claims within an already issued patent on the grounds that they are non-obvious or not novel based on details from preexisting registered patents

It’s important to note that you’ll likely need to retain an attorney who is a certified member of the USPTO’s Patent Bar in order to initiate PTAB proceedings.

An Important Note on International Patents

Unless you’ve filed international patents through the World Intellectual Property Organization (WIPO)’s Patent Cooperation Treaty, US patents aren’t enforceable to prevent infringing products exclusively sold abroad.

But you can address infringing imports. One way you can do this is to request International Trade Commission (ITC) Section 337 proceedings, which can help you secure all-encompassing exclusion orders against foreign importers. You can also submit patent-related requests to CBP officials to find and quarantine imports using the same process you would with trademark-related matters.

Combat Cybersquatters

In 2017, ecommerce stores generated more than $409 billion in annual revenue. That’s an increase of more than $100 billion from the previous year. There’s a big market for new businesses looking to open up shop, and brick-and-mortar retailers who want to establish an online presence for the first time.

Register Your Domain Before Others Do

If you’re going that route, your company should be registering domain names that either exactly match or are phonetically similar to your company’s soon-to-be-trademarked name and products—including “.com,” “.io” and other top-level domain names (TLDs).

If you don’t, competitors and cybersquatters could snap up similar domain names and reroute them to competing websites, parked pages, or even explicit sites to sully your reputation and confuse potential customers.

How to Submit a Domain Dispute

If you find yourself in this situation, your company will have two options.

First, you can submit a Uniform Domain-Name Dispute-Resolution Policy (UDRP) complaint with organizations including WIPO, the National Arbitration Forum (NAF), or any of the other organizations offering UDRP complaint services. Many companies use the UDRP complaint process to resolve disputed domain names because it’s a quicker and less expensive process to dispute and take disputed domain names.

With WIPO, for example, companies looking to submit a complaint for a single domain name can expect to spend anywhere from $1,500 to $4,000 (yikes!) depending on the number of panelists the parties select to rule on the complaint. These cases usually resolve in a few months and don’t entail jurisdictional issues. You also don’t need to hire an attorney to file a UDRP complaint, although it’s highly recommended that you if you want a favorable outcome.

The only drawback with this approach is that the only available remedies are to have the disputed domain names transferred to your account or have the original registrations cancelled. That technically makes the domain available for anyone to purchase. Plus, panelist decisions can be unpredictable since panelists aren’t required to consider prior domain name dispute decisions.

Another available option you have is to sue the domain name owner under the Anti-Cybersquatting Consumer Protection Act (ACPA), which you can find at 15 USC §1125(d). Congress passed the ACPA in 1999 to deter cybersquatting-related bad faith activities. Unlike the UDRP process, you’ll have to follow the traditional steps for filing a complaint in federal court, including retaining an attorney, conducting discovery, retaining expert witnesses, and potentially defending court decisions on appeal.

Naturally, this approach will be more drawn out and expensive compared to filing a UDRP complaint. Regardless, you may want to file an ACPA lawsuit if you’re facing complex evidentiary issues, seeking a broader array of infringement remedies, or looking for more certainty and predictability regarding how courts could rule on your particular dispute.

Start Protecting Your Business Against Intellectual Property Infringement

You can’t always avoid an IP dispute, but you can take steps to protect yourself as best as possible. And you can always consult a business lawyer, too, to make sure that you’ve exposed yourself —and your valuable IP—as little as possible. Steps you take now will benefit you later.

Disclaimer: This article has been prepared for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to any particular issue or problem.

Contributor at Fundera

Eric Pesale

Eric Pesale is an attorney and entrepreneur who writes about business and legal issues for law firms, publications, and companies as the founder and chief legal contributor of Write For Law℠. He is a graduate of New York Law School and the University of North Carolina at Chapel Hill, and has been published in CSO, the New York Law Journal, and Above the Law. He is actively engaged with startup business issues.
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