Design patents, trademarks, copyright and trade secrets offer lower cost, and sometimes underappreciated, forms of intellectual property.
Pictured: Hands protecting idea in front of falling money/Taylor Tieden for BioSpace
As recession fears continue to grab headlines, many biopharma businesses are looking to manage costs, including legal expenses. While utility patents are widely regarded as the gold standard of intellectual property (IP) protection in the high-tech and life sciences industries, several other forms of IP are significantly cheaper and may provide valuable protection, either on their own or as a complement to utility patents.
As attorneys focusing on IP protection at Snell & Wilmer, we understand that investing in design patents, trademarks, copyright and trade secrets can help to diversify protection of a company’s technology, especially in an uncertain economic environment. Companies can also use these forms of IP to extend protection for their products, especially as they go off-patent.
Design Patents: Inexpensive and Fast
Design patents protect a product’s ornamental look and are especially useful when the product has a distinctive appearance that is at least partially independent of its function. In the pharmaceutical space, design patents potentially may be used to protect a medication tablet’s shape (and possibly also color), an image or text imprinted onto the medication’s surface or the packaging used to transport or deliver the medication. Design patents can also be sought for graphical user interfaces that interact with patient portals.
The cost to prepare and file a design application typically is significantly less than for a utility patent because there is essentially no written description of the invention—just illustrations of different, specific views of the invention. A draftsman can usually generate these illustrations from photographs, drawings or even CAD models of the product. Once the application is filed, it takes just one to two years to prosecute the design patent to allowance, significantly less than the three to five years for a utility patent. Additionally, in contrast to utility patents, design patents do not require maintenance fees, further reducing their overall cost. In the end, design patents run about $5,000, compared to upwards of $10,000 for utility patents.
Notably, design patents’ term—15 years from grant even for continuation applications—differs from utility patents, which generally expire 20 years after their earliest nonprovisional priority date, absent terminal disclaimer, patent term extension or patent term adjustment. In some circumstances, design patents may be used strategically to extend protection for a product.
In comparison to the relatively small upfront investment in filing and prosecuting the application through grant, the value of a design patent is potentially quite large. This is because U.S. law provides that someone who manufactures or sells an article of manufacture covered by a patented design is liable to the patent owner to the extent of his “total profit,” though a court may award only some portion of the profit deriving from the infringing design itself.
Trademarks: Potentially Indefinite Protection
A trademark identifies and distinguishes the source of the product or service. Nonfunctional elements of a product such as its shape or color may be protected as a trademark in conjunction with, or as an alternative to, design patents and/or utility patents. Typically, submitting a trademark application costs around $3,000, and registration can be obtained in as little as two to three years.
While the term of a utility patent is generally 20 years from the earliest nonprovisional priority date, a trademark can be perpetual for as long as the holder keeps the trademark registered, uses it regularly and enforces their rights. However, in order to register a trademark, the mark must be either inherently distinct or shown to have acquired a secondary meaning. Secondary meaning in trademark means that, in the mind of the public, the primary significance of the trademark is to identify the source. It typically takes five years of substantially exclusive and continuous use of the mark in commerce to establish secondary meaning.
Copyrights: Low-cost, Super Fast and Long Lasting
Any original work of authorship fixed in a tangible medium is automatically protected by copyright, with no other action (or cost) required. So, if a design feature is affixed to a product and is an original work of authorship, that design feature may be protected by copyright. Copyright registration can afford additional protections and is required before damages are collected in an infringement action.
Copyright is often overlooked by life sciences companies as an IP strategy because, similar to a design patent and trademark, it does not cover anything functional. Nonetheless, some aspects of a medication may be protected by copyright, such as printed information and artistic images on the medication packaging. Copyright also protects written protocols and the creative way the holder presents an innovation to the world through its website, videos and marketing materials. Other copyrightable aspects can include white papers, user manuals, catalogs and even software code that may accompany the tracking or use of the drug by the caregiver or patient.
Copyright cost is a major advantage of copyright over a utility patent. Registration costs $45 and sometimes multiple works can be registered together in a group registration. Copyright can also last significantly longer than a utility patent: in the U.S., a copyright generally lasts for the lifetime of the author, plus 70 years. It typically takes about three months to obtain a registration from the U.S. copyright office, as opposed to years for design or utility patents. Additionally, a copyright has the advantage of allowing the owner to recover statutory damages rather than actual damages in the event of infringement, which can be helpful if proving damages against an infringer is difficult.
Trade Secrets: Keeping Details Close to the Vest
Trade secret protection, like a utility patent, applies to the functionality of a product, but in contrast to a utility patent, trade secrets can do so indefinitely. A trade secret is information that has independent economic value because it is not widely known or easily ascertainable, and is the subject of secrecy efforts. Trade secrets, however, do not preclude parties from engaging in legitimate duplication efforts, such as reverse engineering, to discover the secret independently. A trade secret designation also does not preclude a third party from independently developing its own version of the product, method or formula, patenting it and claiming exclusive ownership—effectively excluding the original inventor who did not patent it because they held it as a trade secret.
Unlike other types of IP, a trade secret cannot be registered because doing so would require the trade secret to be disclosed rather than held in secret. However, courts consider reasonable efforts to protect a trade secret when deciding whether it can be enforced. In general, to be enforceable, trade secrets should only be disclosed to those who need to know, and even then only under a non-disclosure agreement.
While trade secret protection is, in some sense, “free,” putting the appropriate safeguards in place to maintain the trade secret does take time and care. Indeed, courts frequently find that companies have failed to apply the reasonable effort needed for their trade secrets to be enforceable. As such, the trade secret’s holder must not only establish, but continually maintain, vigilance. If the company is lax in requesting or enforcing non-disclosure agreements, someone with access to the secret may obtain and then reveal it to the public, leaving the company with little recourse.
While utility patents are a valuable form of intellectual property protection, life sciences and high-technology companies may find highly effective, yet less expensive, protection in a combination of other forms of IP. Now more than ever, biopharma companies should consider all their options when it comes to protecting their portfolios.
April Wurster is partner at Snell & Wilmer focusing in IP protection. Jaime Choi, Christopher Franich and David Nigro are also attorneys at Snell & Wilmer.
