1. Money
You can opt-out at any time. Please refer to our privacy policy for contact information.

Turning an Invention Idea Into Money

Lesson One: Understanding Intellectual Property

By

Woman handing man money
PM Images/ Iconica/ Getty images
Introduction - About These Lessons

Patents, trademarks, copyrights, and trade secrets are " intellectual property " - referring to products that come from the creative mind. Intellectual property is imagination made real. Intellectual property is an asset just like your home, your car, or your bank account.

Just like other kinds of property, intellectual property needs protection from theft and misuse and you can profit from it. Some people confuse patents, copyrights, and trademarks. Although there may be some similarities among these kinds of intellectual property protection, they are different and serve different purposes.

Patents

A patent gives an inventor the right to exclude all others from making, using, importing, selling or offering to sell his/her invention for up to 20 years without the inventor's permission. This gives the inventor the opportunity to produce and market his/her idea, or license others to do so, and to make a profit.

In the U.S., a patent is issued by the United States Patent and Trademark Office or USPTO after reviewing a patent application. A United States patent only protects and provides exclusive rights in the United States. Similar patent protection is offered in other countries.

One thing to remember is even if you are issued a patent if someone else has had a patent issued for the same invention before you - your patent rights could be contested or you could contest a patent issued after yours that infringes on your invention. That is called patent infringement and inventors sometimes have to go to court to settle disputes and damages. One way to avoid this is to do a very complete prior art search - more about prior art and patent searching later.

Trademarks

Trademarks protect words, names, symbols, sounds, or colors that distinguish goods and services. Trademarks, unlike patents, can be renewed forever as long as they are being used in business. The roar of the MGM lion, the pink of the insulation made by Owens-Corning (who uses the Pink Panther in advertising by permission from its owner!), and the shape of a Coca-Cola bottle are familiar trademarks. These are brand names and identities and are important in marketing a product or service.

You can register a trademark or claim common law use (no official registration). Trademark rights may be used to prevent others from using a confusingly similar mark, but not to prevent others from making the same goods or from selling the same goods or services under a clearly different mark.

Copyrights

Copyrights protect works of authorship, such as writings, music, and works of art that have been tangibly expressed. In the United States the Library of Congress registers copyrights, which last for the life of the author plus 70 years. Gone With The Wind (the book and film), Back Street Boys' recordings, and video games are all works that are copyrighted. Only the copyright holder can reproduce or profit from his/her works or transfer those rights.

Trade Secrets

Trade secrets are information that companies keep secret to give them an advantage over their competitors. The formula for Coca-Cola is the most famous trade secret.

The above should give you a basic understanding of the different types of intellectual property. The rest of these lessons will be concerned with the intellectual property of patents only - since patents are what protect inventions.

Continue With > Lesson 2: Patents & Inventions

  1. About.com
  2. Money
  3. Inventors
  4. Need a Patent or Trademark?
  5. Money Lessons - Understanding Intellectual Property

©2014 About.com. All rights reserved.