III. Trade Secrets
- What is a patent? A US patent grants the inventor the right to exclude others from making, using, selling or offering to sell an invention within the United States for a certain period of time. (35 USC 154(a)(1)). The United States Patent and Trademark Office (USPTO) issues three different kinds of patents: utility patents, design patents, and plant patents.
- What may be patented? Anyone who invents or discovers a new and useful process, machine, composition of matter, or improves on such items may patent that invention or process. (35 USC 101 ). The invention must also (1) have some usefulness (utility); (2) be novel (different from all previous inventions); and (3) be non-obvious (a surprising and significant development) to a person with ordinary skill in the invention’s field. (35 USC 102 and 35 USC 103). Utility patents protect the working features or functionality of the invention and design patents (35 USC 171) protect the aesthetic appearance of an invention, but not necessarily its functionality. A plant patent may be obtained on an asexually reproduced plant if the plant is both novel and non-obvious (35 USC 161). It is also possible to obtain a utility patent on a genetically modified plant that meets all the conditions for issuance of a utility patent. J.E.M. Ag. Supply, Inc. v Pioneer Hi-Bred International, Inc., 534 US 124 (2001).
- How long does a patent last? Utility patents last for 20 years from the date of filing of the application for the patent. (35 USC 154(a)(2)). Design patents last for 14 years from the date granted. (35 USC 173).
- How does an idea evolve into a patent? An idea or concept alone is not patentable until it is reduced to practice.
- How is an invention reduced to practice? "Reduction to practice" can occur by either of two means: First, actual reduction to practice means the inventor has physically constructed the invention and conducted tests to determine if the invention operates as contemplated. Second, constructive reduction to practice means filing a patent application, which must include sufficient information concerning the invention so that anyone "reasonably skilled in the art" to which the patent applies can make or use the invention.
- When should one submit an application for a patent? It is important to file for a patent quickly, otherwise the inventor may lose the right to patent (see 35 USC 102(b)). The right to patent is lost if the application is not submitted within one year from:
- the first public use of the invention
- the first sale or offer for public sale
- the first printed publication of the invention
- What steps are needed to apply for a patent?
- An applicant should conduct a search of other patents to determine if the invention is patentable or if the invention is too closely related to a previous patent.
- The application must be filed with the US Patent Office and include drawings of the invention, if necessary (35 USC 113), specifications which give full, clear, and concise descriptions of the invention, and claims which state how and why the inventor believes the invention is new and patentable (35 USC 112).
- The applicant should disclose all information known which may affect the Examiner’s decision to grant the patent.
- The applicant must also certify that she/he believes that she/he is the original and first inventor. (35 USC 115).
- What can happen to someone who infringes a patent? Under the statutes, an infringer may be liable for civil damages including reasonable royalties (35 USC 284), injunctions (35 USC 283), and attorney fees in some cases (35 USC 285). However, if the invention is not labeled as patented, the inventor may lose his right to receive damages from infringement. (See 35 USC 287(a)).
- What is the University Policy concerning patents? NC State policy is governed by the Patent Procedures. In general, the University has a property interest in any patentable invention that is created as part of:
- University research
- activities within the scope of the inventor’s employment as a NC State employee or in official association with the University, or
- activities involving the use of University time, facilities, staff, material, non-public information, or funds administered by the University (see Patent Procedures Section 3.1)
What about royalties from patents? Generally, under University policy the inventor will receive 40% of Net Revenue, defined as gross revenue less the cost of patent application and prosecution. The inventor’s Department will receive 5%, his/her college will receive 5% and the Patent Trust Fund will receive 50% of Net Revenue. NCSU REG 10.00.03 Royalty Sharing.
- How do I file an invention disclosure with NC State? For more information on patents and inventions and to download an invention disclosure form, contact the Office of Technology Transfer.
- What is a copyright? A copyright is a federal protection granting authors exclusive rights over their literary works, graphs, pictures, sculptures, architectural works, computer programs, sound recordings, dramatic works, videos, films, and other creative works. A copyright protects the expression of ideas; therefore, the creative work must be in some tangible form of expression such as a writing, recording, or picture. The "idea" expressed in a copyrighted work is not protected.
- What rights are created through a copyright? Federal statute (17 USC 106) grants the author a "bundle of rights" over the creative work, including the exclusive rights to:
- display in public
- perform in public, and
- make derivative works from the original work.
- Who has ownership of a copyrighted work? Generally, the creator or author has ownership in the creative work. (17 USC 201(a).)
- prepared by an employee within the scope of her/his employment or
- work specifically ordered for use as a contribution to a collective work, as part of a motion picture or other audiovisual work, as a translation, as a supplementary work, as a compilation, as an instructional text, as a test, as answer material for a test, or as an atlas, if the parties expressly agree in a written instrument signed by them that the work shall be considered a work made for hire.
- When does a copyright arise? A copyright exists at the moment an idea is created and recorded as a tangible form of expression. Thus, even if the author has not applied to register a copyright, an author still possesses rights over his/her creative works. Consequently, just because a work does not have the word "copyright," an abbreviation of the word, or the copyright symbol ©, does not mean the work is not protected. However, registration with the Copyright Office is required to file an infringement action. (17 USC 411(a)). Further, if notice of copyright is attached, a defendant will have no claim of innocent infringement. (See 17 USC 401 and 402 and 37 CFR 201.20 on acceptable forms of copyright notice.)
- How long does a copyright last? For works created after 1978, copyright lasts for the duration of the author’s lifetime and then 70 years after the author’s death. (17 USC 302(a))"Work for hire" or anonymous copyrights last 95 years from the first publication, or 120 years from their creation, which ever occurs first. (17 USC 302(c)). Copyright for works created before 1978 is very complex. For works created before 1978, see 17 USC 303 and U.S. Code 304.
- Are there any allowable uses of copyrighted materials? Yes, some exceptions exist that allow a person to copy, distribute, or display portions of copyrighted materials without infringing on the author’s rights:
- Fair Use Exception: In limited circumstances, a person can use a portion of a copyrighted work without facing infringement charges. Federal statute (17 USC 107) states a person does not infringe a copyright by using a part of the work if the intent of the use is for criticism, comment, parody, news reporting, teaching, scholarship, or research. In general, and even when the use is for one of the listed purposes, the applicability of the fair use exception will be decided based on four factors:
(i.) The nature of the use- for profit or for criticism, research, etc.; that is, whether the use is "for profit" or "not for profit",
(ii.) The nature of the copyrighted work- creative works are given more protection from infringement than factual works,
(iii.) The amount of substantiality of the portion used- the more of a work that is used or if the most important portions are used, the more likely there is an infringement, and
(iv.) The market effect on original works (probably the most important factor)- a court will look to see if the infringement limits the ability of the author to sell the original copyrighted work.
- Libraries and archives may make copies of copyrighted materials if the library is open to the public, the library includes a copyright notice, and the library is not attempting to take commercial advantage of the copy. (17 USC 108).
- Certain non-dramatic performances such as in educational settings (including face-to-face teaching), religious works, and some charitable performances. See 17 USC 110. Generally, the non-dramatic performance must be:
(i.) performed as a regular part of the instructional activities of a government body or non-profit educational institution and
(ii.) the performance or display is directly related to the teaching of the content included in the performance and
(iii.) the performance is primarily used in classrooms or other places of instruction. Distance education transmissions generally do not qualify.
- Certain copies may be made by an authorized entity to assist the blind or disabled. 17 USC 121.
- What is the University’s policy concerning copyright ownership? University copyright policy is governed by the Patent Procedures and Copyright Implementation Pursuant to Copyright Use and Ownership Policy of the University of North Carolina. In general, copyrightable materials are the property of the author. However, different treatment may result when the author is employed to produce a specific work. This would be a "work for hire" situation where the University may have a property interest in a copyrighted work created by an employee or someone hired to create the work.
- Trade Secrets:
- What is a trade secret? A trade secret is any business or technical information, including such information as formulas, patterns, programs, devices, compilations of information, methods, or techniques that have commercial value because the information is not know by the public. (NC G.S. 66-152(3)). Trade secrets are protected under North Carolina law by the Trade Secrets Protection Act, 66-152 et seq.
- What remedies are available for trade secret misappropriation? A party may ask a court for:
- an injunction to stop another party from using or disclosing the secret;
- reasonable royalties;
- actual damages in all cases; and
- punitive damages and attorney’s fees for willful misappropriation. (G.S. 66-154(a)).
- What is a trademark? A trademark may be any word, group of words, logo, symbol, numbers, colors, sounds, scents, or shape of packaging that is used to identify and distinguish a producer’s goods or services. (See 15 USC 1127; see also 15 USC 1052 for limitations on what can be a trademark.)
- What protections are available for registered trademarks? A registered trademark may not be reproduced or counterfeited in connection with any sale, offer to sale, distribution, or advertising. (15 USC 1114(1)) Anyone who infringes on a trademark may face a court injunction (15 USC 1116), be forced to turn over any profits from the infringement, pay damages, pay attorney fees, and treble damages. (15 USC 1117) However, the trademark owner may lose their right to damages if the trademark lacks notice of registration (such as ®). (15 USC 1111).
- How to apply for a trademark: To receive an official trademark, the applicant must file with the U. S. Patent and Trademark Office and include their name, citizenship, address, picture of the trademark, with what goods or services the trademark will be in conjunction with, the date the trademark was first used and the method of attaching the trademark to the product.
- Protections for non-registered trademarks: Even though a trademark is not registered, it still may have protections under state laws or from court precedent. Some courts have recognized a federal civil claim that protects both registered and unregistered trademarks through 15 USC 1125 under principles or unfair competition and commercial misrepresentation. State courts, including North Carolina courts, have also recognized common law protections for non-registered trademarks. Generally for an unregistered trademark to receive protections, it must be unique or not generally descriptive, have a long period of continual use and there is a likelihood of confusion by the public between the two marks. Under unfair competition principles, a plaintiff may get an injunction from the courts or force a defendant to take reasonable steps to avoid confusion between the two marks.
NOTE: This one-year grace period is peculiar to US patent law. In most of the rest of the world, doing any of the acts listed in a, b, or c before filing a patent application precludes patenting the invention.
All faculty, staff, and students that engage in University sponsored research must sign a Patent Agreement. (See Patent Procedures Section 3.5) And must disclose their inventions to NC State. (See Patent Procedures Section 3.1) Any NC State personnel that create patentable inventions should notify their Department Head or contact the Office of Technology Transfer (OTT). (See Patent Procedures Section 6.1). The Vice Chancellor for Research and the Intellectual Property Committee will decide if the invention should be submitted for a patent. Any invention created by a University employee on his or her own time, outside of their scope of employment and not using University resources is the property of the inventor.
However, there is an exception when the copyrighted work is a "work for hire."
Work for hire is any creative work that is either:
Unregistered trademarks may be indicated with a "TM" from trademarks or a "SM" for service marks.
*** For more information, look at the Unites States Patent and Trademark Office web site at www.uspto.gov***