A major decision in your intellectual property strategy is whether to protect an asset with a patent or as a trade secret. Both forms of protection come with their own advantages and disadvantages, and they are largely mutually exclusive.

A patent requires filing an application and approval of the application by the United States Patent Office before you obtain patent protection. You must disclose your entire invention to the public (because patents are public records accessible to anyone) to obtain a patent. A patent is valid for a period of twenty years from the date you filed the patent. You can assert a patent to stop someone from making, using, or selling your invention anywhere in the United States, even if they developed the invention without knowing about your patent. A patent cannot be lost without going through a formal process such as a lawsuit or certain Patent Office proceedings.

A trade secret, generally, is any information, invention, or process that provides independent economic value to your business from being kept secret by your business. Trade secret protection exists from the creation of the invention and continues as long as it remains subject to efforts to keep secret (for example, the Coca-Cola formula is a trade secret that has been kept secret for over a century). No formal application is necessary to create a trade secret, although there are certain steps a business can take to help solidify and ensure trade secret protection (from contract language, to data security mesaures, and more). However, a trade secret can be lost if it ceases to be a secret. This requires you to take steps to protect the secrecy, including proper employee training and the use of non-disclosure agreements. You also cannot successfully assert a trade secret against someone who came up with the same invention by reverse engineering yours, or if they came up with it independently.

You should consider whether your intellectual property strategy is better served by keeping a trade secret or applying for a patent. There are often ways that you can employ both, such as by patenting a product but retaining the process to manufacture it as a trade secret.

What is a Patent?

A patent can be obtained on an invention, which can be either a functional thing or a process of doing something. Before you consider getting a patent, it is important to understand what a patent is and is not.

A patent is not a right to make, use, or sell the invention. You don’t need a patent to build your invention or launch your product to consumers. However, if you release your invention to the world, you risk letting others copy it and undercut your business.

A patent is a right granted by the government to prevent anyone else in the United States from making, selling, or using the invention. You can also use a patent to prevent someone from importing products covered by the patent into the country. A patent is a right to exclude others from profiting from the invention without your permission and protects against competitors copying your invention. 

Is a Patent Right for Me?

So you’ve invented something, and now you’re wondering if you should get a patent for it. Having a patent can be a valuable way to protect your invention (and your business), but you should decide whether a patent is the best choice for you before you start down the road to obtaining one.

First, you must consider whether a patent is the right type of intellectual property for you. A patent can generally be obtained for any “process, machine, manufacture, or composition of matter.” More plainly, a patent protects functional things and methods. If what you have come up with is more like a brand name or identity, then you likely want to explore trademark protection. If what you have come up with is a creative or artistic work, or computer code, then you likely want to explore copyright protection (thought design patents can be obtained for certain non-functional features). 

Then, you should consider the likelihood of getting a patent. To obtain a patent, your invention must be useful, new, and non-obvious. You should consult with a patent professional to evaluate the likelihood of success for your particular invention.

Patent Process Overview

The patent process has several distinct steps. First, you’ll typically work with your patent professional to draft the application. A good application should be highly detailed and cover everything that you are seeking to protect.

Once your application is submitted to the US Patent Office, it will be assigned to an examiner skilled in the field of your invention. However, there are far more applications than examiners, and it will likely be almost a year before you get your first office action (unless you take action to expedite). 

An office action is the examiner’s response to your application. Most likely, your application will be rejected the first time. This is normal. Once you receive your first office action, you will work to respond to the examiner’s arguments and overcome the rejection.

For many applicants, their application is approved after this response. However, it may require several rounds of office actions and responses before your application is allowed, if it is eventually allowed at all.

It is important to keep in mind that the examination of a patent can often take years, and you should consider this timeline in building your IP and business strategy.

Priority and Provisional Patents

In patents, as with much of life, timing is everything. The United States operates on a first-to-file system, where the first person to file a patent application on an invention gets the patent. This means that even if you invent something first and keep it hidden in your garage for years, someone else can patent your invention if they file first.

Another important timing consideration is that the patent office evaluates whether your invention is new and non-obvious based on everything that exists as of your filing date (the “prior art”). This means that by filing earlier, you can reduce the pool of material that can be used to reject your patent.

One of the best tools for protecting your rights is the provisional patent application. A provisional application effectively holds your place in line by fixing a filing date for all the content in your provisional application on the date you file it. However, you must file your full utility patent application within one year of filing your provisional to claim the benefit of the earlier filing date. Only the content that was filed in the provisional application gets the benefit of the early filing date, so your provisional should be as complete as possible. As an extra benefit, you can mark your products “Patent Pending” once you have a provisional application on file.  

Provisional vs. Utility Patent Applications

To optimize your patent strategy, you must consider the different options available to you. The most common type of patent is the utility patent, which covers almost all types of inventions. There are also design patents for ornamental features and plant patents for plant varieties, but these do not feature heavily in most people’s patent strategy.

A utility patent application must contain a complete description of the invention that would allow someone to make or use it by reading the patent. Part of this description should be drawings or descriptive figures of the invention. The utility patent application must conclude with claims, which are the formal description of your invention and define your scope of protection. The utility patent application is what will be examined and ultimately issue as a patent.

A provisional patent application has fewer requirements and several strategic advantages. A provisional application should contain as much description as possible and may include drawings. However, it is not required to contain claims. A provisional application is never examined or published and will not result in an issued patent. Nevertheless, it can be a powerful tool to obtain an earlier filing date and give you an additional year to refine your invention before filing a utility patent application.

What Are Patent “Claims”?

While a patent may be dozens of pages, the most important section is the few sentences at the end known as claims. Claims are formalistic descriptions of the patented invention and must include all the components of the invention and how they relate to each other.

The claims define the scope of protection granted by the patent. To win an infringement case, you must show that the allegedly infringing product embodies each and every element of a claim in your patent. If there is an element missing, then the other product does not infringe your patent. Because of this, a strong patent will have multiple claims that expand the scope of coverage to the maximum extent possible.

Because well-drafted claims make the difference between a powerful patent and a useless one, the initial claim drafting is a critical step in the patent process.

The Federal Reserve has approved $2.3 trillion in new economic initiatives designed to provide support to households, businesses, and local governments impacted by the coronavirus pandemic. One such initiative is the Main Street Business Lending Program which is designed to help small and mid-sized businesses during this time. Through this program, the Federal Reserve will provide loans to companies with up to 10,000 employees or less than $2.5 billion in revenue last year. These "Main Street" loans would be four-year, low interest loans for a minimum of $1 million with principal and interest payments deferred for a year.

The Federal Reserve is partnering with eligible banks to offer new Main Street loans or increase the amount of existing loans. The proposed term sheets for these loans can be found on the Federal Reserve’s website at this link.

Additionally, businesses must also follow the same compensation, stock repurchase, and dividend restrictions that apply to direct loan programs under the CARES Act. 

The program is not yet final and will be open for consumer and industry feedback through April 16, 2020.

Several funding sources are available to businesses to help keep workers employed among the COVID-19 pandemic; while legislation is evolving rapidly, for Florida businesses, aside from private lending, the following three sources are currently available to qualified businesses:

• The Florida Small Business Emergency Bridge Loan Program is currently available to small business owners located in all Florida counties statewide that experienced economic damage as a result of COVID-19, offering up to $50,000 per eligible small business. Loans of up to $100,000 may be made in special cases as warranted by the need of the eligible small business. The term of the loan is one year, and the loan is interest free for the term, and then 12% per annum thereafter These short-term, interest-free working capital loans are intended to “bridge the gap” between the time a major catastrophe hits and when a business has secured longer term recovery resources, such as sufficient profits from a revived business, receipt of payments on insurance claims or federal disaster assistance. The Florida Small Business Emergency Bridge Loan Program is not designed to be the primary source of assistance to affected small businesses, which is why eligibility is linked pursuant to other financial sources. Note: Loans made under this program are short-term debt loans made by the state of Florida using public funds – they are not grants. Florida Small Business Emergency Bridge Loans require repayment by the approved applicant from longer term financial resources. More information is available here at this link.

• The SBA’s Economic Injury Disaster Loan program provides small businesses with working capital loans of up to $2 million that can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing. In response to the Coronavirus (COVID-19) pandemic, small business owners in all U.S. states, Washington D.C., and territories are eligible to apply. More information is available here at this link.

• The Coronavirus Aid, Relief, and Economic Security (CARES) Act allocated $350 billion to help small businesses keep workers employed amid the pandemic and economic
  downturn. Known as the Paycheck Protection Program, the initiative provides 100% federally guaranteed loans to small businesses and loans may be forgiven if borrowers
  maintain their payrolls during the crisis or restore their payrolls afterward. The administration soon will release more details including the list of lenders offering loans under the program. In the meantime, the U.S. Chamber of Commerce has issued a guide to help small businesses and self-employed individuals prepare to file for a loan, which is available here at this link.