After months (or, perhaps, years) of diligent legal work, your business has finally secured its intellectual property rights through a patent, a trademark registration, a copyright registration or some combination thereof. Finally, you breathe a sigh of relief, put your legal paperwork in a file cabinet and get back to running your business. Years later, you find that a competitor is infringing your rights. After blowing the dust off your paperwork you discover, to your dismay, that your intellectual property rights were not properly maintained and have expired. What happened and what do you do now?
Unfortunately, many clients fail to realize that most intellectual property rights carry maintenance obligations until it is too late. That being said, these are pitfalls which can be easily avoided, and clients often have tools they can use to “backfill” rights if a deadline is inadvertently missed.
U.S. Patents are subject to periodic maintenance fee payments. The motivation behind this is the anti-competitive effect patents have on the market. Congress decided that there should be some affirmative, monetary obligation of patent owners to maintain patent rights as a means of culling unused patents which might otherwise be preventing competition. Such patent maintenance fees are due at the 3½, 7½ and 11½ year marks. These fees follow the following schedule:
- 3½ year maintenance fees can be paid between 3 and 3½ years after the patent issuance date;
- 7½ year maintenance fees can be paid between 7 and 7½ years after the patent issuance date; and
- 11½ year maintenance fees can be paid between 11 and 11½ years after the patent issuance date.
Additionally, each of these fees can be paid within a six-month grace period (for an additional fee).
If these fees are not timely paid, then the underlying patent lapses and is no longer enforceable. This can be an enormous problem. Many clients either forget or are not told about patent maintenance obligations. The result can be a loss of rights and the inability to stop knock-off products. There are certain procedures to try to reinstate a patent which was unintentionally abandoned in this way, but the costs can be high and the probability of success can vary. This can also open the door to intervening rights by certain competitors. The best thing to do is to carefully calendar maintenance fee deadlines ahead of time and engage counsel to help you.
The first step in maintaining a federal trademark registration is demonstrating the actual use of the trademark. The hallmark of trademark law is use. Trademarks are a way to prevent consumers from becoming confused about the source or origin of goods and services. The actual use in commerce is the first step in maintaining trademark rights. Indeed, failing to make use of a trademark for three or more consecutive years – with very limited exceptions – is considered evidence of abandonment.
The second step in maintaining a federal trademark registration is timely making various required filings at the U.S. Patent and Trademark Office. Trademark registrations, like patents, are also subject to periodic maintenance fees. Here, too, the motive by the Patent and Trademark Office is to cull unused registrations which could be “blocking” third parties who wish to secure similar trademarks. Such maintenance includes filing:
- a Declaration of Use (or Excusable Nonuse) between the 5th and 6th year after registration; and
- a Declaration of Use (or Excusable Nonuse) and an Application for Renewal every ten years after registration.
Additionally, each of these filings can be made within a six-month grace period (for an additional fee).
Copyright registrations in works created on or after January 1, 1978, are unique amongst intellectual property in that – once they issue – no further formal maintenance is required at the Copyright Office. However, while there is no maintenance per se for these copyright registrations, there are still non-substantive things rights holders should do to make their lives easier, including:
- keeping the contact information in the registration up-to-date (especially since this is how third parties interested in licensing may contact a copyright owner); and
- recording any changes in copyright ownership or control (including assignments, licenses, or mortgage/security agreements).
Trade Secret Maintenance
Since trade secrets are not formally “registered” with any governmental agency, there are no formal maintenance steps that need to be taken. While there may not be anything formal, business owners should always keep in mind that they take reasonable steps to maintain secrecy. Just because a contractor signed a non-disclosure agreement does not mean that’s the end of the road. Periodic reminders, conducting proper exit interviews, using special software protection and many other options are all important tools to keep in mind to maintain trade secret confidentiality.
Naples Startup BootCamp
For those just starting out, I invite you to join me for Henderson Franklin’s inaugural Startup Bootcamp on Tuesday, November 16, 2021, from noon to 4:00 pm at Ave Maria Law School in Naples. Click here to download the brochure.
Ave Maria Law School CEO, Dean Czarnetzky, will kick off the event and share information on its Business Institute. My colleague, Matthew Brust and I will discuss two fundamental aspects of a business – how to set it up and how to protect it. The stellar closing panel will provide real-world advice on how to get funding with:
- Timothy J. Cartwright, Fifth Avenue Family Office, Partner; Tamiami Angel Funds, LLC, Chairman and Co-Founder; and Adrenaline Venture Fund, General Partner
- Blake M. Cathey, Chief Operations Officer of Accanito Capital Group
- Dan H. Vo, Assistant Professor of Entrepreneurship Daveler & Kauanui School of Entrepreneurship at Florida Gulf Coast University
Registration is $40 for live in-person attendance or $20 if attending virtually. Admission is complimentary for students. To register, click here.
If you should have any questions or need assistance with protecting your business, I may be reached at email@example.com or by phone at 239-344-1307.