In these days and times, it is difficult for someone in business not to understand that there is a whole morass of rules and regulations from local, state and federal governments that small businessmen must be aware of in order to operate in today's environment. The days of the "village smithy under the spreading chestnut tree" have gone by the wayside. Local, state and federal rules and procedures are not the only constrictures which the small businessman is faced with, however. Today' small businessmen must understand how he or she can protect property rights from appropriation by a third party.

"Intellectual property" is a term used to describe protectable intangible properties that can be valuable assets to a business. Knowledge of the basics of these properties is necessary in today's business environment. The following is intended as a "primer" for the small businessman.

Article 1, Section 8, Clause 8 of the U.S. Constitution as ratified by the States in 1790, declares "The Congress shall have the power ... to promote the progress of science and useful arts, by securing for limitedbtimes to authors and inventors the exclusive right to their respective writings and discoveries." This is the basis for the U.S. version of two of the three forms of intangible property - copyrights and patents - commonly recognized around the world today. The third form, trademarks, arose from common law although all three now have been blessed by federal regulation in the form of statutes. Two of the three - copyrights and patents - have been preempted from state law jurisdiction under the Commerce Clause.

Although copyrights and patents have the same constitutional background, they have taken dissimilar paths along the way to their present state. Copyrights are secured for literary and artistic expressions. Patents are directed to functional inventions and ornamental designs. Each has a predetermined life set forth by statute. Trademarks differ from both copyrights and patents in that they have an indeterminate life and serve to identify the commercial origin of a product or service.

A "patent" is a governmental grant giving the patent owner the right to preclude others from making, using and selling the invention covered by the patent for a limited period of time. In this regard a patent is not a monopoly, as the patentee may be precluded from practicing his/her own patent by an earlier issued patent of another.

It should be understood that some patents are "broad" in scope and some are "narrow"; some patents are strong and some are weak, i.e., likely to be held invalid by the courts. Those patents which are narrow and weak frequently offer no substantial patent protection, and the expense of seeking them must be justified, if justifiable at all, on secondary values other than patent protection. The amount of "showing" required to obtain a broad and strong patent is usually greater than the amount of work required to obtain a narrow patent.

The worth of a patent is influenced by the factors of breadth and strength, but the value is not solely determined by these factors. The commercial value of an invention that the patent protects, of course, underlies all other patent evaluation factors. While many broad and strong patents do not earn the cost of obtaining them, sometimes a narrow patent from a claim construction viewpoint may be worth much more than it costs because the narrow feature that it protects has great commercial value or because of its secondary values.

For example, a patent or patent application that offers little or no substantial patent protection may still be of value for its advertising effect, may support an exclusive dealership contract which would be in violation of the antitrust laws in the absence of a patent, may support a manner of doing business or contract by which tax money is saved, may add strength to a know-how license, may be of value in a cross-licensing arrangement, or may constitute the foundation of a defense against a charge by a third party of infringement of a patent. It is also true that narrow patents often discourage competition while the competitor investigates the strength and coverage of the patent, thus giving the patent owner the advantage of a head start on competition which may later develop in spite of a patent which is of limited scope.

Trademarks (for products) and service marks (for services) are source symbols. Consumers may not care about the identity of the source of products and services they desire, but recognize by some word, phrase or symbol that the product and/service has the same quality as they have had in the past. Trademarks arose from common law of England and Europe, unlike patents and copyrights which have a Constitutional basis. Now, trademarks are regulated by statute under the Lanham Act (also known as the Trademark Act of 1946).

Trademarks are not a recent phenomenon. In the middle ages, vendors used "hallmarks" to identify their goods and services to the consuming public. Even then, merchants realized that people tend to identify with trademarks and to purchase those same goods over and over.

Trademark common law developed to protect those marks that had obtained a secondary meaning, and to prevent the likelihood of confusion that would develop among consumers if the trademarks were not protected. Also at that time, the Courts of England would award damages for infringement. However, trademark protection was valid only where a provider of goods or services was located; it was not global. Today, trademarks can be protected throughout the world.

A trademark is a distinguishing aspect of a product. It is most often a name, but it can also be:

(a) a symbol;
(b) numbers, i.e., a phone number;
(c) ornamentation;
(d) a container design;
(e) call letters (T.V./Radio);
(f) a series of sounds;
(g) three dimensional objects;
(h) colors or a combination of colors;
(i) phrases; and
(j) fragrances.

On the other hand, generic and descriptive terms are not considered trademarks.

Trade dress has been defined as "words, names, symbols, and devices, alone or in association with other matter, including but not limited to graphic and pictorial indicia, style, and placement of script, color, and the totality of individual components of a label, point of sale display or even the interior of a building which conveys, or is susceptible of conveying, a unitary source Generated, commercial impression."

17 U.S.C. § 102 defines what is capable of being the subject matter of a copyright. "Oriizinal works of authorship fixed in any tangible medium of expression now known or later developed from which they can be perceived, reproduced or otherwise communicated either directly or with the aid of a machine or device."

To be subject to copyright, a work need not be "novel" in the sense of a patent, for example. It need be only an independent creation of or originate with the "author". The "author" is the beginner, first owner, creator, originator of a work. A "discovery" is not an "original" work.

A work is "fixed" if it can be perceived either directly or with the aid of a machine or other device. Fixation may take the form of words, numbers, notes, sounds, pictures, graphic or symbolic indicia. Then fixation must be more than merely "ephemeral" in nature. Live broadcasts and momentary transitions in computer memory must be separately "fixed" to obtain protection.

Care should be exercised in defining a "work." A "book" is merely the embodiment of the words, pictures, etc., that form the literary work. The same literary work may also take the form of phonograph records, tapes, audio/video films and the like.

Works of authorship include the following categories:

(1) Literary works;
(2) Musical works, including any accompanying words;
(3) Dramatic works, including any accompanying music;
(4) Pantomimes and choreographic works;
(5) Pictorial, graphic, and sculptural works;
(6) Motion works and other audio/visual works;
(7) Sound recordings; and
(8) Architectural works (added December 1, 1990).

In no case does copyright protection for an original work of authorship extend to an idea, procedure, process, system, method of operation, concept, principle, or discovery, regardless of the form in which it is described, explained, illustrated, or embodied in such work. 17 U.S.C. 102(b). Copyright only protects the words with which an author has expressed facts and ideas. Copyright does not protect the facts or ideas themselves. Facts and ideas are free for anyone to use. First Amendment, U.S. Constitution.

A copyright may also lie in compilations and derivative works of any one or more of the above. Copyright protects only the expression of an idea, not the idea itself. As such, the idea must be original, i.e., not copied from another (but can include portions of others' copied words viz. Compilations and derivative works).