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Updated: March 27th, 2020
Protecting your business’s intellectual property is just as important as protecting your business’s physical property. Patents can be used to protect your intellectual and creative work product, which usually comes in the form of an invention or new process.
A patent is a grant of a property right for a set period of time, excluding others from making, using, or selling your invention or process.
The three types of patents are utility patents, design patents, and plant patents. A utility patents protect the function of a composition, machine, or process. A design patent protects the decorative appearance of an item. A plant patent protects a new or distinct variety of a plant.
Utility patents are applicable to the invention, discovery, or improvement of any useful process, machine, article of manufacture, or composition of matter. For example, a utility patent would be used to protect a new process of making a computer (process), a new type of computer (machine), a computer part (article of manufacture), or a new chemical (composition of matter).
Design patents are applicable to the invention of a new, original, and ornamental design for an article of manufacture. For example, a design patent would be used to protect visual characteristics or aspects of a computer (assuming that it is new and unique). Design patents only protect the appearance of an item, but not an item’s structural or functional features.
Plant patents are applicable to the invention or discovery and asexual reproduction of any distinct and new variety of plant. For example, a plant patent would be used to protect a new type of plant variety discovered or bred.
The best way to explain this is in a practical example:
John invented a new type of phone case that charges your phone with solar energy. The case charges your phone when the back of the case is flipped open to expose mini solar panels.
In this scenario, John would likely apply for a utility patent for his invention of the phone case that charges a phone with solar energy. John might also simultaneously apply for a design patent for how the case is designed to flip open to expose mini solar panels.
In order for an invention to be patentable it must be new and not obvious (meaning someone in the same field would be surprised by such an invention).
The first step in applying for a patent is to determine that there isn’t already a patent out there that covers your idea. You can do a quick patent search through Google’s Patent Search. The United States Patent and Trademark Office (USPTO) also has a great guide on patent searches.
Once you’re ready to file, you will need to prepare the following parts of your application for the USPTO:
After you file the application, it may take a number of years before it is approved (see below for other options in the meantime). A patent examiner will be assigned to your case and you will need to respond to any questions and objections raised. If your case is found allowable, then your patent will issue as soon as you pay a fee. Patents generally last for the duration of 20 years. After that, it’s free game and anyone can use it.
There are some other methods of protecting your intellectual property if you’re unable to get a patent or if you’re waiting for a decision from the USPTO. You can file for a provisional patent, which would allow you to state that your product is “patent pending.” A provisional patent application does not require claims or an oath/declaration.
In addition, you can have your employees agree to certain contract clauses, such as a non-disclosure agreement (NDA) and a non-compete agreement. An NDA is essentially a confidentiality agreement outlining the scope of confidential information and barring disclosure of such. A non-compete agreement would bar your employees from entering into or starting a similar profession or trade in competition with you. These methods would allow you to protect your idea as a “trade secret.” Unlike patents, trade secret protection lasts for as long as the secret is kept confidential (which can be forever… look at Coca-Cola!).
Michael Jones is a Senior Editor for Funding Circle, specializing in small business loans. He holds a degree in International Business and Economics from Boston University's Questrom School of Business. Prior to Funding Circle, Michael was the Head of Content for Bond Street, a venture-backed FinTech company specializing in small business loans. He has written extensively about small business loans, entrepreneurship, and marketing.