By Brendan S. Lillis, originally published in Guide to International Business Expansion to the U.S., Invest Buffalo Niagara on February 2019.

Patents and Trademarks

Intellectual property (“IP”) can be a valuable asset in support of a business expansion into the U.S. Two common forms of IP protection are patents and trademarks. A patent protects your company’s inventions or discoveries, while a trademark serves as an identification of the source of your goods or services, often through the use of brand names, taglines and logos.

Companies should be aware that both patents and trademarks are national rights that start and stop at international borders. Patents and trademarks issued in countries outside of the U.S. are not directly enforceable in the U.S. Protecting your IP in the U.S. (and all countries where you plan on doing business) should be a priority.

Always Consider Trademark Protection

Trademark rights in the U.S. are based on the actual use of a mark in commerce. Certain common law rights to a trademark are immediately acquired upon the use of a mark in the U.S., but the scope of these rights can diverge from state to state and are limited to the specific geographic regions of use. A much greater set of rights is obtained through federal registration with the U.S. Patent and Trademark Office, including nationwide priority and the right to bring an infringement lawsuit in federal court. Federal registration will also help prevent the registration of another confusingly similar mark by a competitor.

In the context of business growth, you want to be sure at an early stage that your preferred brand names will not risk infringing the rights of a third party in your planned area of expansion. The trademark prosecution process will help you identify potential issues with confusingly similar brands that are already established in the marketplace. One of the first steps prior to filing a trademark application should involve performing a search for any existing use of your desired name and close variants. The search process can vary from simple to comprehensive in scope, depending on your business needs at the time.

Far too many companies need help correcting deficient trademark applications that were filed by individuals or through various non-legal services, so when it comes to filing for trademark protection, it is generally recommended that companies engage qualified legal counsel at the outset. Companies can expect, on average, to pay an attorney approximately $1,500-$2,000 total per trademark application from start to initial registration. Trademarks are a cost-effective means for building value in your brand (and by extension, your company).

Consider Patent Protection If It Makes Sense For Your Business

An international company that has developed a new product may be able to obtain protection for its invention by securing a U.S. patent. Patents can be very valuable because they allow companies to stop others from making, using, selling or importing the underlying invention. However, patents can also be expensive to draft, prosecute and maintain, exceeding $10,000 in all but the most simple cases.

Accordingly, if your business is considering patent protection, you need to determine how patents fit in with your broader business goals. Are you looking to strike licensing deals? Do you want to aggressively enforce your rights in the industry? Are you looking to use patents as a shield against bigger market players? Is the goal to use patents to help attract institutional investment? All of the above?

While it is recommended that companies file for patent protection prior to any public disclosure, use or offer for sale of the invention, U.S. patent law may also allow an application to be filed within a one-year grace period of the initial public disclosure. Additionally, companies may consider filing provisional patent applications in the U.S., which can initially be cost-effective and will reserve filing dates for a one-year period.

It can be helpful to consult with a U.S. patent attorney that has both the background technological knowledge that is required to understand your invention, as well as familiarity with the broader business strategies of your company.

For more information on this topic, please reach out to Brendan S. Lillis, an attorney at Phillips Lytle LLP. He can be reached at (716) 847-7058 or blillis@phillipslytle.com.