Patents v. Trademarks - Which One Should You Get?

By: Elias Borges, patent & trademark lawyer.

A client asked me the other day, “what’s a better form of protection, patents or trademarks?” Without giving a lot of thought to the question, I answered “Trademarks are my favorite form of intellectual property”. Of course, it’s not a question of which type of protection is “better”, it’s really a question of which type of protection is available.

Trademarks are a powerful and valuable form of legal protection. A trademark can be any word, name, short phrase, combination of characters, logo, design or even sound which is used to identify your products and/or services. A trademark registration protects the trademark against anyone who might attempt to use a mark which is “confusingly similar” to the registered trademark. The registration process is relatively quick and inexpensive, and the registration lasts as long as the trademark is used. Indeed, the COCA COLA trademark registration is over a hundred years old. Best of all, a trademark registration can be incredibly valuable once the trademark becomes famous. For example, by some estimates, the LEXUS trademark adds as much as $7,000.00 to the value of a vehicle (i.e. the amount extra that you have to pay because the car, which is really a Toyota, bears the LEXUS trademark). Trademarks are so valuable, that countless books have been written on the subject of how to increase the value of your trademark (i.e. “Branding”). From my perspective, I like trademarks because they are relatively easy to register for clients, provided a few simple rules are followed when selecting a trademark. These rules are:

• Don’t use a mark which is confusing with another trademark;
• Avoid using generic words in the trademark;
• Avoid using words in a trademark that simply describe the products or services which are associated with the trademark;
• Don’t use a surname as a trademark, and most importantly,
• Pick a trademark which is as unique and distinctive as possible.

As long as the client follows these rules, it is quite likely that the trademark can be registered. That’s why I like trademarks so much. Trademarks are easy (sort of).

Despite their obvious benefits, trademarks have one “disadvantage” (from the trademark owner’s point of view). Trademarks do not protect products or services, they only protect the “good will” of the company (or person) who sells the products or services. Hence, the trademark registration for “COCA COLA” does not prevent anyone from manufacturing or selling a carbonated beverage that tastes exactly the same as Coca Cola’s product. Hence, while powerful, trademark registrations may not be enough to protect a client’s interests.

Patents, on the other hand, do protect products. More to the point, patents protect inventions. That invention could be a new machine, a new material, a new chemical, a new product or a new method of doing something. The patent gives the patent holder the right to legally restrain anyone from making, using or selling any product or service that is covered by the patent. Hence, a new product can be protected by a patent, and the owner of the patent has a monopoly on the manufacture, sale and use of the product. As you can imagine, patents can be very valuable. Indeed, if you’re a relatively small player, patenting your new product or service may be the only way to secure your market share. Furthermore, since patents create monopolies, it is often possible to demand outrageously high prices for patented products. For example, drugs covered by patents often cost several times as much as their none-patented counterparts. Indeed, I recently filled a prescription for a patented medication that cost me over $200 while an “over the counter” equivalent (which was nearly as effective by the way) cost a mere $12. The extra $188 went directly into the drug manufacturers pocket (nice work if you can get it).

However, patents have several major “problems” (from the patent owners point of view). Firstly, they are not always easy to get. To be eligible for patent protection, the invention must be useful, novel and inventive (i.e. they must not be obvious). Publishing an invention prematurely can prevent the invention from being novel. As for inventiveness (i.e. non-obviousness), that is a much harder test to pass. Suffice it to say that oftentimes inventions fall short when it comes to inventiveness. From my experience, “cutting edge” products which represent the “state of the art” in an industry generally pass the inventiveness test.

Secondly, even if the invention is capable of being patented, it can take a long time to actually be granted a patent. Indeed, it may take years. However, there are a few recent developments with US patent practice which might speed the process up considerably (more on that in a later article).

Also, when a product becomes fabulously successful, competitors may try to “get around” the patent by trying to introduce a product which is similar but not the same. If the patent is sufficiently broad, the only way a competitor can avoid legal action is to produce a product which is very different. Nevertheless, there is a possibility that competitors may attempt to “design around” the patent. This can be avoided if there are several patents covering the same product.

However, from most patent owner’s point of view, the biggest “weakness” of patents is that they have a limited life-span. Indeed, patents are enforceable for only 20 years (more or less). There is no way to extend the life of a patent; however, it may be possible to patent improvements to the product, and thereby effectively extended the patented “life” of the product.

The best approach is to marry patent protection with trademark protection. Use your patents to buy yourself a monopoly for a decade or two, and during that time, build the value of your registered trademarks so that when your patents do expire, your trademarks will have a great deal of value. This is the approach taken by many successful companies. In my experience, marrying patent protection with trademark protection is the best way to build value in your business.