One question that many entrepreneurs face is whether and how to use intellectual property (IP). IP rights for custom software can be particularly tricky to understand. In this post, we’ll discuss some of the basics and most common questions we get from our new clients. Although this article should teach you some of the basics, each case is unique.

One thing that makes software unique is that it can be protected by any of several types of IP. The most common of these are copyright and patent protection. Others, like trademark or trade secret protection, are not addressed here, but can be important as well. Often, inventors apply for more than one of these.

Copyright

The most recognizable type of IP in the world of software, due to infamous litigation over filesharing and recent legislation like SOPA, is probably copyright. Copyright applies to any “original works of authorship fixed in any tangible medium of expression,” and lasts for decades, or even over a century, in some cases.

Copyright is unique in that it is automatic: as soon as code is saved to disk, a “common law” copyright exists. A copyright registration can usually be acquired, with a small filing fee (currently $35), which allows the copyright owner to receive larger statutory damages and makes it easier to prove ownership of the code at trial. An attorney can help with the registration process, usually for a few hundred dollars, though many authors feel comfortable doing it themselves. Copyright protects against exact copying, but since it protects the expression of the idea, rather than the function, it cannot protect against a competitor who changes or rewrites code to do the same function.

Patents

Patents are more time-consuming and difficult to acquire, but the scope of protection can be much broader than a copyright. Patents provide a temporary, government-sanctioned monopoly on the claimed technology.

The patent application process often starts with a “provisional” patent application. These last for one year, and are never examined by the Patent Office or published. If, before the year is over, the inventor wants to continue, he or she can file a non-provisional or “utility” patent application claiming the benefit of the provisional application’s filing date. The utility patent application is examined by the Patent Office, which can take a few years. This process, called “patent prosecution,” resembles a series of negotiations between the inventor and a patent examiner. Usually, but not always, some common ground is found where the patent examiner and the inventor agree on a scope of protection. This scope of protection is defined by a set of claims, and then the patent issues with those claims.

Typically, a patent application can be prepared within a few months, and will explain the invention (that is, what is new and useful about the software or other invention) in great detail. The U.S. courts, including the Supreme Court, have issued arcane decisions recently that affect the scope and type of software claims that can be granted. As a result, claims to software in particular are very difficult for an inventor to acquire, without the assistance of patent counsel.

Once granted, a patent typically provides about 15–20 years of enforceability, and can cover much more than a copyright. The scope of protection provided by a patent is why many large companies like Apple, Samsung, Google, and Microsoft file for so many of them. It is also why patent litigation has been called the “Sport of Kings,” as tech giants battle each other in Federal court for billions of dollars worth in royalties, injunctions, and other damages.

There are many other aspects of patent law not discussed here, like acquiring international patents, strategies for expediting or slowing down patent prosecution, and ways to shift or delay the costs of acquiring the patent. And of course, there should always be a good business reason to apply for a patent. This means thinking about whether the patent will be licensed or enforced, and if it will be enforced how to finance litigation, which can easily cost millions of dollars. For these more complex topics, as with software you will get the best results by talking with a professional to design a custom IP strategy.

Contributing Author: Daniel Bruzzone; a patent attorney at Patterson Thuente IP in Minneapolis