Chester Carlson had what he considered to be a brilliant idea. Frustrated with the slow and cumbersome mimeograph and the high cost of photography, he experimented one October evening in 1938 with a new way of copying. From his painstaking efforts emerged an electrostatic process that could reproduce words on a page in just minutes.

Despite its seemingly unlimited potential, the invention was viewed at the time as impractical by the potential backers Carlson sought to enlist. Turned down by IBM and the U.S. Army Signal Corps, among others, he eventually prevailed. Eight years after Carlson's first experiment, he persuaded the Haloid Company to invest in his invention and xerography (from the Greek for "dry writing") and the Xerox Corporation were born.

Protecting Intellectual Property

A research engineer turned patent attorney, Carlson was well aware of the importance of protecting his new discovery. Fearful others might be blazing the same trail, he filed a patent application in April 1939. As he said at the time, "I knew I had a very big tiger by the tail." The company also quickly trademarked its name and has worked vigilantly to protect it ever since.

Today, hundreds of thousands of inventors and innovators file each year for protection under U.S. patent, trademark and copyright laws. In 1995, 236,679 patent applications were filed and 114,241 issued, 175,307 new trademark applications and 7,220 renewals filed and 72,447 issued, and 609,200 copyrights registered.

However, a great deal of confusion exists about which of the three vehicles is most appropriate for the protection of an invention. Although a single product or service may require a patent, trademark and copyright, each category protects a distinct aspect of a creative work or expression.

Patents protect an inventor's discoveries and are granted to individuals as well as major corporations. Patents are granted in three categories: utility, design and plant. You cannot obtain a patent on a mere idea, suggestion or method of doing business.

Trademarks, on the other hand, protect the goodwill that is created when customers associate a name or other indicator of source, origin or sponsorship with your product or service. In laymen's terms, indicators of source, origin or sponsorship can mean product packaging, a likeness or a particular scent.

Copyrights protect authors and artists from unfair use of original work fixed in a tangible medium, such as a book, recording, fabric pattern, architectural work or computer program. The "fixed" requirement was created to preclude protection of ideas floating in around in a person's head.

Three Types of Patents

Utility patents encompass the broadest territory. Inventions must be useful and fit into at least one of five categories: a process, a machine, a manufacture, a composition of matter, or an improvement of an existing idea that falls into one of these categories. Often an invention will fall into more than one. For example, computer software can be described as both a process (the steps it takes to make a computer operate) and a machine (an instrument that carries information from an input device to an output device).

Design patents are granted for the invention of designs that are innovative, nonfunctional and part of a functional manufactured article. For example, a new shape for a car fender or flashlight that doesn't improve its overall functionality would qualify.

Plant patents are just what their name implies. They can be granted for any asexually or sexually reproducible plants, such as flowers, that are both novel and nonobvious. Examples would include a new color of climbing rose or a new variety of apple.

Obtaining a Patent

The procedure for obtaining a patent is frequently misunderstood. The key is awareness of the ways patents do and do not protect inventors' rights regarding their discoveries. Utility and plant patents are granted for a term that begins on the date of the grant and ends 20 years from the date the application is first filed. Design patents are granted for a 14-year term, which begins on the granting date.

"A patent is a form of social contract," explains Stuart Kaler, a patent attorney at Morrison and Foerster in San Francisco. "It's written in the negative. In the U.S. you don't have to do anything with a patent because it gives you the right to exclude, rather than the right to manufacture or produce something, and the right to stop infringement by suing. In other countries, if you aren't producing your invention, others can but they must pay royalties for doing so."

Most inventions qualify for a patent if they are novel or offer something new and are nonobvious, that is, someone skilled in the particular invention field would consider the work unexpected or a surprising development. Examples would include a new tool for applying a surface coating or a new rolling pin with interchangeable parts that can be converted for a different use in food preparation.

Applying for a patent is not just a matter of filling out a simple form. Your application must be written in great detail and include drawings of the work.

"A patent must enable someone skilled in the particular art to reproduce the invention without undue experimentation," Kaler elaborates. "It's part of the social contract. In return for receiving a monopoly and the chance to make money, you are contributing to the betterment of society."

In addition to the technical description, you must also include one or more "claims" that describe the specific aspects of the invention that deserve the patent. In other words, you need to precisely define the metes and bounds of your invention which, if trespassed upon, will result in infringement.

The composition of a claim is critical. It should cover devices currently being used or likely to be used in the not-too-distant future. The Supreme Court has described a patent as one of the most difficult legal documents to prepare. For this reason, most inventors retain a registered patent attorney or patent agent - someone who has demonstrated the requisite qualifications to the U.S. Patent Office - to prepare patent applications.

Keep It to Yourself

Until you file a patent application, keep your idea to yourself - for a number of reasons.

"Be extremely cautious about who you talk to before you file for a patent," advises Lawrence Udell, head of the California Invention Center in San Francisco. "Ideas can be stolen, so keep yours close to the vest."

Theft of your idea isn't the only reason to be discreet. Under U.S. patent laws, you have a one-year grace period in advance of your application. During that time, you can disclose or commercialize your invention in any way. However, if you describe your work in a publication or commercialize it at any time beyond that year and before applying for a patent, your application can be denied.

Moreover, this restriction could be your downfall if you're drawn into a court battle with an alleged infringer. Your patent may be held permanently invalid and unenforceable if the infringer can prove you offered to sell a device containing your invention more than a year before you filed for a patent. The same result may occur if you show or demonstrate an invention to the public, for example at a trade show.

Licensing Your Invention

Most inventors do not develop their patented work themselves. Instead, they make arrangements with an existing company to do it for them. Typically, this arrangement takes the form of a license that authorizes the developer to commercially exploit the invention in return for paying the patent owner royalties for each invention sold.

"The real advantage of a patent to the individual inventor is to have something that will help you negotiate royalties or the sale of your invention," Udell believes. "And never do your own negotiating. Either have your lawyer negotiate or ask your lawyer to suggest another person. Inventors are often so excited that someone is interested in licensing or buying their idea that they leave too much money on the table."

He advises inventors to do their homework prior to approaching a potential developer. "Do your market research so you can explain who will buy the invention and what need it fills."

Making Your Mark and Protecting It

Companies have been using trademarks to distinguish their products since before the advent of Christianity. However, it wasn't until the Middle Ages that laws were enacted prohibiting the practice of "palming off" one's goods as those of another.

Today, U.S. trademark law emanates from similar principles. Designed to avoid the likelihood of confusion, the law is based on the concept of first usage. In other words, you don't need to register a trademark or service mark to establish rights to it. You can create "common law" rights simply by using it, thus establishing prior use. And trademark rights can last indefinitely if you continue using the mark to identify your goods or services.

However, registration of your trademark or service mark does offer distinct advantages. If you're sued for trademark infringement, it is up to the courts to decide who owns the right. Once your mark is registered with the U.S. Patent & Trademark Office, you can use your trademark and the symbol with your product or service and enjoy all the protection this affords.

The Importance of a Trademark Search

While you aren't required to conduct a search for conflicting marks before applying, it can save you a lot of problems later on. For example, a company embarked on an expensive advertising campaign to promote a new product. At the time, the staff was so eager to get the product on the market that no one bothered to determine whether the name chosen for it had already been trademarked. As it turned out, another firm had already registered the name, so the ad campaign had to be scrapped in its entirety.

If you don't have the time or resources to conduct a search on your own, a professional search agency can do it for you. If you would prefer to do it yourself, visit any of the 80 patent and trademark depository libraries located throughout the country. In addition, several private, subscription-based companies such as Dialog and CompuMark offer access to an on-line database that lists federal, state and some international trademarks.

The effort expended in obtaining a trademark is well worth it, according to Jeanne Allen, co-founder and owner of San Francisco-based Jeanne-Marc high-fashion women's apparel. "The process can be daunting," she admits, "but even though it's expensive, consider it a cost of doing business. It's not something you can go back and do again the right way another time.

"A lot of issues have arisen that made us glad we have a trademark," continues Allen. "A huge clothing company came out with a line called 'John Mark' which, to the ear, sounded exactly the same. We challenged the firm - it was like David fighting Goliath - and they withdrew the name. To use another example, we licensed our line with a different large company. They picked up one of our designs and sold it through one of their proprietary lines. We went after them and got a settlement. In both cases, we did our homework, so that even though we're small, we were able to prevail."

Allen adds, "You have to protect your business. A trademark isn't required by law so people tend not to spend the time. But as a small business, you have to take trademarks seriously."

Copyright Protection

Like trademarks, the concept of copyrights dates back hundreds of years. King Diarmed of Ireland, circa 550, declared "to every cow her calf" upon Abbot Fennian's accusation that St. Columba secretly copied his Psalter or collection of Psalms.

Today, copyright law applies to all types of original expression, including literature, sculpture, choreography, CD-ROMs, video games and even flow charts. In the U. S., a copyright is viewed as part of the work as well as protection of it, and therefore is not granted by a government agency. Moreover, publication is not required for protection.

Explains attorney Stephen Elias in his book, Patent, Copyright & Trademark, "The key to understanding copyright law is to understand the difference between an idea and the expression of the idea. Copyright applies only to a particular expression, not the ideas or facts underlying it. For instance, copyright may protect a particular song about a romance in space, but it cannot protect the underlying idea of having a love affair among the stars."

A creative work or work of authorship must meet three criteria to be protected by a copyright.

- It must be original. In other words, the author must have created rather than copied it.

- It must be fixed in a tangible medium of expression; for example, on paper, audio or video tape, computer disk or canvas.

- It must have at least some creativity; that is, it must be produced by an exercise of human intellect.

The easiest way to gain copyright protection is by placing the copyright symbol, date of publication and your name or name of your company claiming the copyright on the work prior to its publication. A copyright generally lasts for the life of a work's creator or author, plus 50 years. In cases where the creator is a business, a copyright lasts between 75 and 113 years.

While registering your work with the U.S. Copyright Office is not necessary to obtain basic protection, it can enhance your chances of success if you are forced to go to court to enforce your copyright. While you can apply for a copyright at any time, you must register your work before suing for copyright infringement.

"Registration within three months of the work's publication date, or before the infringement actually begins, makes it easier to sue and recover from an infringer," advises Elias.

Your Primary Asset

Protecting your intellectual property is as important as protecting your real property - if not more so - as your product, name or work of art can hold the key to your success. "In writing patent, trademark and copyright protection into the Constitution, our founding fathers envisioned a system that did more than grant a monopoly," observes Deputy Commissioner of Patents and Trademarks Lawrence Goffney, Jr. "They saw the pursuit of happiness as a way people can be free to do their best. Intellectual property protection encourages small businesses to become big businesses. It is just as important as free speech and due process of law."

10 Commandments for Inventors

Joanna Hayes-Rines, editor of Inventors' Digest, has spent more than 10 years advising and advocating for inventors. More than a monthly collection of articles, Inventors' Digest also serves as a valuable networking resource. Based on her own experiences, as well as those of her subscribers, Hayes-Rines has assembled what she calls "l0 Commandments for Inventors."

1. Stay away from invention marketing companies that advertise on radio and late night TV. They're out to fatten their wallets and empty yours.

2. Keep good records about your idea and its development. Some day you may need those records to prove your idea is actually yours.

3. Build a model. There is no need to get fancy at first - cardboard, white glue, balsa wood, off-the-shelf parts are sufficient. No matter how simple the idea, prove it works.

4. Have your invention evaluated by a nonbiased professional. Even if your parents are in the business, take your invention to someone else.

5. Learn all you can about the process of new product development to better enable you to take your product from a concept in your head to the shelf. Go to your local library or book store. Don't reinvent the wheel.

6. Network with other inventors. Join a local inventors organization. Attend conferences and conventions.

7. Conduct your own patent search. Go to one of the 80 patent and trademark depository libraries located throughout the U.S. to determine if your invention is already patented. If it is, there is obviously no need to go to a patent attorney.

8. If your patent search shows that your creation has potential, make an appointment with a patent attorney. Show the attorney the results of your search and follow the advice you are given.

9. Do what you do well and hire professionals to do the rest.

10. Don't fall in love with your invention. But if you're confident you have a winner, hang in there. Even overnight successes take time.

Now working on additional commandments, Hayes-Rines offers more advice to inventors.

"Get involved with organizations, like the California Invention Center or Small Business Development Centers (SBDCs), which can help take your product or service to market. Start thinking like a business person. Develop a business plan. Look down the road to the future and what it might hold that is relevant.

"Do your market research," urges Hayes-Rines. "If you don't know whether there is a need for your product or service and how and where it could be sold, you'll be lost from the beginning. Also do some subtle market testing. Go into a hardware store and ask, 'Do you stock something that does X?' or 'Do you get many requests for a product that does such-and- such?' and describe how your product functions."

Hayes-Rines underscores her final point with three important words. "Just as the key to real estate success is location, location, location, the key to the success of your invention is marketing, marketing, marketing."

Profile: James Fergason

People all over the world owe James Fergason a resounding thank you. For as the inventor of liquid crystal display, he revolutionized the way we tell time, made it easy to take our computers on the road and brought us that ubiquitous piece of 1970s jewelry, the mood ring - just to name a few of the hundreds of LCD applications.

"I was working at Westinghouse Electric when I had my initial brush with LCD in 1958," he recalls. "The first device I developed was a thermometer forehead band. I then burrowed in, learned as much as possible about LCD and used it to solve problems."

His solutions included digital display alarm clocks, radios and calculators, laptop computer screens, microwave oven control pads and airline movie screens. Today, the holder of more than 113 U.S. patents and more than 500 foreign patents, Fergason is a seasoned veteran of the patent and licensing process. He learned the ropes the hard way.

"A major overseas company hired a fellow from the U.S. who knew about my work," says Fergason. "He published a paper on my technology without citing my name or the paper I had already written on the subject. He then filed for a patent in several countries and was able to get one. As we were a very small and very poor company at the time, we didn't have the money to fight all over the world. We ended up selling the patent to the foreign company for royalties. The same company is also responsible for licensing."

Fergason pauses, then notes ruefully, "I learned a lot about licensing."

Despite his early experience, Fergason encourages other inventors not to be dissuaded from approaching large companies about licensing. The key is to protect your idea before going in, via a patent, trademark or copyright.

"If you have something you believe is really worthwhile and applicable to what a big operation does, then go for it," he urges. "Look for a champion, preferably someone near the top. Most large companies are very scrupulous and don't want to be accused of ripping off your invention. However, it's important to have documentation about your invention on file at the Patent and Trademark Office before you approach anyone."

The bottom line, he adds, is that licensing your invention boils down to a matter of sales. "As you're trying to sell something, you need to present a marketing plan," Fergason emphasizes. "For instance, what are the benefits to the company? Who comprises the market? Is your invention something a lot of people will potentially use and need? And how will it be manufactured? Will it be built separately, then incorporated into something else?

"Once you get someone interested, talk to a patent attorney," Fergason continues. "The legalese can be very thick. And if possible, don't negotiate as a principal. For whatever you say during the negotiations will be final. If a representative negotiates as a non-principal, this person can subsequently come back with the offer and you have time to consider it carefully. Inventors who negotiate directly are making a mistake and are at a tremendous disadvantage. They typically take a lower price than they deserve and leave a lot of money on the table."

Wal-Mart Invention Network

A marketplace giant is giving something back to the people on whose ingenuity and innovative spirit its shelves depend. Wal-Mart, the big daddy of mass merchandisers, is the benevolent benefactor of a program that gives American inventors entree into the marketplace, offering the kind of exposure once only dreamed of. The program, the Wal-Mart Invention Network (WIN), is a network of 2,000 resource partners around the country that assists independent inventors who have developed commercially viable ideas. Headquartered at Southwest Missouri State University, it first emerged as a National Science Foundation experiment by its executive director Gerald Udell.

"WIN is part of Wal-Mart's Buy American program, which is designed to create and maintain manufacturing jobs in the U.S.," Udell says. "Our primary objectives are to stimulate innovation and, bottom-line, generate jobs for American workers."

Here's how it works. Inventors submit their ideas to WIN for evaluation. The ideas are then measured against the 41-criteria Preliminary Innovation Evaluation System developed by Udell.

"The intent is to give inventors a profile of the risk involved in bringing the product to market," Udell explains. "We do a commercial feasibility analysis that identifies the product's strengths or weaknesses. In some cases, we determine that an idea has potential but needs improvement, so we send it back to inventor with suggestions for improving and reworking it. In other cases, we say no to an idea because, for example, it's already in the market or has been introduced and failed.

"Ultimately, if we feel the idea has merit, it is sent to Wal-Mart buyers for a further, market-specific evaluation. If the buyers concur with our assessment, the innovator is referred to a local WIN partner for assistance in bringing the product or service to the marketplace."

The program is also educational, according to Udell, who has witnessed firsthand the wide cultural gap that exists between inventors and the business world. Therefore, those submitting ideas to WIN receive a manual that not only explains the innovation and evaluation processes, but also offers lessons in business terminology and practices.

"A Florida inventor developed a mailbox device that alerts you when mail has been delivered," Udell recalls. "He sent me one, ready to attach, along with one to give to Wal-Mart for its mailbox. What the inventor didn't realize was that Wal-Mart is so large that it even has its own zip code and post office. Up until they become inventors, exposure to the marketplace of people such as the man in Florida is primarily - if not solely - as consumers. Now they have to start thinking as suppliers as well."

Lawrence Udell (no relation), director of the San Francisco-based California Invention Center, a senior WIN partner, points to further cultural gap problems. "American corporations are besieged by inventors trying to sell their ideas. These companies are fearful of talking to inventors because of potential liability and lawsuit problems, so they avoid them. As a result, inventors often become discouraged and put their ideas on a shelf, only to see them successfully marketed by someone else several years later. Plus, the companies miss out on potential product or service opportunities."

In the seven years since its inception, WIN has accumulated a scrapbook of success stories of which Udell is justifiably proud.

"A Northern California inventor, Jason Clute, invented a device to reduce the risk of Sudden Infant Death Syndrome," Udell relates. "His business has created more than 200 jobs, many in California, and most importantly he has saved the lives of about 1,000 babies. You can't get much better than that."

For information about submitting an invention to the Wal-Mart Invention Network, contact: Center for Business and Economic Development, Southwest Missouri State University, 901 South National Avenue, Springfield, MO 65804. (417) 836-5671.

Excerpted with permission from Small Business Success magazine, Volume X, produced by Pacific Bell Directory in partnership with the U.S. Small Business Administration and the Partners for Small Business Excellence.