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The Honolulu Advertiser

Posted on: Wednesday, February 16, 2005

Patent protection vital to firms

 •  Protecting your ideas, products

By Catherine E. Toth
Advertiser Staff Writer

The mingling smells of melted chocolate and butter filled the small bakery in Kalihi.

Keith Sung designed a pineapple-shaped cookie and registered his company's name, logo and slogan with the U.S. Patent and Trade-mark office. Honolulu Cookie Co.'s treats, above, come in different varieties, including chocolate-dipped and fruit and coffee

Photos by Deborah Booker • The Honolulu Advertiser

In one room a machine squeezed out shortbread dough on a thin tray; in another, two workers dipped dozens of baked cookies into a bowl of gooey milk chocolate.

But there was one thing different about these cookies, a uniqueness that owner Keith Sung hoped would set them apart from other shortbread varieties — their shape.

Honolulu Cookie Co. makes the only commercially produced pineapple-shaped shortbread cookies in the United States. And Sung is making sure his company will always be the only one.

"People have to recognize your product," said Sung, who started the company in 1998. "When people see the pineapple shape, they know it's ours."

As soon as he decided on the pineapple shape, he hired a patent attorney to help him protect his product.

Sung registered the company name, logo and slogan. Even the shape of his cookies are protected as a "trade dress," which is the way a product is packaged, or in Sung's case, shaped.

"It cost a lot of money," Sung said, "but in the long run it will save me millions of dollars."

Entrepreneurs fall victim to copyright, trademark and other intellectual property right infringement mostly because they don't know how to protect themselves, said registered patent attorney Martin Hsia.

"Typically, most people don't want to spend the money for getting trademarks or inventions protected," Hsia said. "Then they become successful and someone copies them. That's when they'll go to an attorney and say, 'Make them stop.' But by then it's too late."

Entrepreneurs have several intellectual property rights that protect their creative ventures, Hsia said.

Patents protect inventions and designs. Trademarks protect brand names and logos. Copyrights protect creative authorship. And trade secrets protect valuable information used in business.

Without these protections, business owners would have very little legal recourse should a competitor steal the idea.

Trademarks are particularly important for companies that rely on brand-name recognition, Hsia said.

For example, Clorox sells bleach that's chemically identical to its competitors. But the company charges more for its product because of brand-name recognition, he said.

The success of a particular product may invite thieves who want to steal the brand name for profit. This happens often in foreign countries, where knock-off versions of high-end luxury items such as Prada handbags are sold.

And entrepreneurs who want to venture into other countries should beware.

Jim Wayman, president and chief executive officer of Hawaii Coffee Co., learned about that the hard way.

Hawaii Coffee Co. was formed in 2000 when Paradise Beverages bought and merged both Lion Coffee and Hawaii Coffee Co. Inc., then a subsidiary of C. Brewer & Co. Ltd.

The company now operates three brands of coffee — Lion, Royal Kona and Hawaii Coffee — in addition to Hawaiian Islands Tea, which it acquired last year.

But it wasn't until the company merged that Wayman discovered its Royal Kona brand hadn't been registered outside the United States. Another company had taken the brand's name and logo, he said.

"Lion Coffee was fully protected in every major country in the world, so we were in very good shape from the brand protection point of view," Wayman said. "But Royal Kona was primarily a food service brand. It was trademarked in the United States but not in a lot of other countries. We found that out when we applied for a trademark in China and found out that someone had already trademarked it there."

Though no one in China has marketed a Royal Kona product, Wayman said it's a huge concern for his company, which had wanted to expand into that market.

"It's unbelievably critical (to register your trademark) because, though it doesn't necessarily show on your balance sheets, as you grow, it's the most valuable asset you have," Wayman said. "If you don't have the clear-cut right to it, someone else can step up and say that it's theirs, and that's the scariest proposition I can think of. You're spending all of your energy and money building your brand and at some point someone can stop you from using it or take it away from you."

Reach Catherine E. Toth at ctoth@honoluluadvertiser.com or 535-8103.

• • •

Protecting your ideas, products

There are ways entrepreneurs can protect their product or service from piracy. It may take some work and a lot of money, but many business owners will say it's worth it.

Here are some tips from experts:

Helpful Web sites

U.S. Copyright Office: www.copyright.gov

U.S. Patent & Trademark
Office: www.uspto.gov

World Intellectual Property Organization: www.wipo.int

Federal Communications Commission: www.fcc.gov

The Federal Register of the Government Printing Office: www.gpoaccess.gov/fr/

"Protecting Your Name and Your Product: What Every Business In Hawaii Should Know About Patents, Trademarks, Copyrights and Trade Secrets," by Martin Hsia: www.cades.com

Research your options: Know what you need to protect yourself. If you've invented something, you should explore patenting your invention. If you're planning to go national or global with your product, you might consider trademarking it, which can include packaging, shape, character names and associated colors or smells. Copyright laws cover such works as musical and sound recordings, literary works, software and graphics. Trade secrets protect valuable information used in business.

Look into trade dress: Trade dress distinguishes a merchant's or manufacturer's goods or services from those of another. It involves a "total image" that can include color of packaging or configuration of goods. Some examples of trade dress include the red border around the cover of Time magazine and the color scheme of Subway shops.

Protect yourself globally: There isn't an international blanket registration to protect your product. Typically you will have to register your name, logo and slogan in each country. "If you have faith that (your business) is going to be successful, trademark it in as many countries as you conceivably can," said Jim Wayman, president of Hawaii Coffee Co., which found out its Royal Kona brand was already trademarked in China.

Talk to other entrepreneurs: Find out what other business owners did to protect their ideas. They can offer first-hand advice about which options are best for your business.

Be careful about disclosure: Don't show your business plan or disclose your ideas to people you don't trust, including industry insiders or potential competitors. You should keep any kind of proprietary information such as product designs and unique resources out of your plan. Placing a nondisclosure statement in the front of your business plan may also be a good idea.

Get legal help: Figuring out the complex process of intellectual property rights may be best left for a registered attorney. "People think they can do it themselves," said registered patent attorney Martin Hsia with Cades Schutte Fleming & Wright. "I have never seen someone do it right when they're not a trademark attorney, and even trademark attorneys can screw it up. An ounce of prevention is worth a ton of cure."

Consider the cost: The investment to get your brand name registered or logo trademarked may be expensive, but it might be worth it in the long run. "I needed to spend money in the beginning," said Sung, who trademarked his name, logo and slogan. "If you think you can make it, you gotta spend money to protect it."

Be prepared financially for lawsuits: Hsia recommends that business owners factor into their business plans the cost of a potential lawsuit, which can cost companies thousands of dollars. "Entrepreneurs always underestimate how hard it is to build a business from scratch," he said.

— Catherine E. Toth