May 19, 2024

You’re the Boss: The Quagmire of Design I.P.

Is TerraCycle free to copy a design that hasn't been protected?Courtesy of TerraCycle.Is TerraCycle free to copy a design that hasn’t been protected?
Staying Alive

Intellectual property is a complicated subject. At TerraCycle, I regularly face I.P. decisions, and I have developed a point of view on them — but I would welcome some feedback. I’m particularly interested in your perspectives on unprotected design.

Generally speaking, my understanding is that if you come up with a unique name for something, such as a company, you have the legal right to register the trademark, the service mark and the logo. If your name and logo are important to your business, you probably want to protect them in other countries as well — or, someone can take them and use them there. The same goes for unique inventions — you can file a patent and receive 20 years of protection around your idea.

But your work isn’t done. Even if you have a trademark or a patent, to get the benefit of your rights, you need to police them, meaning that you have to watch to see if others are infringing on your I.P. If they are and they continue to do so after a notice and warning, you have to pursue them legally. This requires time and attention and — most important — money. At TerraCycle, we spend more than $75,000 per year just on filing for various forms of I.P. — and that doesn’t include policing.

Although TerraCycle has come up with many innovations involving collecting waste and making products and materials from waste — (including making a textile from juice pouches and a cushion type material from chip bags) — in most cases, I’ve decided against spending money to seek patents. That’s because I’d rather not take on the time and expense of policing and licensing the patents. From my perspective, the time and money can be better deployed collecting waste and coming up with additional innovations.

But there’s a flip side. What about the unprotected I.P. of others? If I see a design I like that isn’t protected, I don’t see any reason not to copy the concept. For example, someone else came up with the design for a clock made from an old vinyl record. This design concept probably could have been patented before commercial use (there are design patents). But maybe the designer was not well versed in the world of I.P. or more likely didn’t have the capital to invest in a patent. Or perhaps, like me, he or she decided the design wasn’t worth protecting, given the costs involved in policing and licensing. But as I understand it, once the design is used commercially without protection, it is effectively public domain.

Not everyone agrees with me on this. I’ve had a long-running argument with our chief designer, Tiffany Threadgould, who is a world class upcycling designer. Our disagreement revolves around how to deal with the lack of I.P. in design. While my view is that TerraCycle is free to copy a design that is not protected, Tiffany says that this is unfair to designers and that we should not copy designs — or we should compensate them proactively for building on their designs.

Protecting designs can be even more complicated than protecting literary works or songs — perhaps because it takes you into a very gray area. Where do you draw the line between being “inspired” by a design and simply its copying elements? If the law doesn’t define that line, isn’t payment to a designer for use of an unprotected idea a form of charity? And if so, why would there be a problem with just copying an unprotected design?

As the chief executive of the company, I acknowledge the I.P. challenge that designers face — but I sense a higher duty to my shareholders and employees. Of course, I’m happy to pay a designer a royalty to design a new product for TerraCycle, and it’s my job to protect that design if I don’t want others to copy it. But if we get inspired by a vinyl record clock that I see selling in a boutique for $49.99 and I want TerraCycle to make a version that can retail at Target for $12.99, I see no reason to seek out the designer and pay something for an unprotected design. And the upshot is that instead of diverting thousands of vinyl albums from landfills we’re diverting millions.

What do you think? I welcome your views.

Tom Szaky is the chief executive of TerraCycle, which is based in Trenton, N.J.

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