Alan Davidson, executive vice-president for Micropatent LLC in East Haven, Conn., an Internet trademark and patent search firm, has a problem. The information for which his business charges $35 a pop is now being given away for free.

In August, 1998, the U.S. Patent and Trademark Office began including part of its trademark database on its Web site, and it plans to offer patent information on the Internet within the next year. The agency's plans may be interfering with a handful of private companies that earn their daily bread by serving up patent and trademark data to companies that are developing new products.

Although that's undoubtedly a big problem for Davidson and his rivals, their losses are your gain.

TRAWLING FOR TRADEMARKS. The USPTO's trademark database is accessible on its Web site, www.uspto.gov. You can search the database by typing in a trademark name or registration number, or a combination of other search terms. It will pull up the name of the company that registered the mark, the date it was registered, the attorney of record, a description of the good or service trademarked, as well as what the trademark looks like.

But the USPTO's Internet offering isn't perfect, a point the agency makes clear in a prominent disclaimer at the top of its Web page. For starters, the information is updated every two to four months. The private search firms get weekly updates. What's more, it does not have state, common-law, or international records, which many of the private search firms offer. "The information that we put up is much rawer," says Brigid Quinn, a spokeswoman for the USPTO. "We don't have people who spend the time the private people do who go through it and make sure all the typos are corrected."

The USPTO says it does not intend to compete with the handful of companies that repackage and sell its data. "Some companies will provide more information and add intelligence to it, and they may do some sophisticated research for people who are thinking of establishing a new trademark," says Wesley Gewehr, an administrator of information dissemination for the USPTO. "We don't provide those services. That is not our line of business, and we are not heading that way at all."

That still isn't good enough for Davidson, a patent and trademark lawyer who also helped design the USPTO's system in the 1980s. "The simple matter is that people will use that system in lieu of our system, I am afraid, to their detriment, and that is my biggest concern," he says.

THE NAME GAME. Why should you care about trademarks and patents in the first place, let alone what looks like an arcane dispute between the patent office and a private company? First, if you own your own business, chances are you will have to deal with a trademark or patent issue at least once during the lifetime of the company. If nothing else, you will need to determine if your prospective company's name already exists.

Intellectual property lawyers will tell you that any time a company names itself, or is developing a brand name for a product or service, it must protect itself through a trademark or patent. "They have to search before that to make sure they're not stepping on any one else's toes," says Brent C. J. Britton, a partner in Britton Silberman & Cervantez, a San Francisco law firm that specializes in intellectual property issues for startup technology firms.

Second, in researching trademarks or patents, you can use the free government service or pay for what the private vendors offer, so you'll want to know the difference. Companies that sell public data have always claimed it's their value-added service that allows them to sell their product in the first place. Sure, you can access the government's patent and trademark information, but do entrepreneurs want to spend hours sifting through all that data? And will they know how to find what they're looking for? Probably not.

There are roughly a dozen private patent and trademark search firms. They all use the same information, which they get from the USPTO every week, but they mine it in different ways and use different software interfaces. You can wind up paying a range of prices for these searches. Davidson will let you search his Micropatent database (www.marksearch.com) all day for $35, whereas larger companies like Thomson & Thomson (www.thomson-thomson.com) will charge you up to $375 for what is generally considered the most comprehensive search available. (Thomson also has a cheaper do-it-yourself search.) For that sum, Thomson employees will do the dirty work for you, searching federal, state, and common-law records. When they're through, they'll send you a comprehensive report on their findings in five business days.

The Micropatent alternative is something budget-conscious entrepreneurs might have a particular interest in. Take Rex Hammock, chairman for Hammock Publishing Inc. in Nashville, Tenn. He is in the custom-publishing business, designing newsletters and magazines. Hammock says his company needs to search trademark names every month. His company relies primarily on the business library at Vanderbilt University, but he says his staff is also starting to use the USPTO's site to get a feel for what kind of product names have already been trademarked. He says he would welcome Micropatent's $35 search as another layer to his research. "We use the Internet to do research on a daily basis. This would be an additional way to do what we are already doing," he says.

Still, as search tools steadily improve on the Internet -- allowing people access to all kinds of information they might have paid for in the past -- the need for a middleman may some day be eliminated. "I can see a sort of even horizon in the future where it will be difficult to find the value-add," Britton says. In the long run, that may be too bad for both Micropatent and Thomson & Thomson.

By Jeremy Quittner in New York
jeremy_quittner@businessweek.com

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