There is a lot of advice given to business owners about the importance of protecting their intellectual property. Maybe you have heard that your intellectual property can be an asset to your company. But how does that work? How do you acquire intellectual property and derive value from it? To answer those questions, you must first learn a little bit more about intellectual property in general.
1. There are Different Types of Intellectual Property
Patents, trademarks, copyrights, and trade secrets are all different types of intellectual property. And some ideas may qualify as more than one type of intellectual property. Patents generally protect a novel inventive idea, such as a new machine or process for doing something, but patents may also protect the ornamental design of objects. Trademarks are source identifiers and are used to inform the consumer of the origin of the goods or products they are purchasing. McDonald’s®, Nike®, and Google®, are well known examples of trademarks. Copyrights protect original creative expressions such as song lyrics, paintings, and video recordings. A trade secret is information that derives its value from the fact that the information is not commonly known. The secret recipe for Coca-Cola® is a trade secret.
2. Intellectual Property Does Not Exist Until You Create It
Unlike other kinds of property, intellectual property does not exist in a physical form. While you may receive a certificate showing ownership of intellectual property, the property itself is an idea and does not even exist until you think it. This is what makes intellectual property so exciting! There is no limit to the number of good ideas people can have, therefore the amount of intellectual property existing in the world can constantly expand.
3. You Probably Own Some Intellectual Property Already
Some types of intellectual property can be easily created when you do not even realize you are creating property. Trademarks, copyrights, and trade secrets can be created as a byproduct of running a successful business and with little extra effort. Most companies have trademark rights to their company names merely by associating the name of the business with the goods or services that the business provides. Similarly, if a company owns a website, there is probably at least some information on the website that is protected by a copyright. A company’s client list may be a trade secret if the list is not readily available and it is protected from public knowledge. And while patent rights cannot exist without the government issuing a valid patent, any company that has a proprietary method or novel product may be eligible to apply for patent protection.
4. Intellectual Property May Be Your Company’s Most Valuable Asset
Not all intellectual property provides the same value to your company. Some intellectual property is more expensive to create and maintain than others. Look at the assets of your company and decide what provides the company with the most value. If your company sells a ubiquitous good or service, you may find value in strong branding and protection of a trademark that signifies superior quality. Maximizing the value of a trademark may consist of following a good marketing plan and investing in registration of the trademark. By protecting your brand as a trademark, you may prevent others from competing in your market space with a name that is confusingly similar to yours. You also build value in your company because your trademark may be sold one day as an asset of the company. On the other hand, if your company sells a novel product, rather than focusing on trademark protection you may find value in protecting the product with a patent. The owner of a patent enjoys a limited monopoly on the sale of the product protected by the patent. A valid patent on a product ensures that every person purchasing the product must either buy the product from you or pay a royalty to you. After determining what intellectual property adds value to your company, consider protecting most aggressively the intellectual property that provides the most value to your company.
5. When You Fail to Protect Intellectual Property, You Lose It
While there is no limit to the amount of intellectual property that can be created, mankind has enacted laws governing the amount of protection that will be afforded to different types of intellectual property. And there are also different steps that need to be followed to secure protection for intellectual property. While a trademark is easily created, certain rights can be obtained only by registering the mark with the government and if a trademark is not used and maintained properly, an owner may lose rights in the mark. Similarly, copyrights can be easily created, but they can only be enforced if they are registered. Additionally, registration of a copyright may significantly increase the amount of damages you may be awarded in the event the copyright is infringed. And valid patents are granted only to novel ideas that are diligently pursued, not publicly disclosed, and not previously offered for sale.
Make the time to review the intellectual property that is owned by your company and perhaps identify intellectual property that you would like to acquire. Then create a strategic plan to ensure that the intellectual property that is most important to the well-being of your company is protected to facilitate the growth and future health of your business.
Kelly G. Swartz is an attorney in Melbourne, FL. Her practice focuses on intellectual property law.