Intellectual Property

by Damon Neagle

Are My Bases Covered?

Small- and medium-sized business often struggle knowing where to start to protect their intellectual property (“IP”). The following is intended to provide some high-level guidance for each of the major areas of IP.

Securing Ownership

Perhaps the most important step in protecting your company’s IP is to ensure that it owns all IP that arises out of the business. This means having a written contract with an IP assignment clause for each owner, employee and independent contractor who generates business-related IP. The company doesn’t automatically own all such rights simply because it paid for the project that generated the IP.

Trade Secrets

Protecting trade secrets (i.e., proprietary business information) means taking “reasonable efforts” to maintain secrecy. Generally, this means (a) having a contractual non-disclosure obligation for everyone who comes in contact with proprietary business information, (b) limiting access to the proprietary business information to authorized persons, (c) requiring passwords or biometric authentication for access to electronically-stored proprietary business information, and (d) requiring a key, passcode, or passkey to gain access to hard copies of documents, prototypes, proprietary equipment, and the like.

Patents

Whenever possible, seek advice from a patent attorney before you showing the invention to anyone outside of your company. Disclosing an invention to a third party prior to filing a patent application will result in a loss of the ability to obtain patent protection in many foreign countries. Failure to file a patent application within one year of the first public disclosure of an invention will, in most cases, result in a loss of the ability to seek a US patent.

Keep in mind that patents are business assets and should be sought only when the potential value of obtaining patent protection outweigh its costs. This is often difficult to quantify – but decision-making can be guided by the following questions. What is the likely revenue stream associated with the invention over the next five years? 20 years? How long will the invention have commercial value? What are the barriers to entry for potential competitors? How difficult will it be for competitors to design around the patent portfolio?

Before finalizing the design of a new product, evaluate the risk that an existing patent may cover that product and consider having a freedom to operate study conducted. If performed in a timely fashion, a such a study may enable you to make changes to the product that will avoid patent infringement without disrupting sales. If your competitors are aggressive patent filers, consider having a watch service set up to monitor their patent filings.

Trademarks and Branding

How do customers identify your products and services and distinguish them from those of your competitors? How do potential customers find you? Trademarks are the key —- your business name, logo, domain name, slogans, and product names. Protecting your company’s trademarks and avoiding situations in which you have to change a trademark due to a conflict with another existing trademark user is key to maintaining the strength of your brand – even for a small company.

Consider having trademark clearance investigations conducted and obtain US trademark registrations for your company name and for trademarks used with key products and services. A clearance investigation will reduce the risk that you will be forced to change the name of your company or a key product or service after you have established a strong connection with customers. Obtaining a US trademark registration will reduce the likelihood that another company in your industry will obtain rights to concurrently use trademarks similar to those being used by your company.

Copyright

Unlike patents, most rights associated with copyright do not require the owner to obtain a copyright registration. The most significant benefit associated with obtaining a registration is enhanced infringement damages.

The most important step to take with respect to copyright is to make sure that the company owns the rights to IP that arises out of the creation of copyrightable subject matter. As discussed above, this is accomplished through written contracts with IP assignment clauses.

Disclaimer: This article is provided for informational purposes only and not for the purpose of providing legal advice. Please contact an attorney to obtain advice with respect to any particular issue or problem.

Related Articles