You've heard people talk about intangible assets and why it's important to protect your intellectual property (IP), as well as why you should protect it from the time you have the idea (not after you get into business). Have you ever asked yourself, "So what? Why is it important to me as a small business owner?"
Here are some examples of recent cases and how protecting their IP helped them make a case for what was originally theirs:
- Why It's Important to Own the IP Rights to Your Work: Marvel vs. Kirby
- Add Trademarks to the "Trill" List
- Eminem and Iggy Azelia out for Blood: Copyright Infringement
If I still haven't gotten your attention, here are three reasons why you should consider securing that IP:
1. Reason #1: Your Legal Monopoly
A patent is a reward to the inventiveness and creativity of an inventor, which allows for a “legal monopoly” for you to commercially use your creation for 20 years (in the United States). Under patent law, a patent does not give a monopoly in the sense of having the absolute right to practice the protected invention. It gives the patent holder the right to keep others from making, using, offering for sale, selling, and importing the claimed invention, and thereby provides a meaningful exclusionary right. Patent holders can profit from their inventions by going into business for themselves or licensing the use of their invention to other companies.
Of all of the forms of IP protection, patents are the most complex and tightly regulated. They are essentially copyrights for inventions and defined by US patent law as "any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof." Note the use of the words “new” and “useful.” For your patent to be accepted by the US Patent and Trademark Office it must meet both of these requirements. Patents protect the idea or design of the invention, rather than the tangible form of the invention itself. Consequently, patenting something is a much trickier procedure than other forms of IP protection.
How is a patent considered a “legal monopoly?” The term “monopoly” has a better defined meaning in antitrust laws, but as long as you are properly engaged in conduct permitted by patent laws, you are typically immunized from antitrust laws. To determine what conduct is included within this shield, you should seek the assistance of an attorney to look to statutes and court rulings pertaining to your patent. It makes no difference whether you are an individual, small business, or large corporation. An invention is a new and useful solution to a specific technological problem, which is a product or a process that you own and will want to protect.
Can you have property protection rights without a patent? Yes, but it requires an entire level of vigilance you may not have time for. You will constantly be protecting yourself from competitors and disreputable employees. Filing your patent requires significant effort up front but will be a time savings in the long run. Just remember, whether you do or don’t patent, you should document everything! It is up to the patent-holder to actually enforce the patent; the government does not go after patent or copyright infringers. To enlist the government's help in stopping infringement, the patent-holder must take anyone they suspect of infringing on their patent to court.
2. Reason #2: A World of Goodwill
You might be thinking, “I’m a sole proprietor or a small business owner and I don’t have any IP to protect.” You couldn’t be more wrong. A name or brand conveys all the “goodwill” of your product or service. Goodwill is a term used in accountancy and law. It is an intangible asset of a business, and can include trademarks and patents, employees and their skill sets, the brand name and logo recognition, customer lists, and relationships. A trademark protects your brand and holds that goodwill which leads consumers to, or back to, your original product or service.
Establishing a strong brand is pivotal to business success. Protecting that brand is equally important. Yet many small businesses overlook an important first step in securing their brand: trademarks. As a general rule, you can trademark your business name if you use it when advertising directly to your customers. If you don't use your business name in direct communication with your customers, you probably can't, because you're not connecting your name to your brand and its attributes. If your business name will be a large part of your marketing, you should consider trademarking it.
Enhancing your rights through federal regulation:
- A trademark is generally a word, phrase, symbol, design, or a combination thereof, that identifies and distinguishes the source of the goods of one party from those of others.
- A service mark is the same as a trademark, except that it identifies and distinguishes the source of a service rather than goods.
The United States Patent and Trademark Office (USPTO) offers a free search system known as TESS (Trademark Electronic Search System), available 24-7. The TESS Help Page includes information, with some sample search strategies, on how to search the USPTO’s database of registered and prior pending applications to help determine whether any marks could prevent registration of your mark due to a likelihood of confusion. The USPTO will not search your mark for you prior to your filing an application. After filing and as part of the examination of your application, the USPTO will conduct a search of your mark and will let you know the results of that search. If the USPTO finds another registered mark or earlier-filed pending mark confusingly similar to yours for related goods/services, it will refuse to register your mark.
To understand the power of a unique mark, imagine two pictures, each a bunny. One is a Playboy bunny and one is Bugs Bunny. Two powerful images that mean two completely different things.
3. Reason #3: Cut the Counterfeiting
A novel and attractive product can be reproduced and commercialized as an imitation or counterfeit of the original product. IPIP protection helps deter counterfeiters and may even stop that counterfeited product at the border by means of effective customs legal actions based on those original IP rights.
Counterfeiting is a federal and state crime, involving the manufacturing or distribution of goods under someone else’s name and without their permission. Simply put, it is IP theft. Counterfeiting is a much bigger problem than most people realize. According to the International Anti-Counterfeiting Coalition (IACC), in fiscal year 2013 the Department of Homeland Security seized counterfeit goods valued at over 1.7 billion dollars.
It affects even small businesses
Any bad experience a customer experiences hurts your brand and negatively affects your goodwill. If you do business online, counterfeiters put your clients at risk for identity theft and credit card fraud when they provide a counterfeit merchant with their banking information. It also hurts your community. Counterfeiters don’t pay taxes, meaning less money for local schools, hospitals, parks, and other social programs.
What protections can be put in place?
If a person is determined to steal and reproduce your IPIP it is very hard to stop them. You can however put up obstacles to make it harder and make it much easier to defend your IP rights if it were to happen. Use every tool you can to protect your IP rights whether it be a patent, trademark, copyright, or trade secret.
- Rule number one is document everything. Keep track of letters, e-mail, and written notes. Date them, sign them, and save them. Keeping these documents secure is crucial if it involves trade secrets. (One easy way to prove date-of-ownership is to upload your documents to Traklight's IP Vault).
- Patents and trademarks can be obtained through the USPTO.
- Copyrights can be filed through the US Copyright Office.
- US Customs and Border Protection is another source that often gets overlooked. Your IP can be registered with the USCBP for an additional layer of protection. According to the CBP: Effective May 8, 2014, the owners of federally registered trademarks and copyrights who have recorded their rights with CBP will be able to renew their recordations online through the newly-revised IPIP rights e-Recordation application. In addition, the revised application can be used by trademark and copyright owners to update ownership information, request extensions of time for submitting renewals, as well as to check on the status of pending applications
The bottom line is – protecting your intellectual property rights is protecting your business. Of course, the type of business you own will determine what your needs are in terms of IP protection, whether it be a patent, trademark, copyright, trade secret, etc. IP It is the thing that defines your product or service. The name of your company and its logo are part of the branding that sets your business apart. Protecting that is as important as protecting your cash register, so you must be vigilant to protect your IP rights.
If you're interested in learning more about how you can protect your intellectual property, download your free white paper, "To Patent or Not to Patent."