What Exactly Is Intellectual Property and How do I Protect it?

Business owners are often urged to “protect their IP”. But what does this mean, and how do you go about it?

Intellectual property is intangible assets, such as brand names, logos, artwork, inventions, goodwill, processes, and a whole lot more. It is protected through patent, trademark, trade secret, and copyright law.

The first step to protecting is to identify your intellectual property. Here is a brief guide to get you started.

Patents: Patents protect devices, processes, articles of manufacture, or composition of matter. As an incentive to invent, an inventor is granted a monopoly on using the underlying technology for a period of years, and then the technology is able to be used generally in the marketplace. To get patent protection, the invention must be useful, novel, and non-obvious; you cannot get exclusive rights in just an idea, theory, or other unapplied concepts, a natural phenomenon, a pure algorithm, or a purely mental act. You cannot get patent protection until the invention is “reduced to practice” -- i.e., has a prototype or other working use rather than just schematics or plans. You don’t necessarily need a patent to make and sell a product, and getting one is time-consuming and expensive. If your business model will be based on a new way of doing something, it may be beneficial to obtain patent protection and prevent your competitors from doing it your way.

Trade Secrets: A trade secret can be anything that brings economic advantage to your company from not being generally known. These are protected by treating them as secrets. What types of protection vary based on what is reasonable for that trade secret? It can be not having electronic copies of a particular document, or numbering the copies and making people check them out. It can mean passwords or controlling electronic access. It can mean a physical lock and key.

Trademarks: A trademark is a brand name or a symbol that identifies your company as the source of a particular good or service. Trademarks can be words, symbols, logos, slogans, sounds, fragrances, colors, or even product or building designs. A service mark refers to a service rather than goods. “Trademark” is often used to refer to both trademarks and service marks.

A strong trademark allows a company to build goodwill and a brand reputation for its goods or services. Think of the commercial reputations of Ford Trucks or Mercedes sedans. Trademarks promise consumers a particular level of quality and help consumers decide which company to buy from. Trademark owners can prevent competitors from using similar trademarks that are likely to confuse consumers, whether or not the trademark is registered.

For most businesses, their business name, logos, and slogans are the trademarks they wish to protect. But just like the Proctor & Gamble Company, your business name may be merely a trade name and not a trademark. Note there are no Proctor brand toothpastes and no Gamble brand diapers.

Copyrights: Copyright protects original works of authorship the moment they are “fixed” in some tangible medium: paper, canvas, hard drive, memory card, disk, etc. Copyright generally attaches to literary compositions, art, photos, sculpture, dramatic works, song lyrics and music, performances of musical compositions, audio-visual works, choreography, and architectural works. Copyrights generally do not apply to factual information, ideas (such as a plot for a novel or a painting you are going to create), slogans, forms, or the title of a song, television show, book, or movie (although those might be protected through trademark law).

Copyright owners have the exclusive rights to copy, distribute, display, perform, and make derivative works of the copyrighted work. For individually created works created since 1978, the copyright lasts the life of the author plus 70 years.

Copyright is not just for novelists, artists, or musicians. “Main Street” businesses may run into copyright problems in the following instances:

· Hiring contractors to develop a website, logo, or advertising material generally requires having the work product assigned to your company.

· Playing radios or other “background” music may require licenses from ASCAP or BMI.

· Using pictures on your website requires a license unless the source site specifically claims the images are free.

Businesses should identify their intellectual property assets early, and protect them as soon as possible. I’d be happy to help you come up with a plan and timetable for protecting these valuable business assets.