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Raise Your IP IQ


Written By: Glenn Ladwig

WHAT EVERY SMALL BUSINESS OWNER SHOULD KNOW ABOUT INTELLECTUAL PROPERTY

Intellectual property (IP) refers to creations of the mind. There are four distinct areas of IP: 1) inventions, which are protected by patents; 2) literary and artistic works, protected by copyrights; 3) symbols, names, phrases, sounds, and colors used in association with a product or service, protected by trademarks; and 4) secret formulae, processes, contracts, devices and other secret business information that has commercial value, protected as trade secrets.

If you think that IP is only important to technology companies, think again. IP is an integral part of every company’s strategy, or it should be. That may seem like a self-serving statement coming from an IP attorney, but that does not make it any less true. If a company has a name, marketing materials, and a list or database of customers, it is potentially making use of at least three forms of intellectual property: trademark, copyright and trade secrets.

If the company is a startup, making the decision to spend limited resources on patent filings can be a difficult one, particularly if the company is following the lean startup methodology. Patents are significant, long-term investments that are often deferred in favor of more immediate business needs focused on getting the product to market. This would be a costly mistake for some companies. While patents may not be important for many business models, the exclusivity provided by patents is pivotal to some, particularly those that face significant front-end research and development costs. Thus, when patents are important to a company’s business objectives, they tend to be very important.

To take stock of the IP your company has, an IP audit should be conducted. Just as you should regularly inventory your tangible assets, your company can benefit from an assessment of intangible assets. Awareness of the different forms of IP provides the foundation for this. IP should be identified and properly protected, i.e., trademarks and copyrights should be registered, patent applications filed, and trade secrets documented and safeguarded. This is where an IP attorney comes in. This should be done before contacting venture capitalists and other outside investors or publicly disclosing your innovations.

Maintaining good records of all innovations, including incremental developments, is important for proving that your company owns its IP. Proof of ownership is necessary when asserting your IP rights against others and it may also prove helpful in defending against IP infringement lawsuits. Proactivity is key.

It is worthwhile to invest in welldrafted confidentiality agreements (CDAs), also called non-disclosure agreements (NDAs). Have an understanding of the key provisions in these agreements and recognize those written to protect the other party as opposed to your company’s interests. Employment agreements and consulting agreements should dictate the conditions under which innovations made by an employee or consultant are owned by the company.

Understand that IP rights are regional. If you conduct business outside the United States, registering a trademark or copyright and patenting your invention only in the U.S. may not adequately protect your business interests.

As your company matures, consider protecting IP that is not only core to your business but of importance to others. In the event of a market shift, this may allow you to “pivot” while maintaining a position of exclusivity.

This article is public information and has been prepared solely for education or entertainment purposes to contribute to the understanding of U.S. intellectual property law. The article reflects only the personal views of the author, is not individualized legal advice and does not reflect the views of Saliwanchik, Lloyd & Eisenschenk, P.A.

GLENN LADWIG, a partner at Saliwanchik, Lloyd & Eisenschenk, concentrates his practice in patent prosecution and licensing. Mr. Ladwig is a Registered Patent Attorney, Board Certified as an expert in Intellectual Property Law by The Florida Bar and is a Certified Licensing Professional. Saliwanchik, Lloyd & Eisenschenk is an intellectual property law firm that focuses on procurement and licensing of domestic and foreign patents and trademarks. It has a vibrant practice in the life sciences and engineering. The firm assists members of the local and worldwide innovation community in developing strategic IP plans and securing domestic and international patent and trademark protection.

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