The Industry Outreach Committee is a new committee introduced this year with the task of promoting the Georgia Intellectual Property Bar to Industry in Georgia. Under the lead of Jim Johnson, the Committee has been preparing materials suitable for distribution to various industry groups. Below is the Committee’s Top Ten List for Small Business People.
TOP TEN THINGS SMALL BUSINESS PEOPLE SHOULD KNOW ABOUT INTELLECTUAL PROPERTY
INDUSTRY OUTREACH COMMITTEE
IP Section State Bar of Georgia
Jim Johnson, Chairman
1. What is Intellectual Property (IP)?
Generally speaking, IP is property created by the mind, but receives legal protection similar to personal property. United States law (and the law of most other countries) recognizes trademarks, copyrights, trade secrets, and patents as protectable intellectual property.
2. IP is, in all likelihood, one of your company’s major assets.
IP can protect your brand, your innovation, and your business practices. The IP a company owns can be a significant portion of its assets, as well as its value. This is especially true for companies focusing on innovation when in the start-up phase. Thus, a company needs to understand how not only to protect its IP, but also to leverage its IP to achieve a return on its research and development investment.
3. IP is important for protection both from an offensive and defensive standpoint.
Offensively, a company can use its IP to keep competitors from using its innovations. IP can also be used to prevent other companies from “riding the coat tails” of a company that has worked to build a reputation for delivering exceptional products and services. Defensively, dealing with assertions such as cease and desist letters or lawsuits can not only be expensive, but can erode the value of a company’s IP as well. Care must be taken to ensure a company does not infringe the rights of others, especially when its IP is included in licensing, employment, financing, supply chain, joint venture, and M&A agreements.
4. Trademark rights can be a company’s most important asset, so choose wisely.
Trademarks (which can be logos, slogans, colors, sounds, etc.) and Trade Names (product name brands) help consumers to distinguish a company’s products from those of its competitors. Trademarks and Trade Names allow a business to benefit from the goodwill and reputation that its products or services have earned. Trademark rights in the US are based on use, not registration. Thus, trademarks should be searched thoroughly prior to adoption and appropriately marked by ™ (indicating the trademark has been applied for) or ® (“circle R,” indicating the trademark has been registered with the U.S. Patent and Trademark Office). Domain name registrations, corporate name registrations, and even state or federal trademark registrations will not insulate a company from infringement assertions by a party with prior use of a similar mark.
5. Protect your trademark well.
Companies that have valuable trademarks protect them vigorously. Although it is true that a company does not necessarily need to federally register a trademark to receive some protection, federal registration offers significant advantages. These advantages include a presumption of validity and exclusive ownership, nationwide protection, and constructive notice to others. An important factor to keep in mind is that trademark rights are territorial. Accordingly, registration in foreign countries where a company does business may be necessary. Trademark registration can be relatively inexpensive, especially when compared to the value a trademark provides to a company.
6. Copyright can protect a company’s creative endeavors, but keeping the right can be tricky.
Copyrights are complex and often counter-intuitive. The key to remember is that copyrights are original works of authorship, and are aesthetic in nature unlike patented works that are defined by their utility. The author or creator of material subject to copyright protection, such as music, graphics, advertising, and photographs, is the owner unless there is a written agreement to the contrary, such as a work-made-for-hire agreement with an employer. Be aware of the use of material, such as clip art, material created by outside contractors or other parties, or even employees, can constitute copyright infringement.
7. Registration is not required to protect a copyright, but it is easy, inexpensive, and worthwhile.
Copyright registration is not required for protection, as a work is subject to copyright as soon as it is “fixed” in any form. However, it is important to obtain registration for several reasons, including the ability to obtain statutory (up to treble) damages and the ability to sue for infringement in general.
8. IP can be protected as a trade secret, but make sure you have sufficient safeguards in place.
Many companies have important confidential and proprietary information that are not properly safeguarded. Examples of trade secrets are the formulas or recipes for products, marketing plans, client lists, methods of doing business, and business strategies that are often key to businesses’ survival. However, like any secret, they are only valuable when kept secret, and there is little protection for leaked trade secrets beyond contractual rights. These important assets can literally walk out the door with employees unless appropriate steps are taken to protect them as trade secrets, such as do-not-compete and do-not-disclose contracts with current and former employees and supply chain partners.
9. Patents can protect innovative technology and designs.
Most people think of patents as protecting only “inventions.” While this is a true, it is an incomplete picture of what patents can protect. Patents can, of course, protect a new machine or device, but patents can also protect methods, innovative software, and in some cases, business methods. A special kind of patent—a design patent—can also be used to protect new industrial designs for almost anything, including software user interfaces.
Essentially, a patent is a legal monopoly that extends from the time a patent issues to up to 20 years from the date of application. (Design patents extend for 14 years from the grant date for a design patent.) Patents prevent anyone else from making, using, selling, or offering method, machine, device, or design for sale anywhere, or importing it into the United States. In exchange for this government-sanctioned monopoly, the patent holder must explain the best way to create its new and non-obvious invention. This description is then published by the U.S. Patent and Trademark Office (USPTO). Inventions are only protectable by filing for patent protection with the USPTO. There is no “common law” or “poor man’s” patent. Without patent protection, others may simply use the invention legally, and possibly attempt to claim the invention as their own. In 2013, the patent rules changed from a first-to-invent system to a first-inventor-to-file system. With this change, it is more important than ever for a company to create a secure and efficient process for converting research and development findings into patent applications. The new rules also provide a lower cost patent application alternative for “micro entities,” companies smaller than those previously eligible for “small entity” status.
10. A little bit of IP housekeeping can go a long way.
An IP audit can alert a company to potential IP that is not properly being protected. It can also give a company a sense of the risks it may have with respect to the IP of others. Companies should conduct IP audits and develop IP strategies to identify and protect its important assets. The key to any audit is converting the results into measureable action items to account for, and enforce, an IP portfolio anywhere that a company conducts business.
Learn more about the legal, financial, and technological importance of intellectual property at our presentation, which will feature an expert IP attorney from the
United States Patent and Trademark Office (www.uspto.gov), the State Bar of Georgia (www.gabar.org), or its Intellectual Property Section (www.georgiaip.org).