Creating an ingenious idea that could potentially turn you and your business partners into millionaires is one thing. Protecting that idea and making sure no one else steals it is another.
Your intangible assets, which include your brand and intellectual property, are valuable assets that position you in your market and give you a competitive advantage. Every time you market your ideas to venture capitalists or angel investors, you are sharing bits and pieces of your ideas to others. While the vast majority of people aren’t out to steal your idea, it’s still a possibility that you have to keep in mind.
Follow these strategies on how to protect intellectual property from thieves. It could save you millions of dollars down the line:
Whether you’re designing a shoe (like Nike, who has filed a patent suit against Skechers for copying its designs), or your startup bank has designed a distinct logo (like Calibra, who has alleged trademark infringement against Facebook for their recent Libra cryptocurrency logo), your brand should have legal protections put in place for its intellectual property rights.
There are four types of intellectual property: copyrights, trademarks, patents and trade secrets. Copyrights are given for creative works; trademarks are given for logos, images and identifiable goods; patents are given for inventions, whether a product or process; and trade secrets are a more informal type of IP, typically a formula, process, practice or design that gives a company a competitive edge.
Have an invention that you don’t want others to copy? Apply for a patent, or better yet, fill out a provisional patent application (PPA). The earlier you file a patent, the better. The PPA is the quickest, easiest, and cheapest way to market the invention without fear of losing patent rights, and you can modify your PPA every time you need to refine your invention or idea. Plus, once you file your PPA, your idea will be labeled “patent pending” or “patent applied for”. Both of these labels are useful deterrents to infringement. Plus, a patent protects against independent discovery, so you’re protected even if the infringement isn’t intentional or malicious.
But wait! Patents can also lead to the very thing they are meant to protect against. Therefore, a patent may not always be the best option. A patent is published publicly, which means that important information about your invention is out there for companies to cleverly replicate with methods that my not violate the patent. In some instances, it may be better to keep your invention a complete secret. However, you still run the risk of losing legal protection.
Once you’ve created a business name and logo, apply for a trademark. Create a memorable trademark, so that you can stand out from other businesses when you market your company in the future. Also, make sure you’re using copyright symbols when documenting and developing your product. After you apply for a trademark, purchase a patent so that you can fully protect all product ideas and designs.
To police your trademark, you may consider using a tool as simple and cost-effective as Google Alerts, or you may consider using a trademark search firm that can regularly search domestic and international registrations.
A trade secret, unlike a patented property, cannot be protected if it is independently discovered or if a holder fails to maintain secrecy. However, trade secret suits can filed in the case of misappropriation. This is when a trade secret holder intentionally sells or reveals a trade secret without consent, or someone acquires the secret through improper means.
The Defend Trade Secrets Act of 2016, which requires the United States to protect trade secrets, has given the option for companies to file federal lawsuits in trade secret cases. This is beneficial due to the fact that many states have their own definitions for trade secrets.
As far as international business, it’s important to remember that intellectual property, even if protected by a patent or trademark, is not legally protected abroad. Your patent is only good in the United States. You may file an international patent application or contact the U.S. Department of Commerce to learn more about your options.
Copyrights, patents and trademarks are just a piece of the IP puzzle. Your company should implement best practices that further protect intellectual property. Consider the following approaches:
Your intellectual property rights should be considered a major asset of your company. Always be aware of how much information you impart and who has access to that information.
[Editor’s Note: To learn more about this and related topics, you may want to attend the following webinars: Intellectual Property in an Hour 2019, Leveraging & Protecting Trade Secrets in the 21st Century, and Choosing, Building & Protecting Your Brand 2019. This is an updated version of an article originally published on June 27, 2016.]
Perhaps the youngest person to ever write for Financial Poise, Matt Niksa was an editorial intern with the company during summer 2016. Prior to that, he was a contributing writer for AOL Sports' College Contributor Network. Subsequent to his time with Financial Poise, Matt was a correspondent with the Palo Alto Daily Post and a…
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