Having an IP management plan in place can help every business, large or small, remain innovative, competitive, profitable and out of court (especially bankruptcy court).
Intellectual property, or “IP,” is increasingly becoming one of the most important assets a business can own. Almost every business, from sole proprietors to large, publicly-traded corporations, owns some form of IP. IP can generate significant revenue, and help a business remain competitive and innovative. Unfortunately, many businesses have no idea of what IP actually is, or the IP the business owns. Far worse, some businesses don’t keep track of IP created or used by the company’s employees and contractors, including IP owned by others.
To compound the problem, IP litigation is steadily increasing in the United States and internationally. IP infringement claims usually aren’t covered by insurance, and defending IP lawsuits can be expensive and time consuming. If a business fails to have an IP management plan in place, it may lose significant IP rights and revenue, suffer reputational harm and be at risk for civil/criminal liability (and even bankruptcy).
In light of the risks involved, it’s important for every business, large and small, to have an IP management plan in place. An IP management plan can be very simple, or complex for larger companies.
The following steps can help businesses manage their IP:
Identify the company’s IP.
There are four types of IP: Copyrights, Trademarks, Trade Secrets and Patents. Copyrights protect original creative works, such as software source code, publications, marketing materials and graphic designs. Trademarks protect company branding, such as the company’s product and service brand names. Trade secrets protect the company’s business secrets, such as a company’s marketing and business plan, customer lists and secret formulas. Patents protect inventions and discoveries, such as procedures, methods, chemical compositions and certain plant inventions. A business should do an internal review to determine what IP is currently owned and used by the company.
Track the company’s IP.
A business should track its IP by keeping records of when the IP was created and by whom; and when the company’s IP rights will expire so that the company can strategize and plan. This can be as simple as maintaining an Excel chart with company IP information, or using an off-the-shelf IP management software program for more complex portfolios.
Protect the company’s IP.
There are various ways to protect company IP including registrations through the United States Patent and Trademark Office (USPTO). Trade secrets should be held on a confidential basis and disclosed only when there is a “need to know.” Confidential documents should be marked as such, electronic documents should be password-protected, and proper destruction procedures such as shredding should be in place. IP licenses should be properly monitored.
Enforce the company’s IP rights.
If someone is misusing the company’s IP, management should be made aware and assistance from legal counsel should be sought as necessary. Steps can be taken, such as sending “cease and desist” letters or resolving the dispute in mediation, arbitration or litigation. Employees and contractors who misuse company IP and IP owned by others may be subject to company discipline, breach of contract and civil/criminal liability, etc. in some circumstances.
Erica Bristol is an attorney, mediator and a business adviser with the Small Business Development Center (SBDC) hosted by College of the Canyons (COC), serving Northern Los Angeles County – the Antelope, San Fernando, and Santa Clarita valleys. The column reflects the author’s views and not necessarily those of the Signal. For more information about how the SBDC can help your business, call 661-362-5900, or visit www.cocsbdc.org.