The Importance of Intellectual Property (and how to protect it)by Lauren Cordray | January 27, 2021
Intellectual property (IP) assets are essential to running your business and protecting those assets is vital. Why? Your IP, such as trademarks, are valuable, and it is easy to inadvertently lose some or all of your company’s rights to them. A business must identify what IP assets they own and know how best to protect them.
What is Intellectual Property?
Understanding the different types of intellectual property will help you protect these intangible assets of your business. There are four main types of IP assets a company may own:
- Copyright: A copyright is the right to copy. It protects original works of authorship such as books, art, and other creative works. Software generally falls under copyright protection. A copyright gives the rights holder the exclusive right to reproduce, adapt, distribute, perform, and display the works.
- Trademark: A trademark is a word, phrase, logo, or other sensory symbol used to distinguish a particular manufacturer or seller’s products or services from others.
- Patent: Patents protect inventions. They give the patent holder the right to exclude others from making, using, marketing, selling, offering for sale, or importing an invention for a specified period. While a patent grants you the exclusive right to use the invention within a country during that period, you have to disclose how the invention works to obtain that protection publicly.
- Trade Secret: A trade secret is a formula, process, device, know-how, or other business information that is confidential to maintain an advantage over competitors. A well-known trade secret is for Coca Cola’s famously secret formula.
One of the most common issues your company’s IP rights face is within its contracts’ intellectual property section. This section defines aspects such as who owns what intellectual property assets, any licenses are given, any use restrictions, or how the other party may use your trademarks.
Companies often default to language granting them the rights to all intellectual property created by a contractor providing services. If not appropriately worded, this can include “background intellectual property.” The background intellectual property is the assets produced by a contractor before providing services under a particular contract. Suppose background IP rights are given to another company. It can prevent the contractor from using the assets in future work with other clients.
Another IP concern in contracts is your trademarks. Often a company puts in a contract the ability to use your company’s name or product name in their public client list and marketing materials. Though this can be a useful advertising tool for both businesses, it is also a potential liability to the trademark owner. The use of trademarks must be consistent with protecting your company’s trademark rights. Failure to do so can chip away at your mark’s value and protection. It is important to include language in contracts to protect your company’s trademark’s use to avoid issues such as trademark erosion and loss of value.
Even outside of contractual transactions, consistent use of a trademark is vital in protecting your company’s rights and brand. Suppose your company or others incorrectly use your mark. In that case, it can lead to trademark erosion or “genericide.”
Genericide is when a trademark has become the generic term for a general class of product or service because of its popularity or significance. Famous examples of generic names that were once trademarks are trampoline, escalator, and aspirin. Vendor compliance, employee awareness, avoiding using your trademark as a verb, and creative marketing can help prevent your trademark erosion.
Open Source Software
With large companies like Microsoft increasingly embracing open source initiatives, open-source software is more prevalent than ever. Open source means software for which the source code is made freely available and may be redistributed and modified. It can be a handy and efficient tool to utilize existing open-source software to meet your business’ needs.
However, it would help to take note of the exact licensing terms of the software your company is using. Some open-source licenses have no restrictions. Some require simply stating what open-source software package was used. In contrast, others force any software to become open source, also called Copyleft. Many older open-source licenses are Copyleft and should be avoided to keep what your business creates proprietary. It can help create a list of all open-source software that your company utilizes and its licensing requirements.
Protecting your intangible assets is extremely important for any business strategy. Trademarks, copyrights, and patents help to formalize and protect your IP, which can have both an immediate and strategic effect on your business’ position and competitive advantage in the marketplace. Don’t risk losing your company’s intangible assets. Make sure your IP is protected through well-written and knowledgeable contracts, avoiding trademark erosion, and noting licensing terms of open source software.
You are not alone – Speak with an attorney to discuss your business’ strengths and risks for intangible assets, intellectual property, formalized contacts, and much more. Contact us at 425-250-0205 or firstname.lastname@example.org.
Legal Disclaimer: This article contains general information. Do not view this article as legal advice. Talk with counsel familiar with your unique business needs before taking or refraining from any action.