Businesses measure value in a myriad of different ways. Client retention, return on investment (ROI), and sales can all be deemed valuable to business owners. Different facets of intellectual property provide incredible value to companies in many different ways. Understanding just how valuable intellectual property is can help business owners protect themselves and their operations in future endeavors.
At Feldman & Feldman, we work closely with companies and executives to build solid plans protecting all their physical and intellectual assets. Our commercial litigation attorneys address your questions about what is IP in business and why intellectual property is so valuable to businesses.
What is Considered Intellectual Property?
The concept of intellectual property is a broad umbrella term that covers intangible assets owned and legally protected against any outside use or implementation without the consent of the business. Intellectual property consists of many different types of company assets, including trademarks, patents, copyrights, trade secrets, and more.
Any intangible creation from the human mind can be considered intellectual property. It can be patented, copyrighted, and otherwise protected under a range of state, federal, and international laws. Protecting the value it brings to your company can be complicated, requiring you to purchase insurance or sometimes take legal action.
What Makes Intellectual Property Valuable?
Although it’s an intangible asset, intellectual property can be far more valuable than a physical asset. It often provides a competitive advantage over other entities, making it particularly guarded and protected by those who own it. An organization with intellectual property assets can assess its value in several different ways, the most common of which is by utilizing it internally or by sharing it externally through royalty rights.
Businesses should be diligent with regard to identifying and protecting intellectual property assets, as they hold incredibly high value in today’s economic climate with reduced traffic to brick-and-mortar operations. When valuing intellectual property, the owner must use measures to protect that value by documenting its provenance and establishing legally valid ownership. Otherwise, businesses and individuals may find themselves struggling to prove an intellectual asset is truly the product of their own creative mind.
Three Types of Intellectual Property Ownership
Copyright
Copyrights are widely used and refer to a form of protection granted to the authors of original works of authorship, whether published or unpublished. A copyright protects a tangible form of expression – such as a book, written work, artwork, or music – rather than the actual idea or subject matter itself. Copyright protection exists the moment the work is created but copyright registration establishes a public record and provides for stronger enforcement against copyright infringers under The Copyright Act of 1976.
It’s not required that a creator register their work with the United States Copyright Office, but it definitely protects their rights to use, promote, and profit from their creations. Most copyright and patent attorneys will advise their clients to register immediately by completing an application and paying a fee. It generally takes about four months to process a claim, and once you have registered the copyright, your work is protected until 70 years after your death.
Those who work for themselves own their own copyrights, but if an individual creates something for their employer, the copyright is the company’s property. However, disputes over ownership may arise if the creator is an independent contractor.
It’s vital to have a qualified contract attorney review agreements to determine if there is clear language regarding intellectual property.
Trademark
The federal government issues ownership status through the U.S. Patent and Trademark Office, which receives over 500,000 applications annually. It oversees and regulates the process of applying for, reviewing, and granting patents. Federal oversight of Intellectual property ownership in America began at nearly the same time as the country itself since the USPTO’s work is based on the Commerce Clause of the U.S. Constitution (passed in 1798), and the first patent was issued on April 10, 1790.
Companies can apply for trademarks for a wide variety of items. A registered trademark protects products such as:
- Brand names
- Logos
- Phrases
- Symbols
- Smells
- Colors
- Tastes
- Distinctive product designs
For example, consider the logos and branding of companies such as Google, Apple, Starbucks, and Nike. These businesses have some of the most recognizable and valuable trademarks today. They must aggressively defend their trademarks to ensure the products retain their value and to ensure the trademarks remain theirs.
Trademarks also refer to service marks used to identify services rather than goods. While continued use can establish a trademark without federal registration with the U.S. Patent and Trademark Office, many benefits come with federal registration, such as a notice to the public of the trademark and exclusive nationwide rights. As with copyrights, registration is not required but is highly recommended.
Patent
Having a patent in place gives its owner the exclusive right to prevent others from making, using, selling, importing, or exporting the patented invention. To obtain a patent, an invention must be novel, useful and non-obvious. Compared to other types of intellectual property, patents are among the most valued and the most difficult to obtain.
Inventors should work with a patent attorney to ensure their product hasn’t already been created or patented. Your attorney can also help you if you have already publicly revealed your item prior to your patent application. You have a one-year grace period to register your creations, and part of your patent application process is determining what type of patent you require:
- Utility patent: The most common type of patent sought, it protects the structure, function, and technology of a product, process, or method.
- Design patent: These patents protect the look or design of a product, such as sports team logos, and an inventor may seek both a design and a utility patent if their item is novel in both function and appearance.
- Plant patent: Those who are able to produce a new type or variety of plant asexually are eligible to patent their creation and profit from it. Examples include the Honeycrisp apple or seed corn from Monsanto.
Items that can be patented include objects or processes such as new technology or methods. The applicant must provide documentation coupled with verification of originality by the USPTO before the patent is granted.
Once granted, the patent is typically valid for 20 years from the date of application. Once received, a patent owner has the option to grant licenses to others to use the item for a fee.
Protecting Your Intellectual Property Equals Protecting Your Business Growth
Intellectual property in an increasingly digital age is one of the most valuable assets a company can have. Protecting it properly not only serves your bottom line, it ensures your company has the resources to continue growth and expansion. Yet, understanding the full range of your business opportunities means taking certain steps to assess, develop, and market your intellectual property presence.
The value of intellectual property is ongoing since it can be licensed, sold, or assigned regardless of whether a company has a physical location. Your company can also increase or support its existing market share by reducing copycat products in other areas and registering the asset in the relevant jurisdiction. You protect your business against lawsuits against it as the original creator and have the law behind you to support copyright and trademark defense lawsuits against violators.
Your company must conduct several steps to create a complete intellectual property plan, including the following:
- Complete an intellectual property audit: An IP audit allows you to inventory existing IP assets and identify those that need development or lack current legal protection. It also helps you determine any existing or potential threats to the security of your assets.
- Register IP assets: Once identified, your company can begin registering copyrights, trademarks, and patents to legally establish its ownership and rights.
- Develop a monitoring program: Part of keeping legal protections is aggressively pursuing those who attempt to steal your work or violate trademark, copyright, or patent laws. By creating a monitoring program, your company can identify IP theft in its early stages.
- Develop internal IP training: Create documents detailing IP protocols and guidelines, ensuring all employees are trained in the established processes.
- Avoid breaking IP laws: It’s vital that your company adhere to intellectual property laws, especially when working with other companies who own IP. Always obtain written permission or licensing to use graphics, music, or other content for your marketing campaigns and even in client pitch materials.
- Retain an IP attorney: Keeping a close relationship with a qualified intellectual property law firm allows you to quickly address concerns before they spiral out of control.
The stakes for intellectual property protection get even higher when your company operates or intends to enter foreign markets. Your IP rights are only valid within the United States, so you must investigate and apply for patents, trademarks, and copyrights in other countries or risk theft outside the U.S. Additionally, IP rights aren’t transferred automatically if the company is acquired, and they should definitely be considered when determining the value of a business before it’s sold.
Intellectual Property Protection Also Creates Jobs
By building and establishing a committed intellectual property approach, your company contributes more jobs to the national and global economies. This affects your local communities and the country’s societal improvement. You maximize your effect on the nation’s growth while increasing your company’s development.
Solid and well-planned IP programs improve your business by:
- Attracting more investors and partners
- Mitigating and preventing risks
- Creating additional revenue streams
- Minimizing tax liabilities
- Increasing your competitive intelligence
- Improve your access to financial support
- Setting your company apart from competitors
- Boosting shareholder confidence
- Protecting trade secrets
- Solidifying your product and branding in consumer’s minds
By setting yourself apart from others in your markets, your intellectual property plan keeps you ahead of competitors. Your plan also prepares you to launch a response any time your assets are threatened by theft or attempts to challenge your ownership. Finally, your company can create additional jobs and even entire departments to manage branding, training, and IP asset protection, benefitting your business and increasing its growth in all areas.
Houston Commercial Litigation Attorneys
At Feldman & Feldman, we understand just how valuable your business’s assets are to your company. Intellectual property is incredibly important to properly protect during these uncertain times as we continue to move further into a digitally focused landscape. Because of this, disputes over intellectual property are inevitable, and you need superior legal representation to ensure your entire range of assets have the protection they need.
We offer hourly, contingency, flat-fee, and retainer fee structures, allowing you to receive the advice you need in a manner that suits your company size and requirements. During your initial consultation, we address your questions and determine a tailored approach for moving forward with your problem. If your business is dealing with a dispute regarding its intellectual property assets, having the knowledge of an experienced commercial litigation attorney can help. Contact us today to see how we can best assist you.