What Every Entrepreneur Should Know About Intellectual Property

Intellectual property is an umbrella term for various types of rights an individual or business can have in their names, creative works, and inventions. A firm grasp of intellectual property is important for every entrepreneur – even if you’re not a musician or inventor. An understanding of intellectual property rights can help you protect your business or product name, software, website, logo, invention, and even your customer lists. No matter what type of business you are in, you will come across at least some of the issues discussed below.

Trademarks

A trademark is any word, name, symbol, or device used to indicate the source of goods or services. Trademarks can be used to protect your company name or product name, domain names, images, symbols, logos, slogans, colors, product designs and product packaging. Registering your trademark will help you prevent others from using your mark in a way that might confuse customers or damage your business reputation. It is important to think about trademark considerations as soon as you start your business!

Copyrights

A copyright is a set of exclusive rights given to an individual or business that has created a literary or artistic work (including computer software, photographs, architectural plans, and a whole range of other works). A copyright gives the owner the exclusive right to make copies of the work, distribute copies of the work to the public, prepare derivative works, and perform or display the work publicly. In short, the copyright owner has the right to exploit his/her own work, and those rights are unavailable to any others.

You should also be aware that copyright issues can be complex whenever you have someone else working for you. If you own a company and have hired someone as a full-time employee, then you most likely will own the copyright in anything they create for you. However, if you have only hired them as an independent contractor, then the contractor is considered the owner unless there is a written agreement to the contrary. Your company may have a license to use what was created, but you won’t be the owner and may not be able to sell or create new versions of the work.

Patents

A patent entitles an inventor to exclude others from making, using, or selling the claimed invention for a period of 20 years. To obtain a patent, your invention must have a very high level of originality and you must disclose the “recipe” for your invention to the public.

An inventor who obtains a patent for a “widget” can stop a competitor from creating or selling blue widgets. However, someone else may have patents relating to widgets (e.g., a patent on a widget with a handle). If so, it is possible that the inventor may be similarly stopped from selling widgets with handles. But remember that after all of the patent rights relating to widgets expire, anyone is free to create and sell widgets.

Trade Secrets

Trade secrets provide another way to protect material that could otherwise be copyrighted or patented. While copyrights and patents are made public and limited in duration, trade secrets are private and can last indefinitely – so long as you actually keep them secret and use reasonable measures to protect their secrecy. Trade secrets also can extend to things, such as customer lists, that are not easily protected by copyrights or patents.

Imagine a clever software developer who writes a program that predicts the Stock Market with 99% accuracy. If he patents his software, in 20 years, everyone can create, use, and sell similar software. However, if he keeps the software a trade secret, he can control the source code indefinitely and no one will ever know how he achieved such accuracy.

However, it is essential that you take sufficient steps to develop a Trade Secret Protection Program. A proper Protection Program will include steps like requiring confidentially agreements, ensuring limited access to confidential material, having password protections, and limiting the number of people with access to sensitive information. If you take appropriate steps and your process or information qualifies for trade secret protection, you can prevent others from using the trade secret without your permission.

Contractual Issues and Licensing

Whenever you are dealing with your own intellectual property, or the intellectual property of others, there are many important contractual and licensing issues that can come up.

For instance, if pay a graphic designer to create a logo or pamphlet for you, you may think that you own the work and all copyrights in it. But if you don’t have the correct contract in place with the graphic designer before she begins work (a work for hire agreement), then you may only have a license to use the logo or pamphlet and the designer owns the copyright!

Likewise, if you have a trade secret, and you disclose details of that trade secret to someone else without having the proper contract in place (a non-disclosure agreement), then you may lose your rights to that trade secret!

There are too many different contractual or licensing issues to address here, but take away from this that you should always be cautious when dealing with intellectual property. To be safe, you should always have an attorney review any contracts dealing with intellectual property rights.

Conclusion

Now that you have a basic understanding of the different types of intellectual property and related issues that can arise, you should have an idea of how trademarks, copyrights, patents, and trade secrets will affect your business. If you encounter any of the issues discussed above, you should consult an attorney to make sure you are fully protecting your intellectual property rights! You can contact Daliah Saper of Saper Law Offices at (312) 527-4100 or dsaper@saperlaw.com.