Intellectual Property: Key Asset of Modern Businesses

By Wendy J. Pifher

Introduction  

Identifying and protecting intellectual property is a key consideration for any type and size of organization. To establish the most favorable strategic direction, business teams must have a clear understanding of the tools and techniques that enable the company to protect its innovative products, creative works, designs and brands. Armed with a firm grasp of the intellectual property developed or acquired by the company can allow it to explore ways to integrate its intellectual property management with broader tactical goals. Further, guarding these rights can provide for new revenue streams through licensing, franchising and other collaborative ventures. On the other hand, failing to understand and appreciate the intellectual property owned by other organizations can result in unexpected and sometime devastating financial consequences.

The first step for any business is to identify what intellectual property is owned. Generally, intellectual property is represented in the products and materials created that are unique assets and provide the company with an economic benefit or advantage over its competitors. 

There are several types of intellectual property, including patents, trademarks, trade dress, copyrights and trade secrets, three of which are specifically addressed, below.  

Patents

If the business has developed a new and/or better product or process that is useful and not obvious, the business should look to securing patent protection. A patent holder can prevent others from making, using and exploiting the patent owner's invention for a certain number of years depending upon the nature of the invention. Drafting and filing for patent protection in the U.S. and internationally can be complicated and costly, so it is important for a company to engage qualified representation and budget its resources, accordingly. It is also critical for the corporate entity to establish clear ownership of the invention, as opposed to its employees or independent contractors, by requiring anyone working for the company to sign an agreement assigning any created inventions to the company. The patent process will also allow the company to discover any pre-existing (or prior art) owned by third parties that may serve as an obstacle to the continued use and/or commercialization of the company's perceived invention.

Trademarks

A trademark may be a word, slogan, name, symbol, device, trade dress (package designs, product configurations and shapes), color, sound, smell or other distinctive items which serve to identify the source of the goods or services offered by the company and to distinguish them from those products and services sold by others. Trademarks symbolize the goodwill which a company has established for its product or service. Being the first to use the trademark is important for purposes of priority and may preclude others from using the same or similar mark for the same or similar products/services. Businesses can file for state, federal and international trademark protection in order to further protect its trademarks and enhance its enforcement efforts. It is important to note that the first step before filing for trademark protection with the proper governing authority, is to conduct a trademark search to assess whether there are potentially conflicting uses of the mark that could result in infringement of third party rights in that trademark. Investing resources in a promotion using a trademark that ultimately will not be available for exclusive use on an on-going basis is a common pitfall for companies. Consequently, the business should prioritize its trademarks and/or trade dress currently in use and secure registration to those marks nationally and, if appropriate, internationally.

Copyright

Copyright law protects original works of authorship fixed in a tangible medium of expression such as literary works, software, musical works, dramatic works, pictorial, graphic and sculptural works, as well as motion pictures, audiovisual works, sound recording and architectural works. Importantly, and unlike patents, copyright protection does not extend to ideas, processes, systems or concepts. Consequently, no author has a monopoly on ideas or facts; it is only the "expression" of those ideas that are subject to copyright. Although a business may file for formal copyright protection with the U.S. Copyright Office (and there are certain distinct advantages for doing so), a copyright right exists as soon as the work is fixed in a tangible form. It is advisable for a company to use the copyright symbol "©" immediately as a method of informing others that it intends to exercise control over the production, reproduction, distribution, display and/or performance of the work. 

Conclusion

Protecting and enforcing intellectual property rights is essential to nurturing innovation within any business. Without defending the ownership of ideas and other creative works, businesses would limit investment in research and development. Likewise, inventors and artists would not receive proper compensation for their creations and, finally, if there is no incentive to inventors, artists and other imaginative people, the public would likely not have the opportunity to use and enjoy those inventive discoveries and inspired works.

(originally published in the December 2011 eNewsletter)

Wendy Pifher is a partner with the law firm of Holland & Hart LLP, specializing in intellectual property, multi-media licensing and advertising law.  You may contact Wendy at (719) 475-6465.