Intellectual property, or “IP”, is arguably one of your company’s most valuable assets—it is essentially the lifeblood of every organization. This all-inclusive term encompasses the original concepts, designs, discoveries, inventions and creative work generated by an individual or corporate entity.
With the near total-integration of technology into virtually every industry and workplace setting, it is essential now more than ever to safeguard the vital information that makes your business successful. Taking into account that in today’s globalized economy, all market players are extremely interconnected. It is far too easy for trade secrets to be shared in the course of conducting business. And while the majority of employees do not intentionally misappropriate information obtained from their current or past employers, it only takes one bad apple or careless error to put your company’s profitability in jeopardy.
So how do you protect your intellectual property? The answer requires coordination of legal, IT, and human capital resources. Not to worry, here are a few proactive and effective measures you can implement immediately to give you the peace of mind that your company’s important information is adequately safeguarded.
What IP Do You Possess?
In order to fully protect your IP, you first have to conduct an IP audit. Here are four categories of intellectual property:
1 – Patents. A patent grants you the legal authority to exclude any other entity from producing your unique tangible assets. A patent is granted for physical goods, that are useful, novel, and nonobvious. You are required to disclose how you make them in exchange for the right to exclude competition for a period of time. Patents can also be registered overseas to protect yourself from international competition and last for 20 years before having to be renewed.
2 – Trademarks. A trademark identifies the source of a good or service. It can be a name, slogan, image, color, or symbol (to name a few). Trademarks fall into classes of goods and services for brand identification. Owning a trademark means that you can exclude other people from using the name identifier for their similar product.
3 – Copyright. A copyright protects your written or artistic expression preserved in a tangible medium (e.g., novels, poems, songs, movies). The owner of the copyright is able to exclude others from using the exact expression, or even excerpts from it, for their own commercial purposes.
4 – Trade secrets. A trade secret is the secret sauce of your business. They are generally not known to the public, have economic benefit to you because they are not known to the public, and you work to protect their secrecy. Examples include your customer list, your proprietary method of onboarding customers, your secret recipe for a product. Unlike a patent, trademark or copyright, these are not disclosed to the public. Therefore, they are the ones that need to be safeguarded the most fiercely.
Review your operations and determine which of these you have. Consult with a business attorney to determine if you have tangible assets that should be protected by a patent. Look at your brand and ensure that it is protected – so people always know that you are the source of your goods or services. Again, consult a business attorney to determine if you should file for trademark protection of your logo, catch phrase, and other brand identifiers. Remember that copyright automatically applies to your original writings. If you have books, pamphlets or other materials you supply to the public that are original, consider registering the copyrights for those to enhance your recovery and protect against infringement. And, finally, consider what makes your business yours – what is your “secret sauce”? These are items like your customer list, your pricing system, your marketing strategy, the network of vendors and suppliers you utilize, and the like. Begin labeling those items “Proprietary and Confidential” and restrict who has access to each of those assets.
Educate Your Staff
Be sure to educate all employees about what information should be protected to reduce the risk of inadvertent disclosures. Regular awareness training can be a useful tool for preventing IP leaks but is regularly overlooked. While technical and legal safeguards such as firewalls, copyrights and encryption are certainly important, humans are typically the weakest link in a company’s security chain. Ensure that both bases are covered and engage employees so they are aware of any existing IP and how they should go about handling it.
Incorporate Restrictive Covenants
There are instances where there is essential information pertaining to your business that you need to protect from public disclosure. For example, you’ve hired a new salesperson to contact a list of potential leads for your business. You’ve provided the salesperson the list of prospects, as well as an overview of your competitive advantage and your price list. This is significant and important information for your business which needs to be protected. A seasoned business attorney can draft a restrictive covenant that will help protect you and keep this employee for later stealing and disclosing your sensitive information. In addition, a confidentiality/non-disclosure clause should be incorporated into your employee handbook, offer letters, and also in client/vendor agreements. It should be well known that you protect your proprietary information and you expect others to do so as well.
Businesses have more intellectual property than they are aware of. The know-how, processes, systems, pricing, sourcing and other details of a successful business can and should be protected. Let LOVE LAW FIRM help you conduct an IP audit and put you on the path to protection.
Francine E. Love is the Founder & Managing Attorney at LOVE LAW FIRM, PLLC which dedicates its practice to serving entrepreneurs, start-ups and small businesses. The opinions expressed are those of the author. This article is for general information purposes and is not intended to be and should not be taken as legal advice. To learn more about LOVE LAW FIRM please see our website, www.lovelawfirmpllc.com.