What’s Your IP?
IP is intellectual property, and a surprising number of small businesses have it but don’t really know what to do with it. More important, many smaller businesses that have IP don’t protect it, and that can mean it’s going to be taken away by a competitor and used against you.
Intellectual property is the result of your intellectual effort, inventions, research and development or creativity. IP can include everything from patents and trademarks to the way you conduct your business. You may have a special way of manufacturing a product or a method for selling your services. Whatever it is, if it’s yours you should find a way to keep it out of the hands of other firms unless they pay you for it.
Broadly speaking, anything that fits into the following categories is IP and needs some form of protection:
Patents – these protect inventions such as new or improved products and processes
Registered trademarks – these protect a graphic representation that distinguishes your goods and services from those of your competitors
Registered designs – these protect the shape or appearance of your goods but not their function
Copyrights – these protect artistic and literary works, computer programs and engineering drawings
‘IP rights’ (IPR’s) is a term that refers to a set of laws associated with providing exclusivity and ownership of innovations. These are the laws that apply to patents, registered trademarks, registered designs and copyrights, as well as other more specialized forms of IP protection.
IPR’s are legally enforceable rights, which provide ownership of a particular idea, product or service. IPR’s benefit the IP creator or the IP owner by restricting competitive market forces for a period of time. This can be seen as a reward for innovation – it provides the time and opportunity to decide how to exploit the IP creation.
IPR’s are the same as an asset that can be owned, sold, licensed or even bequeathed. Having the ability to assign or license those rights gives you maximum flexibility in exploiting the IP opportunities you have. It’s the basis for franchises as well as licensing agreements that permit a product developed in one country to be manufactured and sold in another.
Protect it or lose it
Unfortunately, if you don’t develop strategies to protect your IP you could be in danger of losing your exclusive rights to it. Even if you develop something that’s your own idea you still need to formally protect it before you can consider it yours and yours alone.
Let’s say you develop a new kind of paperclip that you’re sure will make you rich. You begin manufacturing it and marketing it but don’t bother to have it patented. A big company sees it and after finding out it isn’t protected by patenting the invention. What happens then?
Since it’s been patented by somebody else you have no rights to manufacture it. They can even sue you for patent infringement. Manufacturers in other countries can make it there and you have no redress. It doesn’t sound fair but that’s the way the system works.
What you might think of as a trade secret may be a patentable process. If someone else obtains a patent for it you might have to pay them just to keep doing something you’ve been doing for years. Of course, you might have the choice of either paying license fees or going to court, but patent litigation is horrifically expensive.
Each country has its own IP legislation
IP protection in each country is granted according to the laws and conventions of that country, so make sure you get advice from someone who knows your local rules and regulations.
Thankfully there are international agreements in place for patents and trademarks, which make it easier to seek protection of your IP in other countries, but you can’t take anything for granted; some countries are extremely poor in their enforcement of IPR’s for overseas companies.
To avoid the minefields and exploit the opportunities every business needs to identify and analyse the IP it has. This means conducting a thorough analysis of its business methods, its products, manufacturing and selling techniques and anything else that the business has developed since inception including software.
There are many ways to profit from your IP. You can sell it to another business or license other businesses to use it. But unless you protect it you could lose it.
