by Intellectual Property Attorney Bill Honaker, the IP Guy
Intellectual property has never been more important. Its value has never been greater and the consequences of infringing another’s intellectual property more dire. And yet, most businesses treat intellectual property as an afterthought, only thinking about it when there is an immediate problem. Someone invents a new product and someone might think about getting patent protection. Someone develops a new trademark or logo and somebody might think about getting it protected. Or the worst-case scenario, you launch a new product or service and you get invited to a lawsuit because no one thought to check the intellectual property of others.
Let’s look at a few examples where ignoring intellectual property has been costly.
Example 1: You are invited to a lawsuit.
Litigation is expensive, distracting and miserable. It’s not only expensive; recent reports indicate the average patent suit is around $3 million, but also distracting. A check to determine the IP of others can help you avoid litigation.
A client made roll up rubber doors. If impacted, these doors pop out of the tracks without damaging the door and easily pop back into the track. A competitor had a patent on a different style track. The client thought that the patent protected an extruded aluminum rail. The company decided that if they used plastic inserts on their standard steel rail; they would not infringe the patent.
They launched their product and were sued for infringement. The patent actually covered the profile of the fingers closing the opening, not the aluminum. We advised them to use a square insert instead. It worked just as well and was a fairly simple design around. Once the insert was changed, the case was settled. If an investigation had been done before launch, the lawsuit would have been avoided.
Example 2: You realize your trademarks are not yours.
Your trademarks can be the most valuable asset in your business. Trademarks identify your business. They symbolize your success, what customers love, your reputation. Without your trademarks, you are unknown, basically starting over.
What would you pay to protect such an asset? It can be less than a few thousand dollars if you do what should be done in the beginning. Pick a strong mark, search to make sure it is available and get it registered.
Recently I worked with the owner of a manufacturing business who was dealing with this problem. To protect the innocent, we’ll call it Magnus. Magnus had been using the trademark “Magnus” for more than seven years.
The CEO received a letter inviting her to a lawsuit. An international company in the same business had a similar name, “Magnum Inc.” They had been using the name longer and had protected it with a Federal registration. The CEO adamantly protested her innocence and assured me she had registered her business name with the state. Unfortunately, that was not the answer. She was faced with the difficult and expensive choice of fighting the lawsuit or changing her business name; both costly, undesirable choices. She had to pick a new name and reestablish her identity.
This would have been avoided by doing a clearance search when the business first chose its name. It would have identified Magnum and a new name would have been chosen that didn’t invite a lawsuit.
Example 3: Buyers or investors are not interested in your business.
Buyers and investors, want to know that your intellectual property is properly protected. It is worth 1/3 or more of the total value of your business. I recently reviewed a company’s intellectual property portfolio for an investor wanting to invest $5 million. The portfolio was a mess, trademarks and copyrights not registered, and patents owned by different entities. The investor walked away. By merely managing the portfolio, the business would have had a 5$ million investment.
Conclusion These are just a few examples of why you have to pay attention to your intellectual property. Like anything else of value to your business, you need a system to protect this asset. One that is automatic, fast and ensures that your intellectual property is protected. The best system is ReCiPe. Recognize, Collect and Protect.
Have questions about trademarks, patents, copyrights, trade secrets, or other types of Intellectual Property? Let’s talk and assess your IP today.