Unleashing the Power of Intellectual Property: A Gamechanger for Business Owners

The Untapped Potential of Intellectual Property in Business

By Bill Honaker, The IP Guy

In today’s business landscape intellectual property (IP) plays a crucial role in the success and value of a business. This article sheds light on the significance of IP, its various forms (trademarks, copyrights, trade secrets, and patents), and practical advice for business owners to protect their IP assets. Understanding the value and protection of IP is essential to avoid legal issues and maximize the potential value of these intangible assets.

Introduction:

Intellectual property is an often neglected area within a business, despite its potential to contribute significantly to a business’s value. It is often an Invisible Asset™ just waiting to be discovered. As a business owner, it’s crucial to understand the importance of protecting your IP.

According to Forbes, intangible assets, including IP, have grown from representing only 20% of corporate balance sheets to a whopping 80%. This shift highlights the expanding nature and rising importance of intangibles like intellectual capital, research and development, services, and more. In fact, a report by Ocean Tomo, LLC, reveals that intangible assets command a staggering 90% of the S&P 500 market value.

Trademarks

Trademarks are a vital form of IP for any business. Your business name, along with product names, logos, slogans, and other distinctive elements, can be highly valuable. Just consider the worth of trademarks such as Apple, Microsoft, Amazon, and Coca-Cola, all worth billions. In a recent presentation by IP Value Experts, a comment was made that Coca-Cola could lose all their physical assets and still get financing to continue operations on their name alone.

Registration is essential to protect trademarks. While common law rights are automatic, registering your trademarks offers several advantages. Federal registration provides a self-policing function, giving notice of your ownership. It extends your rights nationwide and can lead to incontestable status after five years, strengthening your position in litigation. Displaying the ® symbol indicates that your trademark is registered with the United States Patent and Trademark Office (USPTO).

When choosing a trademark, be mindful of potential challenges. You don’t want to get distracted by a lawsuit for violating another’s trademark. Before you start using a trademark, have a search done to determine if it is available. Two questions are critical to determine whether a trademark is available. First, is it similar in sound or appearance to another’s trademark, and second, is it used for similar goods or services? The answer to these questions can be complicated and are best left to an experienced trademark attorney. They can do a clearance search and advise you whether your proposed mark is clear.

Copyrights

Copyright protection applies automatically when ideas are expressed in a reproducible form. Copyrightable materials are abundant in businesses, including books, music, videos, websites, software, and more. Although registration is not mandatory, it is a prerequisite for filing a lawsuit for copyright infringement. Registering within certain timeframes allows you to elect statutory damages, simplifying the process of claiming damages. Your important content should be registered with the United States Copyright Office.

Copyright infringement is a risk for all businesses, especially regarding online images. I regularly defend businesses that have copied images from the Internet and pasted them on their website, advertisements, or banners. To avoid costly legal disputes, only use licensed images from trusted sources. I use Shutterstock which is a paid site. There are many others, and many free sites, but all of them have use licenses, and the terms must be followed.  Otherwise you will still be infringing. Exercise caution when using any image, understand the license restrictions, and keep a record of licenses.

Trade Secrets

Trade secrets are everywhere in business. A trade secret is any information that’s of value and that you keep confidential. State and federal laws protect trade secrets. You don’t have to register them, but you must take proactive measures to keep them secret. If they need to be disclosed to others, it should only be pursuant to a Confidentiality Agreement. Examples of trade secrets are business plans, profit margins, future plans, customer lists, key suppliers, formulas, etc.

Patents

While patents may not be applicable to many businesses, understanding the basics can be beneficial. There are three types of patents: Utility patents (for products or processes), Design patents (for product appearance), and Plant patents (for asexually reproduced plants). Timing is critical in patent protection. Avoid disclosing inventions before filing an application, and file promptly to secure your rights. The United States provides a one-year grace period, but this doesn’t apply in many other countries. It is best to not to disclose until you have sought the advice of a patent attorney and filed with the USPTO.

Takeaway

Mismanagement of IP can have dire consequences. Businesses have faced hefty penalties for copyright infringement due to improper use of images or other copyrighted materials. Lack of proper IP management has led to missed investment opportunities and forced name changes, resulting in substantial financial losses.

Recognizing and protecting your IP assets is essential for your business’s success and future value. Regularly review and assess your IP, along with registering it.  This ensures that you maximize its present value potential, its continued value growth, and its worth to potential investors, or potential purchasers of your business.

Bill Honaker, The IP Guy

About the Author:

Bill Honaker, “The IP Guy” is a former USPTO Examiner, a partner with Dickinson-Wright, and author of the forthcoming book, Invisible Assets – How to Maximize the Hidden Value in Your Business. To download a sample chapter, click here.

To get answers to your questions click here to schedule a time to talk, email Bill@IPGuy.com, or give him a call at 248-318-7015.

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