Get a handle on your I.P. now, or hate yourself later

December 31, 2008

Intellectual property matters are the biggest assets and the largest liability exposures that many businesses never think about.

IP can take many forms, but businesses all deal with several common issues on a daily basis. Some organized thought and planning, through an IP audit, is a solid first step toward getting a handle on these potentially big opportunities or threats.

Generally speaking, IP rights are anything that someone can give away and keep at the same time. For example, when Microsoft or Adobe grants a license to use software and gives you a copy of it, they still have the software.

When an architect delivers a set of plans to her client, she still has those plans on her computer drives to make additional copies as needed for that project, or perhaps to use parts of the plans for another project.

And when college sports teams grant the trademark rights to a T-shirt company to make and sell team logo products, the league and the schools retain rights to use those same mascots and logos in other ways.

IP includes trademark rights as in the NCAA licensing example. These are exclusive rights to use a name or logo in association with a certain kind of product or service. It also includes copyright, as in the software or architecture example. Copyright holders have rights to control copying and certain uses of original content such as music, movies, visual arts, drawings, books, software, writings, etc.

The general types of intellectual property also include patents, which are government-granted exclusive rights in novel inventions for a set period of time. A fourth general category of IP is unpatented know-how and proprietary business knowledge, which can be protected as trade secrets. Virginia is one of many states that has a trade secrets statute designed to help businesses that manage and control access to their trade secrets.

With these basics in mind, businesses would do well to perform an IP audit to make the most of their own assets and also to manage the risk of infringing the IP of others. Several things can be done fairly easily with a little thought and planning to protect the value of internal IP assets in these four areas. On the other hand, a little bit of attention to use of others’ IP can prevent significant liability exposure to other rights owners.

Trademarks

A company or a product’s name, logo, advertising slogans, domain names, and almost anything else that becomes distinctive over time can identify the source of goods and services. Over time, these identifiers can accumulate a great deal of consumer recognition and good will, which are very valuable assets. The world’s great brands got that way through years of use and promotion. Such use creates the consumer recognition that trademark law is designed to protect.

The to-do item for trademarks is registration. Use in the market creates trademark rights, but registering a mark with the U.S. Patent and Trademark Office creates certain additional rights over time and provides a much better basis for enforcement. So if another company ever gets too close and begins to create consumer confusion, the company with the registered mark will have a better chance of stopping the problem.

Copyrights

Any original written materials, visual works, software, music, web content, or the like that a company has created are works that are protected from unlicensed use or copying by others. This can be a valuable asset for those companies that create content in any form.

Architects, web developers, printing and graphics businesses, creative and advertising firms constantly deal in copyright issues. Registration of protected works with the U.S. Copyright Office is a highly recommended and cost-efficient means of protection.
As with trademarks, registration does not create the copyright.

The rights exist at the time the work is created, but registration clearly documents the date of creation and makes the rights enforceable in court.

Patents

A company may also have invented something, or developed a new method of doing something. If the development is truly novel, and has subject to time limitations for how old the invention is, the company may have the makings of a patent application.

Patents give an inventor exclusive rights to use or give permission for others to use an invention, for a fixed number of years.

The right is created by the Patent and Trademark Office when it grants the patent. The process is long and usually expensive, but a patent on a marketable invention can be pure gold.

Trade Secrets

Many businesses have developed information over time that competitors do not have. Methods of doing business, customer lists, and technical know-how can all be trade secrets.

They must not be common knowledge, and the company needs to consistently work to control access to the information.
Trade secretes are somewhat fragile, because if they are publicly disclosed, they can lose their protected status.

The flip-side is that trade secret protection has the potential to last much longer than patent protection, if maintained. Under Virginia law, a trade secret can be almost anything that is valuable due to its secrecy, as long as its owner makes reasonable efforts to maintain secrecy.

Any company with types of know-how and information that could qualify as trade secrets should consult with counsel as necessary, and take measures to keep that information secret. Secrecy procedures might include limiting access to computer or paper records and non-disclosure agreements with any employees or contractors who might have access to the valuable information.

Risk management

Just as these four basic types of intellectual property can become great assets if identified and maintained, a lack of attention to the rights of others can also create substantial liability. For example, it can be easy to slip up on the number of computers or users that are licensed to use a particular piece of computer software. Overuse exposes businesses to legal fees and liability when software industry watchdogs inquire. Thoughtless use of other content can also be problematic, such as photos or music in advertising or on a company’s web site. In the trademark area, companies considering a new brand names can prevent wasted promotional investment and avoid an infringement action through thorough investigation into the use of the same or similar names in the marketplace.

An intellectual property audit that addresses these topics can be initiated in-house, with assistance of counsel as needed. Such an audit is a recommended periodic task for businesses looking to make the most of their intangible assets while limiting risks of liability from interference with the IP of others.

Chris Gatewood practices law with Hirschler Fleischer in Richmond.

Written by Chris Gatewood  |  Filed Under Home Page Items, Intellectual Property, Weekly Update 

Comments

Got something to say?