You may be looking to understand how to protect intellectual property and how to guard yourself, as a business owner, against intellectual property theft. If so, this article will be helpful to you!
Guest post by Christopher Heer
What Is Intellectual Property?
Intellectual property (IP) refers to creations of the mind, including:
- Literary and artistic works
- Utilitarian inventions
Determining the value of your IP and leveraging it to grow your business is incredibly important in a knowledge-based economy.
The five main types of IP are:
- Industrial designs
- Trade secrets
Even if these legal terms seem unfamiliar, intellectual property is everywhere. Copyright protects artistic ingenuity and the integrity of the creator’s work and includes:
Just about any creative medium you can think of.
Trademarks are an image, word, phrase, or other distinctive sign that identifies and communicates to a prospective consumer the source of a product or service.
Patents are predominantly associated with science and technology and protect things like:
- Nutritional supplements
- New computer technology
- Mechanical inventions
Industrial designs are the aesthetic features of products that are produced in bulk, while trade secrets are, as the name implies, any information that is not disclosed to the public and is kept confidential within a business.
What Intellectual Property Can Do For You
You are a local fashion designer with a growing business. A few years ago, you signed a contract with a well-known commercial retailer to start carrying your most popular and sought-after clothing in their stores.
However, when you go to the retailer’s location to see how your products are selling, you are dismayed to find nearly identical clothing made of a cheaper fabric and marked at a lower price displayed right next to yours. You fear that customers will see the lower price and not immediately recognize the lower quality of the product, causing them to purchase the newer imitation brand rather than your own genuine products.
Applying for IP protection is instrumental in ensuring market competitors do not use your IP for their own gain. IP rights provide an exclusive market territory that other entities are not allowed to enter.
When imitators look to manufacture and sell products that infringe on this exclusive territory, it is important to act fast to mitigate any resulting damages. When consumers see and purchase imitation products under the impression that they are genuine, you directly lose income from lost sales.
Businesses are also damaged indirectly by IP infringement through the depreciation of the business’s public reputation, also known as the business’s goodwill. Depreciation of goodwill occurs when consumers purchase imitator products of lower quality and then lose confidence in a genuine brand because those imitation products fail to meet the client’s expectations of the genuine products.
Protecting And Enforcing Your IP Rights
Intellectual property is a business asset and understanding how to protect and enforce your IP rights is paramount in growing any knowledge-based business.
One way of doing this, is to think proactively and protect your IP before a problem arises. This is done by registering your IP with a government agency, like the US Patent and Trademark Office in the US or the Canadian Intellectual Property Office in Canada.
Pay certain prescribed fees to ensure your IP rights are officially recognized as protected and belonging to you. The benefits of registration are two-fold:
- Obtaining the exclusive right to use your IP
- Acting as a warning to any would-be infringers that your IP rights are protected and you have a legal tool to enforce those rights through courts of law
Sometimes, registration is not enough of a deterrent for ill-intending competitors and infringement occurs, leading to an IP dispute. In the event of a dispute, registration can act as easy evidence of title to the IP in issue. In turn, expediting legal proceedings that incur lower costs in proving ownership and consuming less of your time that would otherwise be spent operating and growing your business.
Generating Money From Your IP
IP rights can be used to generate revenue via licensing agreements or to obtain loans through their use as security. Since IP protection affords exclusive territory, contracts can be used to allow parties other than the IP owner to enter the otherwise exclusive territory in exchange for royalties, or other valuable consideration.
Alternatively, if you are looking to secure additional funding to grow your business, registered IP rights can be pledged as security for some forms of loans.
About The Author
Christopher Heer is the owner and founder of Heer Law. He is an intellectual property lawyer, registered patent agent, registered trademark agent, and is also certified as a specialist in intellectual property law (patent) by the Law Society of Ontario. He believes that intellectual property rights add tremendous value to businesses by enabling them to raise capital, build asset value, and grow faster under the protection that these exclusive rights give them. Connect with him on LinkedIn.
Co-authored with Dominic Cerilli.