Patents and trademarks can count as intangible assets for your business. That they’re intangible does not make them unimportant or lacking in value to the business.

Last year, a survey of executives rated an intangible – the brand – as a company’s most important asset. The executives rated the brand above property assets, plant and equipment, capital resources and even ahead of the skills of management and workforce.

A trademark can be a key resource in helping you establish and defend a distinctive brand in the marketplace. While most small businesses do not need to hold patents to succeed, some businesses find that patents enable them to provide a product or service that is unique and which therefore brings them a competitive advantage.

Patents

A patent provides you with legal protection for something you have invented. It will give you the legal right to challenge people who make, use, or sell your invention without having received your permission.

In some cases, patents are a key business asset. Amazon.com, for example, gained an advantage when it patented technology that allowed customers to buy online products with a single mouse click. Xerox built a business on patents that covered key advances in copier technology. Polaroid used its patented technology to gain a special place in the photographic market.

Some businesses can make millions because they hold patents to technology for which other companies are willing to pay license fees.

For reasons such as these, venture capitalists look favorably on start-up companies that own a patent. They reason that the patent can provide a business with an important marketing edge.

However, patents do not necessarily guarantee a business advantage. Suppose someone were to invent a new way to dispense kitty litter. Their product has a unique design and ornamentation features (which could also be patented). However, when they apply for a patent and do a patent search, they may find dozens of other patented ways of dispensing kitty litter. These other devices perform the same function more or less adequately.

So an inventor might take out a patent, but will not necessarily derive much benefit from it, as they still have plenty of competitors.

Patents can last for up to twenty years, but they may offer practical protection for only a much shorter period. Competitors often find ways to work around a patent and deliver a similar result. This means that a patent can be a way of giving you a head start on competitors who need to do product development before they can match your market offering.

Take the case of Lea Cavender, who had a shrewd market insight. Cavender told Entrepreneur.com that she was in a ribbon store one day and it occurred to her that people often don’t buy ribbons because they don’t know how to tie bows.

Cavender then designed the E-Z BowMaker, a product that allowed people to easily tie attractive bows. She patented and marketed the device. Within a few years she was making annual profits of five million dollars on the product.

She knew that this sort of success would attract competition and that she was very vulnerable to competitors who would design a similar product – perhaps at a lower price or of higher quality. She realized that her patent only gave her temporary protection, and that she had to find a marketing strategy to protect her business.

Cavender had become well-known through many appearances on home shopping TV networks. Her solution was to launch new products in anticipation of competition against her bow maker. She decided to put her photograph on all the new product lines. The credibility and goodwill she had gained through the bow maker enabled her to effectively market the new products. Brand awareness kept her business afloat in the long-term, not the initial patent.

Trademarks

Putting your photograph on your products is one way to identify your brand but most businesses use distinctive words or a logo to trademark products and achieve a similar result.

The urban landscape is full of trademarks, such as the McDonald’s golden arches. Trademarks serve as a way to identify a company or product and let customers know they can expect a certain level of product and service quality.

Trademarks can be a word, phrase, symbol, design, or a combination of these elements. Unlike patents, trademarks do not prevent others from copying goods or services but you may be able to defend your trademark against others who use similar trademarks. One could imagine, for example, that McDonalds would take swift action to defend itself against a hamburger outlet that called itself McDonnies and used orange arches as a symbol.

In the US and Canada you can gain some trademark rights merely by being the first to use a trademark. You can gain trademark rights by using a trademark for a period of time and building up customer recognition. You may be entitled to register your trademark, but you are not required to do so.

However, registration does provide greater safeguards. For example, businesses are expected to carry out a trademark search before registering. If you register, other businesses will come across your trademark when they carry out a search. This should keep them from imitating your mark.

When you choose a trademark you should choose a strong, distinctive one. This will make it more memorable to customers and make it easier to set yourself apart from competitors. It will also make the trademark easier to register. Weak trademarks can be hard to register, as too many other people have a reasonable right to use them.

For example, if your name was Smith and you chose to use the trademark ‘Smith’ you would probably find it impossible to defend your right to use the word ‘Smith’ from all the other Smiths. Of course, if you lived in a very small town and you want to trademark Smith’s Hardware products, the name might be adequate to identify you in the local area, provided there were no other trademark issues to contend with.

Place names are also weak trademarks. If you lived in Denver, Colorado, you would find it hard to defend Denver Dry Cleaning as a trademark from someone across town who also wanted to call themselves Denver Dry Cleaning. The situation might be different if you lived in Brooklyn and you wanted to open Denver Dry Cleaning there. You could probably argue that the name would be distinctive in that context.

A straight descriptive trademark is also weak. If you called yourself Speedy Dry Cleaners, you would probably be lost among all the other businesses that call themselves Speedy.

You can simply invent a word or take a word from a foreign language. Kodak, for example, is an invented word. Xerox came from the Greek for ‘dry’ - denoting the photocopying process. The downside to this kind of trademark is that, without an extensive and successful marketing campaign, the new name will not mean much to consumers.

You can solve this problem by using a trademark that is novel, but which also suggests something about the product. For example: Greyhound bus, or Coppertone tanning lotion or Liquid Paper. These are all strong and distinctive trademarks and they have an immediate meaning.

Another solution is to pick a fanciful or arbitrary trademark – along the lines of Beefeater gin, Penguin books or Camel cigarettes. Trademarks like these are striking, will stick in the customers mind and are likely to set you apart from any competitors. Pick a good, strong trademark and you are on your way to giving yourself a solid brand identity.

If the telephone is the front line of business-to-business, customer-to-business, and business-to-customer interaction, then email might be described as the rearguard action.

There’s no point in winning the battle if you’re then clobbered from behind. Yet that’s just what many businesses are allowing to happen through their email dealings.

They’ve got face-to-face customer service down pat. They’ve trained their team members in customer-friendly telephone techniques. They’ve got a great product with wonderful after sales service – and atrocious email response times.

With the growth of mobile internet and wireless services, more people are sending emails and expecting replies in email, and their number is likely to grow exponentially within the next few years.

Yet many business owners still seem to treat the Internet and email as a kind of ‘exotic add-on’ to their business rather than as a vital part of everyday communication with customers.

Where a telephone response is usually immediate or at least forthcoming the same day, a response by email invariably takes well over 24 hours.

Having a website and email address means you’ve got to be ready to respond to customers and potential customers who contact your company through them. Belatedly responding to an emailed request for information or an emailed complaint, several days or weeks down the track, means a customer frustrated and possibly lost forever.

Net Happenings, a weekly newsletter for internet marketing professionals, declares that any business which hosts online email feedback “should be aware that customer emails deserve the same level of respect as incoming customer phone calls.”

They should receive a response within 24 hours, and not just an automated response.

Other tips for responding to emails include:

• Make sure you understand the customer’s problem or query, and be specific in your reply.

• Train your team members to respond to emails and create an environment where each team member takes responsibility for customers.

• If a customer is expressing frustration or anger, respond in an empathetic, not confrontational, manner. As with telephone calls, let people know you will do your best to help.

• If dealing with a problem, follow up by email or phone to make sure the customer’s concerns have been satisfactorily addressed.

It was Francis Bacon who told us: “Knowledge is power”.

Today, the BizMove website backs that up by observing: “The first thing you need to acquire in order to succeed in small business is…knowledge.”

Running any enterprise today means making decisions which are influenced by an increasingly wide range of external factors.

The only way you can do this is by developing and maintaining a broad-based reservoir of knowledge. This allows you to link one issue with another, forecast trends, identify new and emerging markets and potential dangers, and ultimately make decisions. It can also be a key to boosting business.

The need for broad-based knowledge is driven by the increasingly complex and interconnected world we live in. No longer is it enough to be a master of one’s own field of expertise. To manage a business today we need to be aware of the many external factors which can influence it.

According to research by Dun and Bradstreet, 90 percent of all small business failures could be traced to poor management resulting from lack of knowledge.

Many failed because those who started and managed them were so consumed with what they actually did, they had neither the time nor interest to look at the world around them. If they had, they might have seen the clouds of disaster looming on the horizon and been able to change course.

No business or field of endeavor is an island. Everything is, in some way, connected to everything else. The manager of, say, a plastics manufacturing company who has an interest in art, science, technology, medical research, law, finance, media, and sport, will have a good chance of spotting the trends likely to influence their business in the near future, and make plans for them.

A development in technology or medical science may, for example, indicate the need for a new type of plastic. A workplace health and safety case might mean products incorporating another type of plastic will need to be modified or scrapped. Developments in finance might position the company for growth, while decisions by a major sporting body may open the door to a new manufacturing contract.

A simple and easy way to boost your knowledge is to diversify your reading, radio listening, TV watching, and web surfing. If you normally read magazines related to your work, try adding a different type of magazine each week. If you usually read certain sections of the newspaper each day, try reading other sections. If you habitually listen to talkback radio on the way to work, try listening to a science program instead. You never know where you will see or hear something that will make a difference to your business.

Be sure to read each article with the mindset “How could this apply to our business.” Thinking of it that way will guarantee that you get value. Better yet, take notes as you read and commit to having the ideas implemented by the time the next edition arrives. Also, make copies for each team member. To really make sure something positive happens, work with your business development specialist to talk your team through the ideas and how to set a schedule for getting them implemented. We’re here to help you get started.

“Everything should be as simple as possible, but not simpler.”

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