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What's Your Intellectual Property?
IP is intellectual property, and
a surprising number of small businesses have it but don’t really know
what to do with it. More important, many smaller businesses that have IP
don’t protect it, and that can mean it’s going to be taken away by a
competitor and used against you.
Intellectual property is the result of your intellectual effort,
inventions, research and development or creativity. IP can include
everything from patents and trademarks to the way you conduct your
business. You may have a special way of manufacturing a product or a
method for selling your services. Whatever it is, if it’s yours you
should find a way to keep it out of the hands of other firms unless they
pay you for it.
Broadly speaking, anything that fits into the following categories is IP
and needs some form of protection:
- Patents – these protect inventions such as new or improved
products and processes
- Registered trade marks – these protect a graphic representation that
distinguishes your goods and services from those of your competitors
- Registered designs – these protect the shape or appearance of
your goods but not their function
- Copyrights - these protect artistic and literary works, computer
programs and engineering drawings
‘IP rights’ (IPR's) is a term that refers to a set of laws
associated with providing exclusivity and ownership of innovations.
These are the laws that apply to patents, registered trade marks,
registered designs and copyrights, as well as other more specialized
forms of IP protection.
IPR's are legally enforceable rights, which provide ownership of a
particular idea, product or service. IPR's benefit the IP creator or the
IP owner by restricting competitive market forces for a period of time.
This can be seen as a reward for innovation – it provides the time and
opportunity to decide how to exploit the IP creation.
IPR's are the same as an asset that can be owned, sold, licensed or even
bequeathed. Having the ability to assign or license those rights gives
you maximum flexibility in exploiting the IP opportunities you have.
It’s the basis for franchises as well as licensing agreements that
permit a product developed in one country to be manufactured and sold in
another.
Protect It or lose It
Unfortunately, if you don’t develop strategies to protect your IP you
could be in danger of losing your exclusive rights to it. Even if you
develop something that’s your own idea you still need to formally
protect it before you can consider it yours and yours alone.
Let’s say you develop a new kind of paperclip that you’re sure will make
you rich. You begin manufacturing it and marketing it but don’t bother
to have it patented. A big company sees it and after finding out it
isn’t protected by patenting the invention. What happens then?
Since it’s been patented by somebody else you have no rights to
manufacture it. They can even sue you for patent infringement.
Manufacturers in other countries can make it there and you have no
redress. It doesn’t sound fair but that’s the way the system works.
What you might think of as a trade secret may be a patentable process.
If someone else obtains a patent for it you might have to pay them just
to keep doing something you’ve been doing for years. Of course, you
might have the choice of either paying license fees or going to court,
but patent litigation is horrifically expensive.
Each Country has its own IP Legislation
IP protection in each country is granted according to the laws and
conventions of that country. Patents, granted in the U.S. since 1790,
give inventors a 20-year monopoly on their unique and non-obvious
inventions. The validity of patenting business methods was established
in 1992, when State Street Bank was given patent protection for its
method of managing mutual funds.
Thankfully there are international agreements in place for patents and
trade marks, which make it easier to seek protection of your IP in other
countries, but you can’t take anything for granted; some countries are
extremely poor in their enforcement of IPR’s for overseas companies.
To avoid the minefields and exploit the opportunities every business
needs to identify and analyze the IP it has. This means conducting a
thorough analysis of its business methods, its products, manufacturing
and selling techniques and anything else that the business has developed
since inception including software.
There are many ways to profit from your IP. You can sell it to another
business or license other businesses to use it. But unless you protect
it you could lose it.
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