What Every Small Business Must Know About IP

  1. Intellectual property protection allows a business to protect their work, ideas, and innovations.
  2. There are 4 different types of intellectual property businesses should be aware of.
  3. Businesses should consult a lawyer to determine how to protect their intellectual property. 

What is intellectual property?

Property rights basically mean that as the owner of real property, whether it be land or personal property, you have the right to possess it and prevent others from taking it. For instance, there are laws in place to protect your property from trespasser, vandalism and theft.

Your business has physical aspects that need to be protected, but just as important is your intellectual property. This includes everything from ideas and product designs to logos and slogans. 

As a lawyer specializing in business law and intellectual property, Mason Cole, co-founder of the Chicago-based business law firm Cole Sadkin, knows the dire consequences of not protecting this facet of your business – stolen intellectual property can potentially end your business.

We recently spoke with Cole about intellectual property, why it needs to be protected and how to safeguard it.

Types of intellectual property

There are four types of intellectual property, including:

Copyright: A copyright means you have the exclusive right to publish, print or record your original works. In order to receive copyright protection, the work must be original, and it must be fixed in a tangible medium, such as recorded, written down or printed. Copyright protection saves the original property from being used without the permission of the owner. For example, using a picture without the owner’s permission is considered copyright infringement. Keep in mind that unless you have an actual copyright registration, your rights to the intellectual property are limited.

Intellectual Property FAQs

Q. What types of intellectual property protections exist?   

A: Trademarks are filed to protect names, logos and slogans. Copyrights are filed to protect content, such as images and written word. Patents are used to protect ideas and concepts, such as physical products and designs. 

The USPTO is the enforcement body regulating most intellectual property in terms of granting applications. The federal and state court system allows for plaintiffs to protect their proprietary information from infringers.  

Q. Is all intellectual property worth protecting?   

A: Intellectual property, much like a business’s goodwill, can be a central reason why people hire you as opposed to a competitor. Aggressive protection, along with enforcement of infringement, allows a business to protect their hard work and effort. 

Q. Do you need to protect your intellectual property if you have a non-disclosure agreement with those you work with?   

A: Absolutely! A nondisclosure agreement merely requires confidentiality. IP protection provides lasting confidence. 

Q. If you do have intellectual property worth protecting, what steps should you be taking to protect it?  

A: Immediately speak to a lawyer to determine if your proprietary information is even possible to protect. You do not want to spend significant early-stage capital to protect your idea, or build a company, if you cannot [legally] protect what is yours.  

Once you determine the applicability of IP protection, you need to determine its value. Can you make more money providing your unique communication device directly to the public, or should you look to license to a larger company with the sales infrastructure already in place? 

Q. How much should a business expect to pay to protect their intellectual property?   

A: Any lawyer will provide a free [consultation] to help make this determination. Most protection is handled on a flat-fee basis, so small businesses should be able to reasonably estimate their fees. Businesses should be wary of hourly engagements, where their early-stage capital may flit away to legal fees. 

A business owner should attempt to budget for intellectual property, but he or she must also recognize that this is a mere start of the process. Budgeting for legal fees and forgetting long-term marketing and production would be foolhardy. 

Q. If you do get your intellectual property protected, does that protection last forever? Or does it expire at some point and need to be reapplied for?   

A: Each type of intellectual property has different restrictions. More importantly, technology is always changing and improving. You must constantly monitor your intellectual property to make sure it covers your current technology. 

Q. If someone infringes on your protected property, how should you handle it?   

A: Call a lawyer. IP laws are relatively straightforward, so enforcement is typically effective. However, you must be aggressive to confirm your rights.

You never know what the future holds in regards to your secrets or inventions. For example, the secret recipe for barbecue sauce that has been handed down in your family for generations may someday be the intellectual property that your restaurant is known for. It’s important to keep in mind that even if you don’t think your invention, design or creative works have any value, they may already have value, and the value may significantly increase in the future.

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