Intellectual property can be a key asset for small businesses, whether they immediately realize it or not. The image, name, product details and processes of a small business can be extremely valuable, especially if the business is eventually sold to another firm. Understanding what you can protect and how to do it is important for entrepreneurs, particularly those in knowledge-based businesses.
Intellectual property essentially covers the patents, trademarks, copyright and trade secrets of a person or business. If your business is based on an invented product, or deals with providing original content such as articles, music or images, protecting your intellectual property is important to keeping someone else from ripping off your idea and making a killing off your gold mine. Even taking steps to protect the name or logo of your company is important, as there is a considerable amount of money to be made from selling the image of a popular company.
Theft of intellectual property is a huge problem for businesses. According to national and international law enforcement organizations such as the FBI and Interpol, counterfeit or pirated goods make up about 7 to 8 percent – or about $512 billion – of all world trade. U.S. businesses are estimated to take losses of up to $250 billion each year as a result of intellectual property theft. The economic impact of this theft is estimated to cost 750,000 jobs each year.
According to business experts, manufacturers, consumer goods makers, technology companies and pharmaceutical companies are among the industries hardest hit by intellectual property theft.
Business experts agree that intellectual property theft has become a major problem for all businesses, and may be particularly bad for small businesses because they may not have the expertise or resources to protect their intellectual property that larger concerns have.
For example, according to the United States Patent and Trademark Office, less than one-fifth of small businesses in the U.S. that do business abroad are aware that then need to also file for intellectual property protection in the countries where they do business to safeguard their IP.
There are various types of intellectual property protection available to the various types of intellectual property. Patents cover, “new or useful processes, machines, manufactures, or compositions of matter, or any new and useful improvement thereof.” In short, if you create something, devise a method of making something or create a machine that makes something, you can seek patent protection from the United States Patent and Trademark Office.
To protect words, names, sounds, symbols or colors that give your products or services a distinct identity (such as your company logo), you need a trademark, which is also available from the United States Patent and Trademark Office.
For written works, music, movies, artistic or dramatic works, business owners should secure a copyright, which is available from the U.S. Copyright Office.
Owning a copyright, trademark or patent gives you legal rights should a competitor produce a product that you believe copies your product or logo or infringes on your rights.
Most patents last for 20 years after they are filed, but periodic fees must be paid to keep them in force over this time period. After the 20 years is up, the patent expires and cannot be renewed, except in certain rare cases. Trademarks can have an indefinite life, so long as it is used in business and its owner defends it against infringement. Copyrights generally last for 70 years after the death of their owner, while the copyright of works for hire last 90 to 125 years.
How Intellectual Property Laws Are Enforced
Intellectual property law, by and large, is a federal matter, and federal courts typically handle all patent and copyright-related suits, as well as trademark and unfair competition cases. Federal law provides patent, copyright and trademark holders with the option of pursuing civil suits against those who may have infringed upon their rights. These cases are filed in federal district court.
Some intellectual property offenses may also carry criminal penalties in state and federal law. The majority of these prosecutions occur as a result of a copyright, patent or trademark holder informing law enforcement of a possible criminal violation of intellectual property law. Agencies investigating these claims are usually the FBI, the U.S. Attorney’s Office, the U.S. Immigration and Customs Enforcement office or the U.S. Department of Justice. Large-scale pirating operations, such as the manufacture and sale of large amounts of pirated DVDS, is an example of a potential criminal intellectual property case.
Protecting IP Overseas
If your venture plans on doing business overseas, you may need to take steps to protect your intellectual property in the nations where you’re doing business. You can find out more about filing patents overseas at the World Intellectual Property website.
If you’d like to protect a patent in many countries, you should consider filing under the Patent Cooperation Treaty, a 126-nation accord which allows businesses and individuals to file patents in each of the 126 nations. This can be a lengthy process, however, as each of the countries must examine your application.
Special Programs for Small Businesses
The U.S. Patents and Trademarks office has a variety of programs intended to help small businesses and individuals obtain patents and trademarks.
Inventors who qualify as a small entity, that is an individual inventor or small business, can get up to half off on the cost of filing a patent or trademark. Also, the USPTO has several online tutorials aimed at helping small businesses file applications and provides a variety of resources to help all customers research patents and trademarks to ensure their proposed patent or trademark does not infringe and existing patent or trademark.
Although it can be costly, small businesses may want to consider hiring an attorney specializing in patents and intellectual property to help file patents and other paperwork, as they have more experience and can help craft a more airtight patent or trademark for your company.
The intellectual property of small businesses are worth protecting from counterfeiters and pirates. Filing the appropriate patent, trademark or copyright can protect your investment and guard against infringement by unscrupulous competitors or unintentional infringement.