If you own a small business, you probably already know that your intellectual property or “IP” includes your new product and service ideas, advertising and marketing strategies, financial information, your customer and vendor information, and your manufacturing processes. It also includes any trademarks, logos, or slogans that you use to market or advertise your goods or services. The reason that your intellectual property gives you a competitive advantage, quite frankly, is because it belongs solely and exclusively to you and your company. However, there may be times when another party – an employee, a vendor, an investor, or a potential client – needs access to your intellectual property. How can you protect your IP assets from exploitation or from unauthorized disclosure in such situations?
Crafting and establishing a plan to protect your company’s intellectual property is an imperative and never-ending task if you want to compete successfully over the long term in the 21st-century marketplace. Without regard to the specific type of small business you own, your IP security plan should not only protect your intellectual property assets, but it should also help you to take more commercial advantage of your IP. Traditionally, proprietary interests in intellectual property have been protected by trademark, copyright, and patent laws. However, with the emergence of a service-and-information-based economy, intellectual property has in recent decades expanded to include computer passwords, consumer data, vendor and customer lists, business strategies and projections, and much more. The IP laws currently on the books may or may not protect your intellectual property from unauthorized use, so you’ll need to include contracts – employment and consulting agreements, non-disclosure agreements, and non-compete agreements – as part of your IP protection plan.
AN IP PROTECTION PLAN
The first step in any intellectual property protection plan is to determine what elements belonging to your business generate or add to its value. If those elements are unique to your company, they need legal protection. How you legally protect specific intellectual properties will depend, of course, on precisely what those properties are. For example, if detailed knowledge of your customers’ buying habits and preferences is critical to your sales success, those details must be kept safe from unauthorized access or disclosure. That can be accomplished through a combination of steps: restricting employee access, allowing remote access only through a secure, password-protected connection, banning the storage of data on portable devices, and establishing confidentiality obligations through employment contracts or employment manuals.
Here’s another example. If you order tooling from a vendor for a proprietary manufacturing process, you’ll want that vendor to keep your designs and sketches confidential, so your purchase order will need to include an agreement preventing any unauthorized use or disclosure of your intellectual property. If you produce software, it’s hard to stop piracy, but you can put security features into the code to prevent the software’s use without a “key.” If employees or consultants help with code development, employment and consulting agreements will be needed to establish your ownership of the code.
SEEK AN ATTORNEY’S HELP
Obviously, the IP protection plan that you implement must be appropriate to the nature of your business and your intellectual property. In many businesses, at least some intellectual property can be easily accessed by employees – particularly the data regarding your customers. You do not want employees leaving and taking your customers to a competitor, so your company’s internal policies must function to prevent losses and to compel compliance with your employee confidentiality rules or agreements. In some states, non-compete agreements can offer you some limited help; have your intellectual property attorney advise you regarding the efficacy of non-compete agreements in your own state.
When intellectual property is created for you by an independent contractor, that contractor is presumed under the law to be the creator or inventor of that property in the absence of a contractual agreement establishing your legal ownership. Insist on the appropriate contractual provisions in such circumstances, or you might find yourself paying for software development – or for the creation of other intellectual property – that you will end up not actually owning.
USING RESTRICTIVE COVENANTS
As a business owner, you probably already know under what circumstances it is necessary to disclose or to share your company’s intellectual property. Employees and vendors may need access to perform their jobs. Prospective investors may want to inspect your IP to help them estimate the value of your company. Depending on the type of business you’re in, sometimes even customers may need access to your IP. In these circumstances, you have the right to request a restrictive covenant. The form, extent, and length of such an agreement must address the particular business risks associated with the unauthorized disclosure of your intellectual property. Be reasonable and proportionate, and seek advice regarding restrictive covenants from an IP attorney who is familiar with your operation. In Florida, consult with an experienced Daytona Beach intellectual property attorney.
Unless it can be enforced, a restrictive covenant is useless. A restrictive covenant can be included in an employment or consulting contract, a purchase order, or a non-disclosure agreement. However it is done, it is imperative to have a restrictive covenant in place before you share your company’s intellectual property with others. A restrictive covenant should make clear the damage that you may sustain and the legal remedies you will seek if a breach takes place. A reasonable restrictive covenant can give you grounds for legal relief in the event that your intellectual property is disclosed or used in an unauthorized manner.
A good IP attorney can help you with the legal details and the precise language for restrictive covenants appropriate to your own situation. If a third party seems hesitant to sign a restrictive covenant, you may want to reconsider your entire arrangement with that party. Naturally, any intellectual property of value that is created by employees, contractors, consultants, or vendors within the scope of their employment or agreement with your own company should be your property. Let your IP attorney help you determine the best way for you to retain ownership of that property.
TRADEMARKS AND TRADEMARK REGISTRATION
Another important legal tool available to business owners implementing an IP protection plan is trademark registration. The Lanham Trademark Act of 1946 facilitates the registration of the trademarks or service marks that you use to market and “brand” your company’s services or products. A trademark can be words, symbols, pictures, icons, designs, logos, or a combination of any or all of these. To be registered, a trademark must distinguish your products or services from those of other companies so that your trademark “symbolizes” your company’s products or services. A protected, registered trademark is one of a successful company’s most valuable assets. The federal registration of trademarks gives small business owners substantial legal and commercial benefits. Registration is proof of a trademark’s validity and ownership. However, in some cases even unregistered “common law” trademarks may be enforceable under state and federal unfair competition statutes and other laws governing deceptive business practices.
Before registering your trademark, your IP attorney should conduct a search to determine if a similar trademark is already in use by another company. Applying to register a trademark can be a confusing and lengthy procedure – it can sometimes take more than a year – and it really should be handled by an experienced trademark lawyer. So long as you submit all of the required renewal forms and documents in a timely manner, your trademark registration will remain valid and enforceable. A good trademark attorney can also answer your questions about – and help you obtain – international trademark protection.
THE ULTIMATE RESPONSIBILITY IS YOURS
Once you decide – with an IP attorney’s help – on the best IP protection plan for your business, remember that your plan is meaningless unless you are willing and able to enforce it proactively both within your company and with third parties. Ultimately, as the company’s owner, you are the figure responsible for monitoring your employees, contractors, and others who have access to your intellectual property. Your internal policies and practices must reaffirm your commitment to protecting your intellectual property, and you must take the necessary legal steps if your IP is infringed.
Finally, the most important element in any intellectual property protection plan will be the advice and services of an experienced intellectual property attorney. From handling your trademark registration to representing you if necessary in infringement litigation, having the advice and insights of an IP attorney is imperative. Find an attorney that you personally like and that you can work with, someone who is willing to learn about you and your business, and someone you can count on for “the long haul.” The more your attorney knows and understands your business operation, the more effectively that attorney will be able to help you. In Florida, small business owners can obtain the legal advice and services they need by contacting an experienced Daytona Beach intellectual property attorney. Don’t wait. If you own a small business anywhere in the United States, and if your intellectual property does not have the comprehensive legal protection it needs – or if you’re not even certain what might qualify as intellectual property – make the call to a good IP lawyer as quickly as possible.