When you own a business, security is of prime concern. For instance, if you have a shop, you lock it up every night and likely have an alarm system. You also secure your data and computer systems – from hackers, from malware, from phishing scams and all the rest.
But do you do everything you can to protect your intellectual property, which is, your proprietary trade secrets, your inventions, your logo and catchphrase? If you take great pains to protect your physical property, but like many small businesses, fail to take the same efforts to protect your intellectual property, you can be making a very costly error.
Case in point: In 1972 an entrepreneur by the name of Nolan Bushnell invented what is widely considered the first successful video game– Pong. Pong was a smash hit and that in turn created a ripple effect: Within a year, a slew of Pong imitators hit the market.
As such, Bushnell’s once small business, Atari, suddenly had a heap of legal problems, much of which stemmed from the fact that it had not gotten its patent approved in time to ward-off the copycats. Said Bushnell in an interview in 2007, “I filed for a patent, but in those days patents took 3 years to issue. I don’t think my patent issued until 1975 or 1976.” Atari’s copycat problem became so significant that when the company entered into a licensing agreement with Magnavox a few years later, the deal required that Magnavox handle all of the Pong infringement lawsuits.
So clearly, properly protecting your intellectual property is critical, and given that, let’s look at how you can protect yours. Here are the basic tools I’ve learned from my experience:
Non-disclosure agreement (NDA): There are times when you want to share proprietary business information with someone else. In that case, you can have people sign an NDA, which essentially says that you are sharing confidential business information with the other party and they cannot use it without your prior, express written permission.
Copyright: A copyright protects written expressions in tangible forms – things like an article, book, manuscript or photograph. A copyright gives you the exclusive right to reproduce the work.
There are basically two ways to create a copyright. The first is simply by creating the work – this sentence is being copy written as I compose it by operation of law. The second is to register your work with the United States Copyright Office. Having a registered copyright (©) gives you extra legal protection.
Trademark: A trademark is a phrase (“Just Do It”), name (McDonald’s) or symbol (The McDonald’s golden arches) that denotes a name or business that is unique in the marketplace. There are two ways to create a trademark. The first is to simply attach a trademark symbol (™) next to your intellectual property. The other is to register the trademark with the Unites States Patent and Trademark Office (USPTO.gov) and then get a registered trademark (®).
Patent: A patent protects an invention. Unlike a copyright or trademark, patents are not created by simply affixing a common law symbol to the product. Instead, a patent must be applied for (“patent pending”) and then obtained through the USPTO. Unlike a registered copyright or trademark which can typically be obtained without the assistance of a lawyer, getting a patent definitely requires legal help.
Trade secrets: Trade secrets are a formula, list, pattern, device or compilation that give you some sort or proprietary business advantage. A customer list is a good example. For a trade secret to be considered as such it must be useful, proprietary and also something secret. You can share a trade secret using an NDA.
You work hard to create your intellectual property, and so it would be wise to work equally hard to protect it. Are you concerned with protecting your intellectual property? Are there any specific ways that you’ve found works best? Share your thoughts with the SBOC community below.
About Steve Strauss
Steven D. Strauss is one of the world's leading experts on small business and is a lawyer, writer, and speaker. The senior small business columnist for USA Today, his Ask an Expert column is one of the most highly-syndicated business columns in the country. He is the best-selling author of 17 books, including his latest, The Small Business Bible, now out in a completely updated third edition. You can listen to his weekly podcast, Small Business Success, visit his new website TheSelfEmployed, and follow him on Twitter. © Steven D. Strauss You can read more articles from Steve Strauss by clicking here.