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Intellectual Property - Protecting Your Most Valuable Assets

Tip of the Month

July 2014

Intellectual Property - Protecting Your Most Valuable Assets

In today’s competitive business environment fueled by the Internet and e-business, understanding what intellectual property means and finding ways to stop competitors from stealing your ideas is vital. This is a complicated topic and it pays to consult legal and patent experts before you proceed.

What is Intellectual Property?

Intellectual property includes products, services, industrial designs, literary and artistic work, as well as names and images created by the minds of their owners. Intellectual property is divided into two broad fields:

  • Industrial/business property, which often uses patents and trademarks to protect inventors from other individuals or entities making unauthorized use and profit from their industrial designs, inventions, ideas and geographical indication (e.g. Bordeaux wine denotes wine produced only in the specific Bordeaux region).
  • Copyrights, which usually cover literary works (novels, plays, etc.), music and artistic works like paintings or photographs as well as architectural designs. These rights also are extended to performers, producers of recordings, films, movies and TV programs.

Although the traditional tools – patents, trademarks and copyrights – can provide significant protection for the name and look of a product for limited periods (patents are usually granted for 20 years and copyrights usually for 50 years or 50 years after the creator’s death), they don’t provide everything business owners might need to safeguard their intellectual property from misappropriation. Misconceptions and omissions can prove very costly.

Common pitfalls

  1. Failing to register your website name (URL) before seeking a trademark. You might have obtained trademarks for your product/business name and logo but the trademarking doesn’t automatically cover the name of your website. Unscrupulous individuals have been known to monitor the website operated by the U.S. Patent and Trademark Office, and steal site names for their own enterprises. Unless you’ve registered the URL, there’s little you can do if someone purloins yours and siphons business away from you.
  2. Assuming U.S. patents and trademarks will protect your products/services overseas can be a costly mistake. There has been a World Intellectual Property Organization since 1970, but don’t assume there are universally recognized and enforceable global standards. WIPO administers an internal register of trademarks, which eliminates the need for businesses to file applications to register their trademarks in multiple countries. Many industrialized nations have protection systems that are centuries old, but emerging nations often are still in the process of establishing legal framework to protect intellectual property. Depending on your type of business, you might need to obtain intellectual property rights – including the rights to country specific URLs – in all the various countries where you do business. It can be expensive and difficult to acquire patents in some countries – Japan is notoriously difficult. Patent lawyers often counsel budget-conscious companies to identify geographical locations where the risk is potentially greatest – locations where manufacturers might be more likely to steal your idea, website name, product name or logo.
  3. A patent doesn’t bestow the sole right to produce something. Instead, it allows the patent holder to prevent someone else from using the intellectual property covered by the patent without permission – which usually involves financial compensation for the individual(s) who created the product or process. Competitors will try to find ways to ignore existing patents, and fighting infringements usually requires legal action. Proving your patent rights have been infringed is a lot simpler if you have used all the various tools available to you, such as trademarks, copyrights, registered URLs, etc.
  4. The field of copyrighting and its related rights in cyberspace have grown exponentially as Internet use has exploded across the globe. Efforts continue to develop Internet copyright treaties to prevent unauthorized access to creative works.  
 

These articles are intended to provide general resources for the tax and accounting needs of small businesses and individuals. Service2Client LLC is the author, but is not engaged in rendering specific legal, accounting, financial or professional advice. Service2Client LLC makes no representation that the recommendations of Service2Client LLC will achieve any result. The NSAD has not reviewed any of the Service2Client LLC content. Readers are encouraged to contact their CPA regarding the topics in these articles.

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