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Summary: Intellectual property may be your most important business asset. Here we explain how it is defined and how to protect it.
Intellectual Property
Intellectual property (IP) is a term used to describe assets created by human intellect that do not have a physical presence. In contrast to tangible assets, like buildings and machines, IP is intangible and cannot be held or transferred in the same way. Nevertheless, IP can have significant value for a business so must be identified and protected just as physical assets are.
Some of the most common forms of IP are:
- Patents. These legally filled and approved documents grant protection to the IP behind an invention, be that a design, process, piece of technology, or machine. Patents prevent others from using the invention without a license for a specified period.
- Copyrights. These assign ownership of original IP, such as artwork, literature, music, theatre, or film. They prevent others from profiting from these works without express agreement from their creator/owner.
- Trademarks. These are identifiable symbols, such as logos or catchphrases, that have value due to brand association. Examples include McDonald’s Golden Arches or Nike’s “Just Do It”.
Other examples of IP include registered designs, such as for packaging or color combinations, licenses for franchise branding, trade secrets like recipes or formulas, and, increasingly, digital assets. All these types of IP and more form crucial elements of a business’ identity, success, and value, and they must be protected to prevent others from diluting that value or profiting from work they have appropriated from their original creator or owner.
Protecting Intellectual Property
Protecting IP might be essential, but it is not always as straightforward as protecting physical property that can be seen, held, locked away, or guarded. Nevertheless, several legal mechanisms and procedures allow creators and owners to maintain control of their work.
Some of these protections are granted automatically. Copyright, for instance, is assumed so long as the owner can prove their work was original at the time of creation. Certain designs are protected for set periods, especially those with distinctive features from similar products. There are also assumptions that rival businesses should not attempt to “pass off” their products and services as those provided by a competitor to gain an advantage from that association.
Other protections, including patents, trademarks, and other kinds of design, must be applied for and granted by state bodies. Those who are successful are then given prescribed levels of protection, either in perpetuity or for a specified period.
In an increasingly global world, it is also important for companies and individuals to protect IP outside the borders of their nations. While national authorities only have the right to grant legal protections for IP within their territory, there are several international agreements and treaties in place to help expand these protections around the world. It is vital, however, to understand the extent and limits of any IP protection in place in order to assess and harness its full value.
Challenges in Intellectual Property Management
Despite the protections in place, IP infringements are common and can be difficult to police. This is particularly the case online when tracking unpermitted use of IP, which can be a gargantuan task. Simply knowing when IP has been infringed can require significant resources, and larger corporations will have whole departments dedicated to this. However, while Disney may have the resources to find and prosecute instances in which its IP is infringed all over the world, a smaller business may find this impossible. Even when infringement is determined, the costs and time required to prevent it or seek damages can be prohibitive.
As a result, many IP owners will attempt to find alternative solutions to infringement, such as licensing agreements or mediation, before resorting to costly legal processes. In many circumstances, they will just give up on enforcing their IP rights altogether.
Another, more general challenge for IP management is balancing the need for protection against the benefits of maintaining public access to intellectual developments. Access to cultural works is generally seen as a benefit to society, as is maximizing the good done by new technologies such as medicines or those that relieve hardships. Those who decide how, when, and which IP should be protected constantly battle with these dilemmas.
Best Practices for Intellectual Property Management
Any business or individual who obtains or creates valuable IP should know how to protect it. They should be aware of the automatic protections in place as well as those which must be sought and how to attain them. This, however, is a highly specialized and fast-changing area of law, and keeping on top of it can be extremely challenging. For this reason, the best practice is often to outsource the responsibility for IP management to a specialist lawyer or expert service. While this will come at a cost, the potential value could be immeasurably higher.
There are many case studies and examples that show the value of taking IP seriously. Apple, for instance, was extremely active in terms of patents, a practice that has earned the corporation billions. Disney is well known for sending cease and desist letters for even the most inconsequential of infringements. Then there is Waymo, which took action against Uber to prevent any use of Waymo technology in the pursuit of developing self-driving cars. An expert IP management company will offer dozens more examples when demonstrating why it will add value by protecting your IP.
FAQ
In an increasingly information-based world, IP can make the difference between failure to compete and becoming the next billion-dollar company. Profits from what is created with the mind can far outweigh those from what is physically made. The key, however, is protecting that IP to maintain the biggest competitive advantage for the longest period of time.
When filing for a patent, the first step is to check the invention is patentable and has not already been publicly disclosed by another party. Then the type of required patent must be determined, the application must be completed, and any fees paid. The services of a lawyer or agent may be utilized at this stage. The application will be assessed and any missing information requested before it is approved and published, or rejected.
