5 Small Businesses Intellectual Property Tips

Small Business IP Tips

When starting and running a small business, it is important to understand what IP is, ensure you have valid IP rights, understand the context, monitor your IP rights and be able to adapt.

by
November 21, 2016

For most small businesses, the two most valuable considerations are of course time and money. Which is why many of them often fail to appreciate the importance of intellectual property (IP) in business growth.

But IP—which consists primarily of patent, trademark, trade secret, and copyright—is a crucially vital consideration, especially in today’s world of the internet and social media, and especially for a small business, where every dollar is important.

Not having a grasp on your intellectual property situation and portfolio can lead to some very serious ramifications. According to the U.S. Patent and Trademark Office (USPTO), IP theft robs American companies of almost $250 billion, per year. Of course, lots of that is the large companies—the Apples, the Googles—but the small business share of that pie is underscored by how little such businesses seem to care about IP protection in the first place.

A National Science Foundation survey of U.S. companies showed that small companies simply don’t value IP protection nearly as much when it comes to what’s deemed “important to operations.” In the realm of trademark, over 80% of large companies saw the importance of protection, compared to only 56% of small companies. Similar disparities existed in the other IP realms as well—for utility patent, 57% to 32%; for copyright, 66% to 47%; even for trade secrets (the category most highly valued by small businesses), nearly 15% more large businesses saw the importance of protection than did small businesses.

And yet, the problems exist just the same for large and small business alike, albeit sometimes in differing forms. The billions of dollars in lost revenue will speak to that. But the $250 billion statistic is also an incomplete statistic, since many repercussions and consequences of IP mismanagement aren’t even measurable in dollar form.

The following is a list of some of the things small business owners should keep in mind as they grow their brand, or even as their brand materializes in the first place.

1. Understand IP

First and foremost, understand what we’re talking about when we talk about “IP.” Certain forms will be more important for some industries than others, but there is no company in existence that doesn’t have relations with some aspect of intellectual property.

Patents are probably the least common of the major IP fields. Patents are awarded to inventors or designers, and they grant a monopoly on those inventions and designs for a relatively brief time (which varies depending on what patent you’re seeking). They are the most expensive to get—total costs can amount in the thousands of dollars for even a single prosecution—but they don’t necessarily have to be a black hole. If you create something new, or have a particularly ingenious design, you’re going to want to patent it.

Copyrights typically protect artistic works, like songs, pictures, books, and movies. While technically copyright vests at the moment of creation (meaning you do not have to register in order to be a valid copyright owner), national registration grants a number of invaluable benefits. Copyright registration is also incredibly cheap, comparatively speaking.

Trademarks are probably the most universally important to businesses, despite many businesses not even realizing it. A trademark is a source identifier—a brand, a name, a logo—and they, like copyright, do not require registration in order to become valid. Instead, trademarks in the United States require use. That said, however, trademarks—also like copyright—are far more valuable to you if you’ve registered them with the USPTO. Filing fees will cost somewhere in the area of $200-300, and if you utilize an attorney, the cost could be double that, but even so, the amount is not so egregiously high as to devoid the venture of its worth. Among the benefits of trademark registration include national priority. So if you think you might want to expand into new territory in the upcoming years, you’re especially going to want to register.

Finally, trade secrets are business processes (and the like) that are not known to the public. They are extremely valuable to anyone who might need to maintain secrecy of something. And since there is no registration of a trade secret, all that’s required is that you take certain steps to maintain its secrecy. Like, for instance, requiring visitors and employees to sign nondisclosure agreements, or keeping the secret information in locked vaults.

Knowing which forms of IP are pertinent to your specific business, as well as your industry as a whole, can help streamline the process and the inquiries, but maintaining a working knowledge of all of the forms is still beneficial.

2. Ensure You Have (or seek) Valid IP Rights

This is arguably the most important step for a small business (after, of course, simply understanding what all of this means). If you think you have a valid trademark, or copyright, but you don’t, it’s crucial that you not only understand why, but also that you take steps to rectify it immediately. Failure to do so would result in vast amounts of time and money wasted, not to mention possible infringement suits if the reason for your invalidity is that someone else already has the rights.

And that really highlights a more specific point. Your rights may not be “valid” for any number of reasons. Maybe the name you came up with for your business has already been taken; maybe it’s confusingly similar to a name that’s already taken; maybe the logo you’ve chosen has already been taken; maybe the name or logo you’ve chosen are simply unprotectable in the first place (perhaps for being too generic or merely descriptive); maybe the work you think is copyrighted is actually infringing on someone else’s work; et cetera.

So you’ve really got to put in the effort to make sure your rights will stand. In the realm of trademark, that typically means doing your research and making sure no one has taken your name already, and also that your name will have staying power. Small businesses often get trampled by this oversight. The craft beer industry, for example, is littered with examples of new beer names that earn their brewer a cease and desist letter because, as it turns out, the name wasn’t all that “new” after all.

The point is to do all this homework up front. It may seem tedious or daunting, but it’s worth it, considering that the alternative is you pouring money into marketing campaigns and brand recognition just to find out too late that your name constitutes trademark infringement and now you have to change.

The process of knowing your rights starts, as with everything nowadays, on the internet. The USPTO is a great resource for understanding both trademark and patent systems and rights. The Library of Congress’s Copyright Office website is great for copyright. Then there’s STOPfakes.gov, where small businesses can go to find information on all sorts of IP rights and regimes. WIPO’s website has information and databases pertinent to the international IP stage.

But, keep in mind that while the process may begin online, consulting an attorney with specialized knowledge in either IP or business is always advisable. One pitfall of the internet is that it can bestow a false confidence; having all the information at one’s fingertips has imprinted on many the belief that we in fact know all that information. Checking with an attorney is an easy and worthwhile way to make sure you don’t miss, or misunderstand, something crucial to your business.

3. Understand the Context

There is no such thing as a “universal trademark dispute.” If two companies battle over something trademark-related, it will look very different depending on the context. Are the two companies in the same field? Are the two companies in the same geographic region? Does the dispute implicate social media-related rights? If you understand, not only what it means to have a “trademark,” but also what the scope of your trademark rights are in this context, you’ll already have an immense leg-up on other small businesses.

4. Monitor Your IP Rights

This will be true across all IP fields, but again, it’s important to note the context. Not all small businesses will be able to police their rights like Google, who are somewhat famous for their aggressive cease-and-desist approach. But of course, not all small businesses have to be so aggressive. Nor do they always necessarily want to. If you’ve posted a photo to your website—a photo to which you own the copyright—and a blogger takes that photo and posts it to their own site, threatening lawsuit is probably not going to be your first move. You may simply contact the violator and alert them as to the violation, or ask them to provide a source. If the violation takes place on social media like Facebook or Twitter, you could also familiarize yourself with their terms of use, and pursue an option that way.

But then, threatening anything may not be your most prudent strategy. For instance, if the blogger also mentions your company in their post, then suddenly they’ve become an advertisement of sorts, despite technically violating one of your rights. It’s not just about brand; it’s also about reputation. And more broadly, it’s all about context.

5. Be Realistic and Adapt

Don’t think, just because you’ve been given a patent or your trademark registration has been approved, that the hard work is over or that the business will be successful. This may sound patronizing to someone who’s already surely invested plenty in a business and/or business school. But it’s simply important to remember that no IP regime exists in a vacuum. Intellectual property is, at least in the U.S., far and away primarily an economic right. Earning trademark registration is essentially tantamount to earning the right to go out and sell it. Registration doesn’t, by itself, market the brand. So it’s crucial, yes, to acquaint yourself well with your IP rights, but that’s not by any means the only component to consider.

So adapt. Be flexible. Marketing well means changing often. If a big company sends you a cease-and-desist, explore your options; if your options are limited, deal with it and move on. If another business or person steps on your rights, deal with that, too, balancing the aggressive with the strategic.

And consult with experts. Whether it’s an IP attorney or business attorney or marketing director, don’t be afraid to consult. You can learn a lot from the internet, but the game-time decisions should be especially prepared.

 

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