Intellectual property is a set of intangibles owned and legally protected by a company from both external and internal use without consent. Key questions for intellectual property center on how to identify, value, procure, monetize and enforce protected assets.
Intellectual property strategy matters for four different reasons. First, freedom to operate, which ensures a company has the rights needed to conduct and grow its business. Second, it is an investment in the company because it gives the company the ability to protect the output, and it also increases investor confidence long term. Third, intellectual property assets reflect the value of creativity in a business. There are four general types of intellectual property: 1) Copyrights; 2) Trademarks; 3) Trade Secrets; and 4) Patents.
Copyrights
Copyrights protect original created works such as software, databases, publications, art, literature, video, music, architecture, performance and recordings. Copyrights protect against copying and distribution but do not protect the ideas themselves. Ownership of a valid copyright and copying of constituents of the original work are essential elements under a copyright infringement claim. It is important to ensure that copyright protection is essential in all parts of your business operations.
Trademarks
A trademark is any word, symbol, logo or combination thereof used to designate the origin of goods or services. A trademark with a ™ symbol indicates the mark only has common law protection. A trademark with ® symbol indicates the mark has been registered with the U.S. Patent and Trademark Office (USPTO) and has federal protection. A trademark ensures that a company can exclude others from using its mark. Finally, trademarks are important for branding purposes and to protect the value and reputation created by a business.
Trade Secrets
Trade secrets are “all forms and types of financial, business, scientific, technical economic or engineering information, including patterns, plans, compilations, program, devices, formulas, designs, prototypes, methods, techniques, processes, procedures, programs, or codes, whether tangible or intangible, and whether or how stored, complied, or memorialized physically, electronically, graphically, photographically, or in writing.” Since there is no government protection, companies must take reasonable measures to keep such information safe.
Trade secrets are important because they protect ideas that offer a competitive advantage, protect proprietary “know-how” information, and they also protect valuable business information. There is no government registration process required for trade secrets. Liability of trade secret misappropriation arises when trade secret information is disclosed or utilized in violation of a confidential relationship.
Consequently, there are different types of remedies for breaches. First, a court may grant an injunction to prevent any actual or threatened misappropriation. Second, the court may condition future uses of the trade secret on the payment of a reasonable payment. Third, a court may award damages following a finding of misappropriation. Fourth, once a trade secret is willfully and maliciously misappropriated, a court may award exemplary damages.
Patents
Finally, one of the most powerful forms of intellectual property protection is a patent. A patent is an exclusive right granted for an invention, which is “any new and useful process, machines, article of manufacture products, or composition of matter, or any new and useful improvements.” Patents require government registration. The duration of utility patents is 20 years from the date of filing. It is important to note that the United States is a first-to-file country.
It is also very critical for companies to have strong employment agreements that include invention assignment provisions, confidentiality agreements and procedures for protecting trade secrets in order to safeguard these important intangible corporate assets. Parsons Behle is equipped to assist companies with such agreements.