Guest Blog By: Katherine (Tori) Lutz
Though there are expert attorneys for any area of law, it is often important to have a general understanding of areas that directly impact you and your livelihood.
For entrepreneurs, intellectual property (IP) law is definitely one of those areas since protecting the unique ideas and elements of a business or brand is vital to keeping it alive in an aggressive marketplace.
That said, IP law has an incredibly vast domain (hence why patent attorneys thoroughly study the subject for years) and running a business requires extensive time and energy for other matters, so what are the key takeaway points?
Here is what entrepreneurs should know about IP law to make sure they are actively and successfully protecting their ideas.
4 Main Areas of IP Law
To start off, it’s important to know how IP law is divided up for the main areas of protection: trademarks, copyrights, patents and trade secrets.
Trademarks cover the protection of anything related to branding. This could be a logo, a symbol, a slogan, a name - anything that helps a consumer definitively associate a product with the company.
Since most consumers will factor reputation and brand-recognition into their purchasing decisions, trademarks are a vital way to build a positive, recognizable image that stands out against similar products.
Copyrights protect pretty much anything that has to do with art. Writing, music, artwork, etc. are all examples of things that are protected by copyrights.
Protection from a copyright gives the owner of the work the exclusive right to distribute, reproduce and perform/display the work publicly. It also gives them the rights to any derivative works so that ideas aren’t blatantly stolen and incorporated into other things.
While both trademarks and copyrights do have common law protection that gives a creator the right to their intellectual property as soon as they have proof of its creation, registering officially gives much more opportunity to actual enforce protection in court and compete on a larger scale.
Patents are one of the most intense forms of protection, and (unlike the other types) they don’t have any protection under common law (patents must be registered for exclusive rights to granted and to hold up in court).
They surround protecting inventions and are the ultimate goal for most entrepreneurs, regardless of whether they intend to sell the patent and go on to develop more ideas or if they want to hold onto it so they can bring the product to market and build their brand.
There are several different types of patents, such as design patents or utility patents, because different inventions and ideas will have different elements that need to be protected (e.g. if an invention’s look and appearance is its unique, valuable factor, a design patent makes the most sense).
Lastly, trade secrets cover protection of information that a company acquires through luck or experience that has clear, economic value.
This information can be as fascinating as a secret recipe for a beverage or as standard or seemingly dull as vendor lists. As long as the information is valuable and a reasonable effort is being made to keep it a secret, it can qualify as a trade secret.
This is particularly helpful when holding individuals accountable for spilling a secret and possibly jeopardizing a business by giving away its unique, earned knowledge that gives them an edge in the marketplace.
Why Does it Matter?
Entrepreneurs face a challenge that bigger businesses don’t: they are the underdog, and that makes them vulnerable.
With massive businesses and corporations dwarfing startups and hopeful entrepreneurs, it is virtually impossible to compete without making sure your ideas can’t be stolen and produced by someone with more resources, influence and experience.
J.D. Houvener, a Los Angeles patent attorney, puts particular emphasis on IP protection for smaller ventures for just this reason:
“The simple reality is that if you have a good idea, someone will want to take it. It’s an easy, surefire way to make a product or service that will sell since the hard part of creating and developing is already done. And no matter how brilliant you are and how well you develop your idea, a bigger company will have no difficulty washing you out of the marketplace. It’s scary, but it’s preventable.”
Aside from an entrepreneur’s reasons for interest in IP law, society in general also benefits because it helps to promote innovation by not having fresh, brilliant minds too afraid or discouraged to compete. After all, if an existing company will take your idea and outsell you anyway, why put years of hard work into creating it?
Ultimately, IP law is critical to both the entrepreneur and the consumer, so a widespread education of the basic concepts and the degree of importance is critical.
The Risk of Neglecting Protection
It can be easy to feel too overwhelmed with the day-to-day responsibilities to put much care into protecting intellectual property, but this has been cause for disaster for many entrepreneurs at varying stages in the game.
Some entrepreneurs will develop an invention but forgo the patenting process for reasons like cost, eagerness to get to market immediately or simple miscalculation of the necessity for patent protection.
Unfortunately, this is an easy way for an idea to get stolen and for the original inventor to get drowned out of the marketplace. Without the exclusive rights to their idea, it becomes public knowledge after a year and is free game for anyone with no chance at securing a patent.
By not protecting branding through registered trademarks and enforcement, a business will fail to stand out with unique, identifiable factors that customers immediately associate with them and their business.
Trade secret disasters can destroy a company’s advantage and cause them to scramble in search of another way to make themselves stand above the competition. Sometimes, if the trade secret was something like a secret recipe or other piece of information that had enough value, the business may even end up failing.
There are a variety of ways in which neglecting protection can cause disaster for a business, and facing that disaster when it could have been prevented is incredibly frustrating, especially since the failure wouldn’t be due to lack of skill, work or knowledge about your industry.
IP law can be daunting, but that’s no reason you should let someone get away with infringement.
By understanding the basics and importance of things like trademarks, copyrights, patents and trade secrets, you will be much more prepared when it comes to making sure you’re protected and that you enforce that protection whenever needed.
For more great entrepreneurial resources, be sure to look through our other blog posts and keep up with our regular updates!
Katherine (Tori) Lutz is a recent Florida State University graduate and current student at Columbia University. Professionally, she has a great deal of experience in freelance writing, editing and marketing. She is currently living in New York where she hopes to become a journalist.