The formula for Coca-Cola has remained a closely held trade secret since the drink was developed in 1886. The McDonalds golden arches are recognized worldwide as the company’s symbols are found in 119 countries. Both are examples of intellectual property (IP), which, in one form or another, touches our lives every day. Still, as we plan new businesses and products, this highly profitable aspect of business development often is overlooked.
IP protection is a key to the success of businesses old and new alike.While businesses dedicate considerable time, energy and expense to raising new business ventures, often the company’s most valuable IP assets are unprotected. This is unfortunate for unsuspecting business owners because the threat of IP theft is pervasive in our economy. A recent U.S. Chamber of Commerce Report estimates that American businesses lose $250 billion and 750,000 jobs each year due to IP theft. This problem is causing great harm in virtually every sector of American industry including the automotive, electronic, pharmaceutical, computer software and recording industries, to name only a few.
Small businesses are particularly at risk of IP theft because they often lack the resources necessary to sufficiently protect new products and ideas. The risk of IP theft is easy to overlook during the formative years of a business venture because the costs of office space, staffing and technology can be staggering. However, the problem is so pervasive that the United States Patent and Trademark Office (USPTO) has launched a Small Business Education Campaign to make entrepreneurs aware of these threats.
Protecting your IP is possible even for small business owners. The simplest step in protecting the IP of your business to keep it secret during development. You can do this by having your attorney draft a nondisclosure agreement for employees and others with whom you share your business ideas. In addition, IP protection in the form of patents, trademarks, copyrights and trade secrets can be utilized to keep your business profitable and secure from counterfeiting and piracy. Small businesses conducting business abroad are not protected by simply securing IP protection in the United States; businesses should consider filing for protection in every country where business is conducted. Finally, some companies now offer insurance to cover the legal expense of enforcing IP rights in infringement actions.
If you discover that one of your business products is being counterfeited or infringed upon, there are options available before filing suit. First, make sure that you have sought proper IP protection and registration of the work in question. Second, have your attorney draft a cease-and-desist letter outlining the infringing activity and damages to which the infringer may be exposed. Finally, if the infringement continues, your attorney can help evaluate whether it is necessary to resort to the legal system to seek an injunction.
The importance of registering with either the USPTO or the US Copyright Office cannot be overstated. Registered works are afforded much greater protection in the face of infringing activity, and the government has steeper penalties for infringement of registered works. These penalties include the recovery of costs, attorney’s fees and statutory damages of up to $150,000 against those who are found to be infringing on IP rights.
As IP theft becomes more common, it is critical to make IP patent, trademark, copyright and trade secret protections a central part of your business strategy. There are many ways to protect new ideas and business ventures as they arise. We would be happy to assist you in determining which IP protection may be of the greatest benefit to your business.
