Intellectual property (IP) is a hot topic today. Every day, the news is filled with stories about the importance of IP to global trade and economic prosperity, concerns about the theft of IP from corporate and government networks, and lawsuits over IP infringement, among other topics.
For many, however, the question is: what is IP?
A 2012 Forbes article highlighted that 68% of the graduate engineering students surveyed at the University of California could not define a ‘trade secret.’ Similarly, 51% responded that they could not sufficiently answer the question, “What is a trademark?” This disparity among engineers – many of whom are creators of IP – reflects the extent of misunderstanding of IP.
Given that as much as 75% of most organizations’ value and revenue sources are in intangible assets, IP and proprietary competitive advantages, every person in business should understand the basics of IP and recognize exactly which information should be protected within their organizations.
IP is generally divided into four main categories: copyright, trademark/design rights, patents, and trade secrets. Each of these types of IP offers different rights and levels of protection, can be held simultaneously within a company, and presents different challenges in protection.
Here’s a quick overview:
- Copyrights offer legal protection for published creative material, such as books, magazines, newspapers, photographs, music, film, and articles. In your business, you may be expected to send, receive, and use this kind of protected material in interactions with customers, producers, and suppliers on a daily basis. There are few exceptions for the use of copyrighted materials without permission. Similarly, there are usage limitations so that business partners cannot exceed the permissions granted. Exercising responsible business practices to ensure the acquisition of copyrights, where appropriate, and effectively managing copyrighted material can avoid unnecessary costs, legal liability, and other risks to your business.
- Trademarks are symbols, such as brand names, images, numbers, or graphics that exclusively identify a company’s goods or services. Only the owners of a trademark may determine who has the right to use the mark to distinguish their goods and services. Design rights protect the appearance of a product or packaging against copying and use by others. The most common abuse of trademarks and design rights are counterfeit goods. To avoid consumer safety concerns, financial risks, and quality and security issues, trademarks and design rights must be protected.
- Patents provide special protective rights for an inventor to be the only one to produce, use, and sell the invention, or allow others to do so, for a period of time. Patent infringement claims often arise in business dealings because companies can make minor alterations to a product and secure a new patent if the difference is sufficient. However, too often companies fail to investigate current patents, begin producing without securing a new patent, or willfully infringe on patents, which can complicate patent infringement disputes. Responsible management systems and record-keeping habits can help companies reduce the risk of patent infringement allegations.
- Trade Secrets are confidential technical or business information that is not generally known outside of the company, commercially valuable, or subjected to reasonable steps of maintained secrecy. The unauthorized disclosure of trade secrets has been a growing problem for companies internally and throughout their supply chains. To prevent redirection of business, loss of competitive advantage, and having to pursue legal action, companies should institute robust standards of physical and electronic security with employees, contractors, suppliers, and partners. Continual risk assessment and system monitoring is also vital to protecting trade secrets.