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Top 10 IP Mistakes: #10 Failing to Recognize IP

eyeEvery business has intellectual property (IP) whether they know it or not, and I am not referring only to patents. At a minimum every company has a business name and probably one or more product names as well. Practically everyone has a web site these days, so they have domain names and content as well. Many companies offer software as a service (SaaS) on a subscription basis over the Internet. And of course there is the "secret sauce" that gives a company its edge, e.g. business planning, strategy documents, customer lists, and secret know-how. All of these things are intellectual property and need to be protected in one form or another in order to preserve their value.

Although every business has intellectual property, not every business is aware of it. Such blissfully unaware businesses are blind to the dangers surrounding them. Typically, they just have not been burned yet, and they either wise up after their first law suit or they tend to under-perform; possibly without even being aware that they are underperforming. They are used to a certain level of success and cannot see beyond it.

So, what's the worst that can happen? The blissfully unaware business may not even be aware of whether they are entitled to a government sanctioned monopoly - a patent. They are almost certainly unaware of competitors siphoning off customers by confusing them with similar business and product names - trademark infringement. They may run afoul of state and federal antitrust laws by trying to protect their legitimate interest in controlling their brand image. Now, when an employee leaves and competes against them with their own know-how, even the blissfully unaware business gets it; they can readily see and feel that harm, but unfortunately for them it is usually too late at this point. Waiting to act until a problem actually materializes leaves them with options that are typically uncertain, disruptive, and expensive. Of course I am referring to litigation.

The solution is proactive planning in collaboration with good legal counsel. An intellectual property attorney should review your business practices and policies to establish your risk exposure and how best to mitigate it. Typically, risk mitigation will come in the form of standardized processes, policies, and contracts with employees and contractors. For example, new employees should be required, as a condition of employment, to agree in writing to keep company secrets, to generally act in good faith, and to transfer to the company ownership of anything and everything that the employee creates in the course of his employment. Innovative companies that employ people for the purpose of creating new products should also have a standardized invention disclosure program in place where new ideas are assessed for patentability and freedom to operate (FTO) issues. New brand names should be similarly vetted to ensure that they do not infringe the preexisting rights of others.

Every business is unique and their needs are as varied as business itself. These are just a sampling of the issues. The bottom line is that every business, no matter how experienced, needs good counsel and should not be afraid to ask questions to solve problems preemptively with foresight and planning, rather than reactively where the only remaining option is damage control.

Stay tuned for more of the Top 10 IP Mistakes.

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