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All small business owners and entrepreneurs have one thing in common: they had a great idea and the passion to pursue the challenge of starting a business. There are many hurdles to overcome when building a business to ensure its success. What keeps someone else from stealing your idea, and capitalizing on it? Are you aware of the new law, passed in 2011, that grants a patent to the first person that creates an invention, rather than the person with the idea? There are many misconceptions about protecting intellectual property, and this guide will help you move in the right direction toward protecting your intellectual assets.
Intellectual property includes nearly anything you’ve created, whether it be a design, idea or physical product. Protecting intellectual property is the foundation of promoting innovation in business. Unfortunately, many small business owners haven’t educated themselves on the relevance of intellectual property protection, potentially leading to theft of ideas and possible business failure.
Why Protecting Intellectual Property Matters
Copying or mimicking ideas occurs constantly in the business world. As a consumer there is no doubt that you’ve seen products on store shelves or in commercials that look nearly identical to another brand. Thinking about this from behind the perspective of a business owner, it is quite unsettling. Imagine the idea you worked so hard to create, being copied, and producing profit for someone else.
Aside from the obvious theft prevention benefit of protecting your ideas and products, other advantages include:
Giving your small business a long-term competitive advantage
Increasing your business’s appeal to potential investors
Boosting your reputation as a business
Allowing you to expand your business through a franchise
Unfortunately, small business owners and micro business owners are often at a disadvantage when it comes to protecting intellectual property. Most of these businesses don’t have the knowledge and resources to adequately protect their intellectual property, leaving them with few options if theft or piracy does occur.
Trademark, Copyright
or Patent?
The most common methods of protecting intellectual property involve copyrights, trademarks and patents. All 3 of these are often confused with one another or are erroneously believed to have more power than they really do.
Copyrights: Copyrights apply to intellectual property that has an author. For example, anything that is literary, artistic or musical in nature. If your small business provides published or unpublished works of this nature, you will need a copyright to protect your material. Copyrights can be effective for up to 120 years, depending on the type of work.
Trademarks: A trademark protects anything that distinguishes your intellectual property from other manufacturers. This includes logos, symbols, words and sounds. Similar to trademarks, trade dress protects the design and appearance of a product. For example, a trade dress would prevent a competitor from using your product’s packaging color scheme or design. Servicemarks also fall under the trademark category. A servicemark is a trademark that protects service rather than a product. Trademarks are effective for as long as the business owner wishes it to be.
Patents: Patents apply to small business owners that have created a new invention or discovered something of importance. There are 2 main types of patents that apply to most small businesses, utility patents and design patents. Utility patents protect inventions involving a process, machine or other form of composition to create. Design patents protect any form of original appearance.
Simply put, if you need to protect how your product works, get a utility patent. If you want to protect how something looks, get a design patent. You can acquire both if it’s applicable to your small business. Utility patents are effective for 20 years while design patents are effective for 14 years.
Protecting Your Business Overseas
Patents, trademarks and copyrights, as well as other forms of intellectual property protection, are only effective within the country they are granted. Your small business might be heavily protected within the United States but that doesn’t mean this will carry over to overseas countries.
One country that has proven to be a major threat is China. Many American businesses have unknowingly had their ideas stolen by these overseas manufacturers and upon the discovery, weren’t able to do much of anything about it. It is crucial to apply for the proper protection if you plan to do business abroad since small businesses are already at a potential disadvantage.
You can apply for patents and trademarks in other countries just as you would here in the United States. If you plan to do business in many different countries it would be wise to work with an organization like WIPO (World Intellectual Property Organization) that will allow you to file one form to cover all countries.
Protecting Online Assets
There is a growing number of online businesses or small businesses that have an online presence. The digital world has so many advantages but also allows theft to become easier than ever.
First and foremost, even if you only own an online business you still need to apply for the proper protection in the form of trademarks, patents and/or copyrights. To further protect your business you will want to place copyrights within your website’s footers and have a dedicated page that explains what people can and can’t do with the information on your website.
One final aspect of protecting your small business online involves your URL. If you’re just starting your business then check to see if your ideal website domain is available. It isn’t unheard of for a small business to begin as a brick-and-mortar and upon starting a website, find out someone else is already using their name.
Intellectual Property Law
Intellectual property laws are outlined in the American Inventor’s Protection Act which was enacted in 1999. This act was later amended in 2002 by the Intellectual Property and High Technology Technical Amendments Act.
Information about these acts can be found here on the USPTO website.
More recently President Obama signed the Leahy-Smith America Invents act in late 2011. This act completely changed patent laws. This new act will grant a patent to the first person that creates an invention over the first person to create the idea. The benefits to this are obvious but there are a few skeptics who believe this new system is unfair. You can read more about this act here.
Intellectual property laws can be complex and it is strongly advised to consult with a patents or other intellectual property attorney.
When Your Intellectual Property is Stolen
If you’ve discovered that your intellectual property has been stolen it’s important to take action quickly. First and foremost, contact the offender and send them a cease and desist letter. This letter doesn’t need to be confrontational but rather be polite but firm in your demands to remove your stolen content.
Generally people aren’t aware of intellectual property laws and have no idea when they are breaking them. However, for those who are unwilling to stop what they are doing, it is important to get in contact with an attorney. There are pros and cons to hiring an attorney but if your business is being severely hurt financially, they will be your best bet in finding a solution.
What You Can Do Now
You can begin protecting your small business right now by:
Assessing your small business to decide what is worth patenting, copyrighting and/or trademarking.
Going to Google Patents to see if any ideas have already been patented.
Contacting The United States Patent and Trademark Office to find more information and applicable forms to fill out.
Investing in an attorney to write a thorough NDA (non-disclosure agreement) to be used whenever
you share intellectual property with others
Intellectual property is the lifeblood of your business. Protecting it will ensure your small business is as successful as possible. For more information on growing a small business, please visit the NASE Business Learning Center.