Companies invest significant resources developing products and services that are intended to generate revenue. The ability to prevent competitors from copying these new products and services utilizing intellectual property (IP) protection is essential.
However, many companies fail to fully protect all of their resources. Or, by failing to educate their workforce on the vulnerability of unprotected assets, unintentionally spoil the outcome of products in development before they reach the market.
Smart Business spoke with Sean M. Weinman, an attorney at Fay Sharpe LLP, to learn what companies at various stages of their lifecycle must do to protect their IP.
What are some common mistakes young companies make when it comes to their IP?
The most common mistake young companies make is failing to protect their intellectual property (IP). Some companies choose not to protect their IP because they don’t believe that IP protection is available. Others choose to protect IP but file for such protection too late, while some avoid seeking protection because of cost concerns.
One common mistake is thinking that patents are the only IP that matters, which ignores the importance of copyrights, trademarks and trade secrets. Failing to protect all types of IP can have devastating effects on a company by leaving the door open for competitors and customers to access and copy vulnerable IP.
What mistakes do more established companies make when it comes to IP?
A common mistake more established companies make is mismanaging their IP. Protecting IP can be expensive. Therefore, an IP strategy needs to be developed with an understanding of how IP fits into an overall business strategy. A good strategy should at least consider which assets should be protected, the extent of the company’s investment in pursuing IP protection, and how IP can support the company in achieve its business goals.
More established companies often fail to perform an IP audit to check that all IP is being protected properly. A review of all existing products and those in development should be performed annually to ensure that all potential IP is being protected and valuable rights are secured. IP audits also help ensure the right IP is being protected. Many companies waste thousands of dollars protecting the wrong IP. Protecting products and assets that have little potential can negatively affect a company’s bottom line.
Along with having a strong IP strategy, it is important to understand competitors’ IP to avoid costly lawsuits and ensure up-and-coming projects have strong market potential. Not knowing the scope of your competitor’s IP protection could impede your own product development if you incorrectly assume it’s too close to something your competitor is developing, even when a lucrative opportunity exists.
How can companies avoid these mistakes and gain a better understanding of IP?
First, hire an IP attorney who has experience developing IP strategy and protection, ideally in the technology domain of the company. You want to find a lawyer who will work with your company and who understands your company’s business, strategy and plans for the future.
Include confidentiality and IP provisions in agreements with employees, contractors, suppliers and other parties. A premature public disclosure of a new product can negate future IP protection. In many cases, foreign patent rights are lost if an invention is publicly disclosed or offered for sale before a patent application is filed. Additionally, all employees, contractors, and other parties working close to your IP should be required to assign any and all IP to the company. It is important that non-employees include similar provisions assigning IP rights to the company.
Further, make sure your entire company is educated about IP. In most cases, only management and engineers understand IP protection. However, other groups of employees are also associated with the IP of a company, such as marketers, salespeople and technicians. Educating an entire company about IP can help ensure that IP rights are not lost because valuable IP isn’t identified, a public disclosure is made prematurely, or protection is filed too late to be effective.
Sean M. Weinman is an attorney at Fay Sharpe LLP. Reach him at (216) 363-9000 or [email protected].
Insights Legal Affairs is brought to you by Fay Sharpe LLP
