How to keep your intellectual property safe while not infringing on others’ IP Featured

8:00pm EDT October 26, 2010

Nearly every company has intellectual property, but not every company knows how to protect it. But not protecting your IP, or being unaware of your competitors’ IP rights, will cost you both time and money.

“When done correctly, intellectual property can be a powerful advantage over would-be competitors in the marketplace,” says David Movius, co-chair of the Intellectual Property Practice Group and a member at McDonald Hopkins LLC.

“When it is not done right, you could be giving away secrets to your competitors without getting any real protection in return,” adds David Cupar, co-chair of the Intellectual Property Practice Group and a member at McDonald Hopkins LLC. “It is something you want to make sure you are doing correctly to maximize the value you are receiving and the advantage you have over the competition through intellectual property.”

Smart Business spoke with Movius and Cupar about how to protect your intellectual property rights and how to make sure you are not infringing on the rights of others.

What constitutes intellectual property?

When you have IP rights, whether it is patents, copyrights, trademarks or trade secrets, it means that, on some level, you have exclusive rights to what it covers. If you have a trademark on your company’s name, you have the right to exclude others from using that name so you can develop your brand. When you have a patent, you have the right to prevent others from using your invention.

Many businesses do not understand the real value of the assets that they already have, and that they can do even more to protect their businesses from their competitors. If you develop those rights, you gain specific advantages that you can exploit over your competitors.

Every company is looking for an advantage over their competitors, especially in this economy. But companies also need to be aware that their competition is doing the same thing. As a result, you also need to make sure that you are not infringing on someone else’s intellectual property rights. That is just as important as protecting your own intellectual property rights.

Why is it important to protect your IP rights?

Intellectual property can have a significant value to a company, especially when it is starting out. It is a classic situation where someone has a great idea and wants to build a business around it.

Once your idea has proven successful, you invite competition. People will see what your great idea is and try to copy it, so you need to build a fence around your idea through patent protection or trade secret protection. And as you develop a presence in the marketplace, you want to protect your brand, your company’s name, your logo and your packaging against other people trying to replicate that success or straight out copy it.

Once your company is successful and you want to take it to the next level in terms of raising capital, potential investors have an expectation of what you should be doing in terms of IP protection. They will ask whether you have sought and applied for patent protection and registered your trademarks, particularly for your products that are successful from a revenue generation standpoint. You need to do those things to put your best foot forward from a legal and business standpoint to maximize the value of your business.

It is never too late to get started, but it is always better to address issues early on. It is easier to do things right the first time than to try to clean up the mess after the fact. Strategic planning at the onset goes a long way.

How can you avoid infringing on other companies’ IP rights?

This is one area where having good legal counsel is particularly important. IP lawyers will search for existing patents and for public applications for patents not yet issued, as well as existing trademark rights, and then help your business make a decision based on that information. The attorney will assess the potential risk for introducing a new product to the market based on that search.

A good attorney will understand not only IP but also your business, your product line and the marketplace in your field. It is important to understand what IP rights your competitors have and the business practices among your competitors, and, based on all that, make good judgment calls, both from a legal IP standpoint, as well as a business standpoint.

There is so much information to analyze to reach decisions on these issues that most businesspeople need outside help. It is a time issue and a complexity issue, and the rules and regulations of preparing patent and trademark documents are very complicated, making it difficult for a business owner to do on his or her own.

How can you find the right attorney to help your business with its IP needs?

Identify what your business is trying to accomplish, and, based on that, ask potential attorneys what experience they have in this field. Ask how much it will cost, and what type of work constitutes quality work, versus what just sounds great but is not necessary. Ask what experience the attorney has in looking at intellectual property in the overall context of business and what the attorney can do to help fulfill the goals of the business. Does the attorney just obtain patents for the sake of obtaining patents, or can your legal counsel provide real value in how the IP property rights will benefit the business across the board? For example, are you are trying to raise capital or looking at the opportunity to not only sell your own product but perhaps license the technology to a third party?

Find an attorney who has an understanding across the board of the role that intellectual property can play in your business and how IP can help you grow.

David Movius is a co-chair of the Intellectual Property Practice Group and a member at McDonald Hopkins LLC. Reach him at (216) 430-2029 or

David Cupar is a co-chair of the Intellectual Property Practice Group and a member at McDonald Hopkins LLC. Reach him at (216) 430-2036 or