One of the burning questions entrepreneurs have when starting their first company is whether or not they should file for intellectual property right from the beginning. How complicated is it and can I just tackle that later?
Before we jump right into answering your question, let’s take some time to understand what intellectual property, or IP as it’s commonly known, is and how we can protect it. Then we’ll answer the question of how important it is to do so.
What is intellectual property?
If nature has made any one thing less susceptible than all others of exclusive property, it is the action of the thinking power called an idea, which an individual may exclusively possess as long as he keeps it to himself; but the moment it is divulged, it forces itself into the possession of every one, and the receiver cannot dispossess himself of it.
Those words were penned by Thomas Jefferson in a letter to Isaac McPherson on 13 August 1813. Clearly, the subject of intellectual property rights is not, by any means, a new notion. While the first records of protection are patents and copyrights from England in the 1600s, proper protection of ideas on a national level, granted by the U.S. Constitution, set the stage for what became the world standard on intellectual property rights.
In this day and age, intellectual property refers to creations of the mind. So things like inventions, literary and artistic works, symbols, names, images and designs used in commerce are all examples of intellectual property that can be protected. Just to be clear though, an idea, while it is intellectual property per se, can’t be protected. So if I were to come up with the next best to-do app, I can’t go out and protect the idea thereby preventing others from making a to-do app. But I can protect any branding I develop in relation to the app, any innovative processes related to how I measure tasks and so on.
Intellectual property rights are an important part of the modern society we live in and help foster innovation, without any fear that all our hard work will be in vain because someone else might copy it. But intellectual property rights aren’t perfect – in fact, there are many drawbacks to the system. For one, the rights granted aren’t uniform across nations nor are the policies that enforce violations. Organizations exist, like the World Intellectual Property Organization (WIPO) that try to bridge this gap, but we still see counterfeit luxury items being produced by the millions in countries like China and software piracy online continues unfettered across the world today. Critics of intellectual property rights also say that it does more harm than good, when drug manufacturers hold back drug recipes that could benefit millions, or when Apple wins patent wars that hinder smartphone technological advancements.
Regardless, intellectual property rights are a very useful tool that when used properly can protect your hard work and legacy.
Ways to protect IP
While the extent to which intellectual property rights are granted and their duration and terms vary across countries, the instruments that we use are similar throughout.
The tools we use to protect intellectual property rights can be divided into two categories. First, we have industrial property, which includes patents, trademarks, industrial designs, trade secrets and many more. The other is copyright, which includes all literary and artistic work. This defines a broad category of work and covers things like novels, poems, films, plays and even musical works, paintings, photographs and architectural designs.
There are more tools, like database rights in the EU, fashion law in relation to branding rights, plant breeders’ rights and so on but we’re going to focus on some of the more common ones that are relevant to us.
While specifics differ from country to country, in general, a patent is an intellectual property right granted to an inventor to “exclude others from making, using, offering for sale, or selling the invention” for a limited time in exchange for public disclosure of the invention when the patent is granted. There are different kinds of patents protecting differing kinds of intellectual property – utility patents for inventors who basically create something new, design patterns for those who invent a new design for any article of manufacture and even plant patents.
When you apply for a patent, you will have to state why your invention is unique, and if you are granted the patent, it will last you 20 years.
A trademark is a tool used to protect brand names and its usage. In this case a brand name can refer to any word, name, or symbol that identifies and distinguishes that particular organization from another. A trademark gives you exclusive right to use the mark in connection with the goods and services you list in your registration. What that last statement means is that Apple can trademark and protect the use of the word apple in relation to computers, tablets, phones and media devices as well as it’s other services, but the trademark doesn’t apply when talking about the fruit.
A copyright gives the holder the right ownership of any original works produced including literary, dramatic, musical, artistic and certain other intellectual work, including code. A copyright owner has the exclusive right to reproduce, distribute or make derivatives of their work.
Copyrights last a lot longer than patents – copyright protection lasts the life of the author plus another 70 years. So fear not, you can profit from your work for a long time.
Unlike patents and trademarks you don’t have to file for a copyright explicitly. The moment you have your work in a tangible, written form, it has copyright protection, assuming it is an original work.
Why should I bother?
Well that was obviously a lot of information, why should you care? In the past, intellectual property was an afterthought for companies – something that your lawyers handled while you focused on the business and sales. Not so anymore.
Increasingly, companies that are good at managing IP will win. The ones that aren’t will lose. (HBR, Jan 2000)
So here’s the answer to your question – should you file for intellectual property rights? Absolutely yes. Intellectual property rights give you, as a business, immense advantage over your competitors if handled correctly.
Patents last several years and this gives you time to develop your invention even further – make improvements, add new features, and analyze the success of your idea. You have a head start before people can imitate your idea.
Patents don’t just provide you with protection, they also allow you to license or sell your idea for extra profit.
If you don’t think this applies very much to you as a web individual take a look at this patent held by Kevin Rose pertaining to content visualization on a website.
When I say Coca-Cola, McDonalds, Apple, or Louis Vuitton, you don’t have to stop and ask me which Coca-Cola I mean, or what company is associated with that LV symbol or half-eaten apple logo – you clearly know what I’m talking about. Trademarks allow you to build a strong brand and protect that name right from the start.
Here’s an example of a company that used a name that had previously been trademarked. While both companies are well intentioned and mean each other no harm, using the same name would cause confusion for customers and a put the original company’s reputation at stake. Without a trademark, the original company would have no choice but to let the newer company use their name.
But everything costs money. It costs money to file and maintain patents, and time to research and audit the intellectual property to stay on top of your competition. So while you should look into acquiring the right protection for your intellectual property, you shouldn’t just file for everything. What you need is an intellectual property strategy.
Forming a sound IP Strategy
Your IP property should be an asset that let’s you accomplish your business goals, not an end goal in itself. Don’t file patents just so you can engage in patent warfare. But how do you form an IP strategy that is aligned with your business goals?
Understand your business goals
As obvious as that sounds, you need to understand what your business goals are.How important is a certain technology or innovation to the commercial success of your company? What is the IP landscape in your industry and what competitive edge does your technology or process confer in the marketplace? What IP assets does your company possess? This could include all potential trademarks, patents, trade secrets, copyright content as so on.
Evaluate your IP in relation to those goals
Once you understand your business goals, evaluate your IP in light of them. Of those IP assets, which are crucial in achieving commercial success? Which IP supports your most profitable products? Once you understand which IP assets are more important than others, you can devote time and effort to securing those.
Develop your IP strategy
Now you can focus on developing your IP strategy. The complexity of the strategy depends on a number of factors, but a good rule of thumb is to let your company size guide you. If you’re just starting out, there’s no need to have publication policies or ownership rights. You should also look into what are the geographical implications of securing IP rights. Do you need to secure IP from a global perspective?
So in conclusion, yes, you need to file for intellectual property rights, but, no, you don’t need to file everything. Make smart decisions as always, and figure out ways to minimize your costs and secure those assets that are crucial to the commercial success of your company.