It may be the people who make the business, but there’s typically no monetizable product without some sort of innovation or intellectual property (IP). The problem is that only a handful of businesses understand the importance of IP management and protection. Are you up to speed?
Why Does IP Matter?
“Intellectual property comes in the form of patents, copyrights, trademarks, and trade secrets. It may be found in many areas of your business, from your products and services to your employment agreements and marketing campaigns,” attorney Robert Klinck explains. “As your business grows, the importance of certain IP assets may shift, and developing a strategy on how to identify, protect, and manage your IP will benefit your business in the long-term.”
While protecting IP obviously matters for legal reasons, the value of an effective IP management plan goes far beyond simple infringement issues. Valuable IP can be used as collateral for loans in financing situations and can even be sold on a royalty basis to infuse cash into a struggling organization.
From the public side of things, trademarks help brands foster and manage healthy relationships with customers and build brand equity. IP also gives investors confidence that their investments are protected against the competition.
“Intellectual property is essentially a tool to gain a competitive advantage in the marketplace,” Klinck continues. “When effectively identified, protected, and managed, IP can be used to keep competitors and infringers at bay, develop a customer base, gain confidence among investors, and open up funding opportunities.”
3 Things You Can Do to Enhance Protection
The benefits of an effective IP management strategy are clear, but how do you put this into practice? Every organization has unique needs, but the following tips will go a long way in helping you transform your company’s approach to IP protection.
- Create a Policy
In your IP policy, you should clearly discuss who owns the IP, who can use it, how the funds received from the sale of IP will be distributed, and how issues and disputes will be resolved. It’s much better to be thorough and say too much than to say too little.
- Get Serious About Contracts
It’s easy to become comfortable and forget to sign protection agreements before letting people near your IP. After all, you don’t want to offend people or make them feel like you don’t trust them. But the reality is that you can’t trust anyone these days. Money can make people do strange things and you need everything in writing.
All employees, founders, and third-party providers that directly interact with your company should be required to sign IP-assignment agreements. This agreement – which may look something like this – assigns the IP in question to the company. This prevents any individuals from claiming the rights to the IP in an attempt to leverage it for personal gain down the road.
Non-disclosure agreements are also important and should be signed by anyone who has access to confidential information (including all founders and employees). You should consult with a business attorney to draw up a comprehensive agreement.
- Record as Much Information as Possible
For starters, record all evidence associated with the development of the IP. For example, you should save dated and signed copies of drawings, notes, email conversations, and any other forms of communication. Documents that are digitally time-stamped are best. This will help if someone else ever tries to claim that you stole their idea.
It’s also important that you record information about who comes into contact with your IP. Even if someone has signed an IP-assignment agreement and/or non-disclosure agreement, you should carefully record the dates and times when they interact with your IP. Also, make a note of how much information they have access to.
While it may seem like overkill, having this sort of information recorded will help you tremendously should you ever find yourself in a legal battle over IP. As they say, it’s better to be safe than sorry.
Take Your IP Seriously
Your company’s IP is too valuable to leave unprotected. It’s one of the more valuable assets your business owns and you need to make it a priority as you move forward. Take your IP seriously – or don’t be surprised when you have to work through some serious problems.
Currently, Larry writes for Entrepreneur, Social Media Week, CEOWORLD Magazine and the HuffingtonPost among others.