Intellectual Property Primer
Published December 11, 2007

Photo by: iStockphoto

Your brand is more than clever creative. It's your livelihood. Protect and preserve it with patents, trademarks and copyrights.

By: MATT ALDERTON

A company's most valuable property, most experts agree, is also its least tangible. It's not office space, personal computers or people, but rather words, pictures and ideas. It's its name, its logo, its inventions and its information—everything that a business keeps in its head instead of its hands—and it's priceless.

Just ask Jen Groover, founder and CEO of Jen Groover Productions. A Philadelphia-based entrepreneur and inventor, she conceived her first product—a multimillion dollar line of handbags with organizational compartments known as Butler Bags—in November 2004 and has since applied for more than 15 patents and more than 20 trademarks. Once a novice, she's now a bona fide expert in what the law calls "intellectual property."

"Intellectual property is really important in the beginning to establish your company and to create instant value in it," Groover says. For her, intellectual property was more a strategic move than a legal one. Sure, she filed patents and trademarks to protect the integrity of her new handbags, but her chief motivation was and continues to be brand building.

"It's not just about launching with a unique product," Groover says. "It's about getting your story out there. It's positioning yourself as the first, the best and the leading. It's branding and branding and branding. It's creating tags on your products or putting inserts in your packaging telling the story of how you created the product so that your customers become viral marketers for you. Then, all your competitors become knock-offs."

Indeed, while having patents and trademarks gave Groover protection, it also gave her persuasive promotional fuel. "What it did for me is it carved out a market space when I launched, saying, 'This product is unique; it's different.' Store owners felt they had something new and special to sell to their customers and the media felt it had something unique to write about."

Staking Your Claims

For Butler Bags, intellectual property protection translated into legitimacy and newsworthiness in the marketplace. For many small businesses, however, intellectual property is simply about marking their territory. Like dogs on a lawn, entrepreneurs have a gut instinct that pushes them to lay claim to their personal and professional property, particularly their winning ideas.

When they use it, that instinct serves small business owners well, according to intellectual property attorney David Oberdick, head of the Intellectual Property Practice Group at Meyer, Unkovic & Scott, a Pittsburgh-based law firm. The trouble is, not many of them do.

"Intellectual property is related to intangible property rights—rights in things that you can't touch or feel, but which still have value," Oberdick says. For that reason, intellectual property rights can often be confusing, which intimidates many entrepreneurs out of claiming them.

Faced with trying to understand what they can and can't protect, or being blissfully ignorant, many choose the latter. Unfortunately, when they do, they leave their brand open to theft and misappropriation. The worst part: If the thief decides to legally claim what you did not, he can bring suit against you in order to stop you from using what's rightfully yours, crippling your business both financially and strategically.

Even more important than the consequences of not filing for intellectual property rights are the benefits of doing so, according to Oberdick. For even the smallest business, minimal intellectual property protection can create both a competitive edge, as it did for Groover, and a source of extra income. It entitles you to ownership of your work and gives you all the just-in-case permission you need in order to confidently manage and grow your business. "You should at least consider trademark protection so that others don't trade on your name and goodwill," Oberdick says.

Other options include patent protection, for companies involved in research and development; copyright protection, for companies that produce creative work; and trade secret protection, for companies that thrive on confidential business information.

Choose Your Weapon

Not sure where your property fits in on the intellectual property scale? Following are more detailed descriptions of your options and next steps.

• Patents: Patent laws provide federal protection of intellectual creations, namely inventions. While the patent application is extremely detailed and rigorous, according to Oberdick, not to mention expensive—while it can cost as little as $4,000 to file a patent for a relatively simple invention, it can cost upwards of $25,000 to file one for a complicated invention—the time, effort and money is worth it for companies that have money-making ideas.

"You don't have to patent everything, though," Groover is quick to point out. Because filing for a patent is so time- and capital-intensive, she suggests really planning and analyzing your branding strategy before deciding if a new product is patent-worthy. If you come to the conclusion that it is, make sure it's an original idea by searching the U.S. Patent and Trademark Office (USPTO) database. Next, choose a patent agent or attorney. Finally, get to work filing your official patent application.

• Trademarks: Trademark laws protect brand names, logos, designs, slogans and sounds—anything related to the name of a product, service or company. "Trademark is the broad term used in connection with names associated with products and services," Oberdick says. "Marks are protected to prevent competitors from using them to confuse and mislead your customers."

Marks include both trademarks (TM), used most often for products, and service marks (SM), used specifically for service identification. While "TM" and "SM" can be used legally without registration, according to Oberdick, registration—at the state or federal level—gives you the right to use a registered "R" mark with your name and proves ownership rights without a doubt.

In order for something to be trademarked, it must be unique and in active use; you can't trademark your name if someone else in your industry is using it or if you don't intend to use the name in marketing your business to customers. To find out if your name, logo or slogan is available, search the USPTO's free Trademark Electronic Search System. If it's available, you can file a federal trademark application for just a few hundred dollars.

• Copyrights: Copyright law protects original works by authors, composers, artists and computer programmers. If you're in the business of writing content or creating software, then, you should consider registering for copyrights, which cost just $45 apiece and apply to books, music, speeches, magazines, newspapers, songs, art, films, software and even websites.

In a world where media is increasingly shared online, it's not a bad idea to lay claim to your creative work, according to Oberdick. Doing so gives you the sole right to copy, distribute and profit from it. "Copyrights are technically recognized without filing an application," he says, "but they can only be enforced in federal court after an application has been filed. Given the small application cost, it's a worthwhile filing." To register a copyright, visit the U.S. Copyright Office.

• Trade Secrets: While patents, trademarks and copyrights are all public protections, many businesses want to protect private information, including recipes, formulas, processes and methods. Trade secret law makes it possible for them to do so.

Rather than protecting your trade secrets with official government filings, you need only keep them private via the use carefully considered legal documents. "Business and customer information can be protected contractually," Oberdick says, "through non-disclosure agreements and, with employees and contractors, through non-compete agreements."