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How to Develop an IP Portfolio for Small Businesses

Whether your business sells goods, provides services, produces a mobile app, or whatever, you’ve already received a crash course in intellectual property: these are the things that make your business unique and special compared to others.

It could be in the form of a website and logo, an original blog post (like this one), or internal sales techniques that differentiate you in the marketplace. These things, and much more, are legally protectable and add value to your business. For entrepreneurs looking to eventually sell your business or attract investors, generating a diverse IP portfolio is one of the best investments you can make.

What Is Intellectual Property?

Intellectual property is generally broken down into four major categories: patents, copyrights, trademarks, and trade secrets. Patent law protects novel inventions, systems, and processes for a term of years. Copyright law protects original works of authorship such as books, music, software, mobile apps, and websites, among others. Trademarks indicate the origin of a product or service, such as a logo, bottle shape, or slogan. For instance, most businesses place their company logo on their products for branding purposes, i.e. to tell consumers who or where the product comes from.

The last category, on the other hand, must be kept secret to be legally protectable. Common examples of trade secrets are an internal training manual and a customer list, since they get their value from not being generally known. After all, if your competitors know who all your customers are, they will try to lure them away with lower prices and higher discounts. Similarly, if they know your product pricing structure, they can undercut your prices.

The first three categories above typically require governmental registration to protect, but that’s not always the case. For instance, the United States and most common law countries recognize a “poor man’s copyright” and a “poor man’s trademark.” This means that you can have rights in something created but not registered. (But beware: registering your copyright or trademark provides you with many more protections, as well as legal claims and defenses otherwise unavailable to you, including heightened damages awards for infringement.) However, there’s no comparable concept in patent law since, at a minimum, a patent must be publicly disclosed to be legally protected.

How Do I Build an IP Portfolio?

Here are some ways to build an IP portfolio for the benefit of your business and increase its value:

  • Register your logo, business name, and/or slogan with the U.S. Patent and Trademark Office (USPTO) so you can object to any attempted or actual infringements of your name or hard-earned reputation;
  • File patent applications with the USPTO for useful inventions, which will allow you to license the technology much more easily and at a premium;
  • Register any valuable works of authorship, such as books, music, software, guides, etc. with the U.S. Copyright Office, which allow you to reproduce and duplicate the work with much less difficulty, not to mention license and sell the work (this is especially important for app developers and SaaS companies); and
  • Hire a lawyer to draft and actively enforce noncompete/nondisclosure agreements between you and your employees, ensuring that they aren’t disclosing or otherwise divulging trade secrets to others.

So What Are My Next Steps?

You should speak with a lawyer before trying to undertake any of these options on your own. For instance, using LegalZoom or other web-based services could easily wind up costing you much more in the long run and for much less service. Making a mistake early in the process could easily put you in a position where you end up with little to no legal protection at all, such as a badly-drafted noncompete that doesn’t reflect current law.

Trust an experienced lawyer with your intellectual property so it’s protected right from the beginning. Don’t risk dollars to save pennies.

Looking to protect your intellectual property? Contact Stephen today for a free initial consultation.

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