What is intellectual property, and why does it matter in business?
For better or worse, the internet age birthed into existence a wealth of new opportunities — all the good, bad, and downright criminal. Digital crime via the means of piracy, hacking and fraud is rife in the shadowy corners of the World Wide Web — but for businesses without cyber security knowledge, one digital threat lurks a little bit closer to home — and that’s the risk of intellectual property (IP) infringement.
This is because when we discuss IP, we aren’t just referring to literary and artistic works — in fact, IP can present a significant risk to business security even down to the level of online file storage, particularly in the case of spreadsheet documents. As Excel solutions firm EASA explains, this is because business spreadsheets “often contain proprietary information and business logic that must not fall into unauthorized hands or be modified by users of the spreadsheet.”
So, IP is everywhere — but why exactly is it important to businesses, and how can you make sure yours is protected? Let’s discuss.
What is intellectual property?
IP can refer to any of a range of assets created by the human imagination. In terms of business and commerce, this can include:
- Designs, logos and imagery
- Inventions and products
- Software, code and formulas
- Music, books and other media
- Names and brands
IP is generally protected by law, giving rights holders exclusive license over its use for a certain period. In practice, this means that the IP owner is the only entity that can adapt, display, perform and distribute a certain work. These laws are enshrined to protect the interests of creators and provide an incentive for commercial innovation.
Why is it so important?
No matter the size of your business, it’s vital that you protect your IP by securing and understanding your rights. This is because IP is one of the most important assets to your company, providing a source of competitive advantage that cannot necessarily be adopted by your competitors if you choose to protect it.
Business Lawyers from Butlers shed light on the importance of IP competitive advantage, explaining that “once you have your point of differentiation, you will have captured part of the market share and you will see a growth in revenue”. From here, they add, it’s vital to safeguard your unique selling point — by “protecting any unique products or services that differentiate your business from your competition.”
How can I protect my intellectual property?
As a business owner, there’s a good chance that you own some type of IP. If you’re unsure, however, an intellectual property audit can help you to uncover what assets you have ownership over, their prospective value, and any risks of infringement present that are unaccounted for.
There are four main types of rights that you can hold in order to secure your IP.
1. Patents
Technical inventions, novel products and manufacturing processes are typically protected by patents. This prevents other parties from non-consensually replicating or selling on the patent holder’s unique creations for their own benefit. Application for patents in the US is conducted via USPTO, and some require regular maintenance fee payments to support reissue.
Some of the most influential world inventions have been patent-protected, including the telephone, the computer, and the lightbulb.
2. Trade marks
Similar to the process for patent registration, application for trade mark protection in the US is also conducted via USPTO. While application doesn’t guarantee that the trade mark will register, it is the first step to gaining the necessary federal approval to protect a number of works. Trade marks initially last for ten years and require ongoing renewal. They are most commonly applied to distinctive products, brand names, logos or associated colors.
One famous trade mark example is the word “superhero”, registered by both Marvel and DC Comics. As a result of the filing, any other publisher attempting to use the word in titles, merchandise or promotional materials does so at their own peril — and could end up having to fight their case in court against the comic book giants.
3. Copyrights
Providing that they are a creator’s own original creation and can be expressed in some kind of material form, certain types of work are eligible for copyright registration. The length of the protection assigned will vary depending on the type of work and when and where it was created. Examples of IP in this category include:
- Writing and literary works
- Fine art and photography
- Music and other recordings
- Software and business logic
Copyright disputes are especially common in the music industry, and often result in lucrative payouts for artists that successfully claim their rights over certain lyrics, melodies, and rhythms.
4. Trade secrets
Internal company practices that are not public information may be considered trade secrets. In contrast to other types of IP, trade secrets are not registered publicly for safeguarding. Instead, businesses will implement internal measures such as non-disclosure agreements to protect the confidentiality of their practices.
KFC’s famed recipe of eleven herbs and spices has been called one of the world’s premier trade secrets, and while many have attempted, few have managed to successfully replicate the finger lickin’ formula.
