Intellectual Property Law Basics for Business
Disclaimer: The following content wasn't created by, but is being shared by the Chamber Collaborative.
A basic understanding of intellectual property (“IP”) law issues is not just important for inventors and technology company executives. Understanding the types of common IP concerns that can arise in connection with your business will help you to protect your own IP rights and to avoid infringing the rights of others. Although even a short summary of IP law would be well beyond the scope of this brief legal tip, here are few highlights to help you with issue-spotting.
Copyright. Copyright law protects works of authorship fixed in a tangible medium, such as written works, photographic images, and audio recordings. If your business produces and distributes content, prepares written reports or similar deliverables, or just maintains a website, then you have important rights to protect. Similarly, if you hire an independent contractor to prepare copyrightable material for you or otherwise make use any content created by others, you will want to be sure that you obtain written assignments or licenses for all of the rights you need.
Trademarks. Trademarks are, most often, words, logos or slogans associated with a product (service marks are the corollary for services). Put as simply as possible, they are how a business identifies and protects its brands. Certain trademark rights can be acquired simply by using a given mark. Far broader (and more valuable) rights can be secured through registration with the United States Patent and Trademark Office. If you are starting a business that may offer its goods or services on a national or international basis, you may want to search to be sure that some other business is not already using an identical or similar mark.
Patents. A patent can protect a useful machine, process, manufacture, or composition of matter. Inventors of new and novel technologies are most likely to use patents to protect those inventions. That said, not all inventions can qualify for a patent and those that do may not necessarily be worth pursuing. Inventors who are starting businesses or raising funds based on patented or patentable technologies should work closely—and strategically—with both their IP and business lawyers early in the startup process.
Trade Secrets. Copyright, trademark and patent protection all involve some element of formal application and registration. By contrast, trade secret protection is obtained by taking steps to keep valuable information secret. A trade secret is any information that derives economic value from its secrecy, and that you have made reasonable efforts to keep secret. Trade secrets can include things like formulas, recipes, and customer lists. When business necessity requires you to share trade secrets with employees, consultants, or other third parties, well drafted nondisclosure agreements can be used to preserve the confidential nature of the information. This is particularly important when an employee departs a company. You cannot make employees forget a trade secret they have learned, but you can require them to keep it confidential even after they have moved on to new positions.
Intellectual property law issues have become increasingly interwoven into the framework of business contracts and commercial transactions. Although you need not be an expert, understanding the breadth of potential IP issues will help you determine what questions to ask of your legal and technology advisors.
[Businesses of all shapes and sizes have begun using podcasts to connect with their communities. That includes Sheehan Phinney. We have recently launched From the Market Square, a business law podcast where I interview entrepreneurs and community leaders from the Seacoast and beyond.] Listen to From the Market Square or on Apple Podcasts.
While the following information may include some general guidance, it is not intended as, nor is it a substitute for, legal advice.