5.0 Intellectual Prop.

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5.0 PROTECTING YOUR INTELLECTUAL PROPERTY

The Coca-Cola® can.  It’s a great example of the different forms of intellectual property that we’ll be discussing in Lesson 5.1.

5.1  What are the different forms of intellectual property and how do you protect them?

Intellectual property applies to what comes out of your mind.  Personal property is the wallet in my bag or the jewelry on my hands; real property has to do with land and buildings, and intellectual property is the property of your intellect.  Depending on what comes out of your mind and the form in which it comes out, that will determine how you can protect it.

Copyright: The first thing you’ll see on the can is the text.  Text is usually covered under, and protected by copyright.  In your business, you may write articles or blog posts, take photographs, or create designs.  Usually the person who owns the copyright is the person who created it.  To get the fullest protection from copyright, you’ll want to file a copy of your work with the U.S. Copyright Office.  You can find out more about the process at the U.S. Copyright Office’s website, at www.copyright.gov.

Trademark: Trademark is literally the ‘mark you are using in trade’ – in commerce.  What’s being associated with your business by the rest of the public.  It can be something graphic, it can be a tagline, a name, or a symbol.  Coca-Cola® trademarked the distinctive script of the word “Coca-Cola” as well as the tagline “It’s the real thing”.  The company wants to protect both because anytime somebody says, “it’s the real thing” or sees the special script, the company wants you to think of a Coke.  You can register trademarks with the U.S. Patent and Trademark Office.  www.uspto.gov.

However, trademarks can get expensive and take a long time to be registered.  In addition, if you try to file for a trademark that someone else is using – even if the mark is similar and not identical – your application may be rejected.  Best to work with an intellectual property attorney to do the right database searches beforehand.  Otherwise, you could pump thousands of dollars into a new marketing campaign for your brand, only to get a nasty lawyers’ letter telling you to “cease & desist” from using the mark, or you’ll be sued.

Trade Dress: The red can with the white lettering is very distinctive.  Similar to a trademark, it’s called trade dress.  It’s another way that companies try to extend their branding.  Not just a quick visual, as in the logo, but in the packaging as well.  Look at how the red and white is used on the Coca-Cola website.  www.cocacola.com.  Tiffany & Co. has extended their brand onto their website at www.Tiffany.com.

Trade Secret: You see the ingredients listed, but you have no idea of the recipe.  This is Coca-Cola’s trade secret.  It’s the “special sauce” of the company – and if divulged – could mean the loss of millions of dollars of revenue.  Coca-Cola protects the trade secret by keeping it under lock and key – making sure that only those with a need to know are informed.  That’s where confidentiality agreements come into play, as we’ll discuss in Lesson 5.4.

Patent: The right conferred by the patent grant is, “the right to exclude others from making, using, offering for sale, or selling” the invention in the United States or “importing” the invention into the United States. What is granted is not the right to make, use, offer for sale, sell or import, but the right to exclude others from making, using, offering for sale, selling or importing the invention.

5.2  In what kinds of scenarios could your IP run into trouble?

There is always the potential that your intellectual property will come into the hands of others . . . and possibly be misused, or not properly attributed to you.

• Vendors and employees.  If you hire anyone to develop creative work for you – such as a logo, a marketing campaign, website, or to do ghostwriting – realize that under copyright law, you are not necessarily the owner of the work.  Even though you paid for it.  As mentioned in Lesson 5.1, the copyright right belongs to the person who created the work.  You didn’t create it – you hired someone to create it.  That’s why your agreements need to contain a “work for hire” provision.  This ensures that the vendor who’s creating the work is not only giving you the work itself, but all of the rights to it.  Those include the rights to copy it, distribute, or even make changes to it.
• Copyright Infringement/Online:  So many people think that because a work is online, it’s free.  Not so.  If you didn’t create it and put it on the Internet, it’s not yours to take without permission.  Whether it’s on the Internet or not.  Similarly, others should seek your permission if they want to copy wholesale, say an article you’ve written.
• Trademark Monitoring:  It’s not just enough to file and register a trademark.  You have to protect it.  This means you have to monitor who else might be using your mark – or who might be filing for a confusingly similar mark.  If you don’t protect it, or don’t renew the registration, you could lose the mark – or at least your rights to claim it as exclusively yours.

5.3  Why are “restrictive covenants” important?

What are restrictive covenants?

Restrictive covenants are clauses in a contract that either require you to do something, or agree to refrain from taking certain actions.

• Confidentiality/non-disclosure: A confidentiality agreement is a perfect example of a restrictive covenant.  In the contract, the recipient of your confidential information agrees that it will affirmatively keep the information confidential, and refrain from disclosing it to others.
• Non-solicitation (of clients): This is a non-poach clause.  Keep your hands off my employees and my clients!  If you have a business partner who leaves the company, you certainly don’t want him stealing your clients out from under you.  Same goes for employees who leave your company.  Training an employee to do their job well is one thing – training them to become your next competitor is quite another!
• Non-solicitation (of employees): You don’t want business partners, clients, or vendors cherry-picking your valuable employees – whom I might add, you’ve spent a great deal of time and expense training.

5.4   When do you need confidentiality and non-disclosure agreements?

When you need to keep secrets:  The secrets may be in your company information, or in company information that a client provides to you.  Either way, you want them identified as confidential, requiring special care, and you want promises that they will not be disclosed.  Otherwise, if these secrets are exposed without permission, you can find yourself in hot water.

Situations where you don’t want information exposed:

• You use an independent graphic artist to help design a client’s annual report and provider her with sensitive client information
• You don’t want an employee tweeting about a client product launch before its time
• You want to avoid having employees blogging about a company takeover
• You’re sharing crucial market research with a strategic partner, but don’t want it to use the information for any purpose outside your partnership
• You hired a broker or finder for a business opportunity and don’t want your company information shared for an unauthorized purpose
• You’ve taken on a business partner and don’t want her to misuse company information after she retires (or resigns)
• You’re trying to attract an investor, but will need to disclose your detailed business plans and financial projections.

5.5  What legal issues may affect you on the Internet?

Many of the issues that can affect you offline affect you and your company online.

• Copyright infringement.  Now it’s easy as pie to copy huge swaths of other people’s work from the Internet and pass it off as our own.  That’s not legal – and your employees need to be made aware of that.
• Privacy policies.  If you’re doing business online and capturing people’s email addresses and credit card information, you need to ensure that you have the safeguards in place for keeping that information private and disclose what you intend to do with the information.  You have to have yours.  If you’re in California selling t-shirts online to someone in Massachusetts, there’s an open question about whether your state’s law or your customer’s state law will apply.  So you want to be sure that they are drafted well and in compliance with the law as it is changing.
• Defamation and libel. Trash talk can seriously boomerang on you.  If you’re digging up negative mis-information about a competitor and then tweeting it around town, you could be held liable for defamation.  Especially if you’re talking about their business reputation.
• Employee abuses. Social media and the Internet offer 1,001 ways that your employees can squander valuable company time – or worse, easily (and unwittingly) destroy your business or a client’s.

o  Have an employee policy on computer use that specifically addresses Web 2.0

o Let your employees know your position on blogging and what will be deemed acceptable – whether for personal or company blogs.

o If you have a company blog, consider allowing only specific or senior employees to actively participate on the company blog.

ACTION ITEMS: Complete the Action Items in your Action Guide.

START protecting your Intellectual Property by doing the following:

1) Add TM to every unique logo, symbol, tagline, phrase, etc that is related to your business. By adding TM you are telling others that something is a trademark of your business and cannot be used without your permission.

2) Start the process of registering your trademarks with the US Patent and Trademark Office www.USPTO.gov to obtain the ® for your logos, etc. Contact an IP lawyer or use an online service such as www.legalzoom.com for help.

3) Add a copyright notice to everything your company produces such as web pages, images, documents, music, video, art work, designs, etc. All you need to do is add “copyright” or the © along with the year and the company’s name or the name of the creator. For example USCFE would add “© 2011 USCFE” to anything it creates.

4) Review “for hire” contract carefully to ensure that you or your company will obtain the rights to something created by a contracted or employed worker such as a web page, logo, etc.

5) Consider filing your copyright material with the Library of Congress via the US Copyright Office.

6) Look into “provisional patents” for inventions you hope to incorporate into your business. Patents can be expensive, so getting a provisional patent will give you 12 months time before you must file the patent to get the capital or revenue needed.

7) Craft non-disclosure agreements and non-compete agreements for everyone you work with including employees, management, and contracted workers. Have a lawyer assist you in this matter. Yes, you might find an NDA on the web, but again it is better to spend the money now and avoid issues later that might hurt your business down the road.

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