| Imitation is supposed to be flattering.
But, once you've invested time and money to develop a name,
brand image, business methods or other 'intellectual property',
you don't want someone else copying and 'cashing in' on
your hard work.
Take steps to protect against Copy Cats, by:
- Using smart business practices, and
- Taking advantage of legal protections.
Business Practices
Secrecy is the most basic
way to protect your work from being copied. 'Trade Secrets'
are legally recognized as long as you take careful steps
to keep the secret. Secrecy works in some circumstances,
such as the formula for Coca-Cola.
For many businesses, secrecy is not a workable option.
So, it's a good idea to adopt smart business practices
such as:
- Mark 'Company Confidential' on important documents (e.g.,
specs, customer lists, manuals, etc.)
- Have employees sign confidentiality and non-compete
agreements (see eNews re non-compete agreements).
- Require suppliers or vendors to sign confidentiality
agreements.
- Require independent contractors to sign agreements that
say 'work for hire' and assign rights in work product.
Legal
Also consider other protections provided by law: Patent, Trademark
and Copyright.
Patent
The government grants exclusive rights for
20 years in exchange for complete disclosure or description
of the invention. This means that you can stop others from
making, using or selling products or technology that use
the invention. Or, you can 'license' (grant rights to use)
the patent for royalties.
The scope of what is patentable has expanded greatly
in recent years and includes business methods and processes
as well as more traditional 'inventions.'
If your idea is 'novel and unobvious,' it could be patentable.
To protect your idea:
- File a provisional patent.
This establishes a first filing date in the event that
someone later claims they had the idea first. Provisional
patents are much simpler than a full patent. You can
then say 'patent pending.' You then have 12 months to
file for the real patent.
- Use non-disclosure agreements.
Non-disclosure agreements (so called 'NDAs') essentially provide
that no use will be made of the information disclosed, without
your agreement.
It's good practice to use NDAs as a standard business practice
when you're discussing your idea with anyone capable of copying
it.
In reality, NDAs can inhibit discussions with investors and
potential partners. Some investors/partners simply refuse
to sign NDAs because they never know what opportunity will
come through the door next and don't want to worry about the
possibility of a claim.
Disclosing your idea is important to get help with commercializing
your idea. To get feedback, you have to convince people that
you have something unique and marketable.
So the dilemma is how to disclose and also protect your idea
from Copy Cats. Disclosure under NDA is preferable. The
risk of disclosure without NDA should be carefully considered.
Trademark
Protects any word, name, symbol, sound or combination used
to identify your goods or services and distinguish them from
the goods or services of other (e.g., 'Xerox' is a trademark
and 'Greyhound' is a service mark for transportation services).
While registration is not required to establish rights,
there are significant benefits to registration. The owner
of the registered trademark (for products) or service mark
(for services) is PRESUMED to be the owner and entitled
to use the mark. (See prior eNews re Selecting & Protecting
Your Name).
Copyright
Copyright protects original works of authorship, including
artistic or literary work (from music and poetry to movies
and computer software), for the life of the creator plus 70
years.
As with Trademarks, registration is not required to establish
rights. However, registration is required to gain full enforcement
of your rights.
The US Patent and Trademark Offices Web site at www.uspto.gov
provides extensive information about procedures, regulations
and fees.
In conclusion, it's important to take steps to protect your
'rights' in the intellectual property of your business. You
don't want employees to walk out with your customer information
or confidential information and start a competing business.
Nor do you want your competitors copying your name or your
products/processes.
Minimize your risk with good business practices and take
advantage of legal protections.
Jean D. Sifleet
Attorney & CPA
P.S. In the next eNews, we'll discuss licensing your
'rights' to others for royalties.
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