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“IP Checkup” Intellectual Property (IP) gets created in all kinds of ways. Necessity is the mother of invention, and employees are solving problems both at work and after hours. Inspiration strikes in the shower or on the golf course. One idea triggers another and a new business concept emerges. Intellectual Property is “intangible” – you can’t see it or touch it – so how do you protect it? The first step is to identify IP. Just as you would prepare a list of the physical assets of the business, prepare a list of the “IP” assets. This may include patents, invention disclosures, copyrights, trademarks, domain names, trade secrets, “know how” and business agreements. Identifying IP is an on-going process. Identifying new IP requires both an awareness and an infrastructure that supports the recognition and protection of IP. Training and regular reviews can help to reinforce the importance to the business of identifying and protecting new IP. The second step is to verify ownership. Are documents in place that establish ownership of IP? A common problem is that consultants or independent contractors are used to develop IP, such as software. If the consultants/contractors have not signed “work for hire” or “assignment of rights” agreements, the company does not own the copyright to the software even though it paid the consultants/contractors to develop it. Have copyrights and trademarks been registered? Copyright registrations can be confirmed with the Library of Congress, Copyright Office (www.loc.gov) and trademark registrations can be confirmed with the US Patent and Trademark office (www.uspto.gov). Ownership can be undermined by a lack of documentation and by granting rights to others. Has an exclusive license been granted? Has a security interest in the assets of the company been granted as collateral for a loan? The third step is to establish policies for the protection and use of IP. Requiring that standard form agreements be used with employees and contractors concerning confidentiality, non-disclosure, work for hire, assignment of inventions and copyright prevents many problems. Requiring a careful review of IP issues in all contracts is critical. For example, research and license agreements and joint venture/development agreements should specify ownership of IP. Distribution, co-marketing agreements, and reseller agreements should address IP. Are the rights transferable? In conclusion, establishing business practices to keep IP records in good order can protect your IP assets. Such business practices can serve you well should you seek investors or want to sell or license your IP. Your prospective business partner(s) will want to confirm through a process called “due diligence” that you actually own the IP. Jean D. Sifleet, Esq., CPA P.S. Do you know where your IP is? An outside prospective can be helpful in confirming that the documents and policies are in place to protect your IP. If you know someone who could benefit from an “IP checkup” please forward this enews to his/her attention. Thanks! eNews
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