Some entrepreneurs regard Intellectual Property Rights as irrelevant to what they are aiming to achieve, while others are overly mindful of IP rights, even to the point of treating them as an end in themselves.
Acquiring rights that a business doesn’t really need is an unnecessary expense that should definitely be avoided.
Every business does, however, need to think about IP rights when writing its business plan so as to decide on a clear IP strategy. That is the way to ensure that securing IP rights becomes a means to an end, rather than an end in itself.
One problem in achieving a sense of balance when deciding on the part IP rights should play in your business’ plans is the complexity of IP rights.
When a prominent, well-respected figure in the business community dismisses IP rights as too expensive to secure and too expensive to defend, as one did at an event I attended recently, you know there must be some fundamental misunderstanding at play. How can someone who promotes “intellectual property”, and helps business owners to identify and better exploit their intangible assets, marginalize the value of IP rights in this broad brush manner?
Specifically he advised service based businesses to ignore intellectual property protection and just publish.
Legally Branded Book
The fact is that the term “Intellectual property” has a specific meaning. It actually refers to a number of different rights: such as copyright, designs, patents, trade marks, trade secrets and so on. These may be called intangible assets, but that doesn’t mean that all intangible assets are “intellectual property”. Intangible assets such as the network of connections a business enjoys, are certainly valuable, but they are not “intellectual property” that the law protects. Intellectual property rights are a type of asset that may be transacted just like land. In the book, Intangible Capital, Mary Adams and Michael Oleksak suggest using the word “intangible capital” to describe all types of intangibles, including intellectual property rights.
In terms of the steep costs the speaker had in mind, he was probably thinking about patents. They can indeed be expensive to secure or litigate. However, there are all sorts of patents. Some of them may well be a waste of money, while others can be extremely valuable. Just consider the size of the deals struck in the recent assignments between AOL, Microsoft and Facebook.
Also, there is a very cost effective alternative to patents, and that is trade secrets. For example, Coca Cola decided not to patent its recipe 100 years ago, because it did not want to disclose its recipe. Instead the company opted to keep its recipe a trade secret, and continues to enjoy protection to this day. Had it filed a patent the recipe would have been available to competitors to freely use after its patent monopoly of 20 years had expired.
Most people are unaware of their options, particularly that confidentiality is what protects a patentable concept. That is why it’s important to learn about the rudiments of the law. I have written a book, Legally Branded, to address the confusion that clearly exists around intellectual property and other rights in the business world.
Most IP rights are never infringed
As for the expense of defending patents or any other IP rights, most IP rights are never litigated or defended, because most IP rights are never infringed. In fact, registering your rights is often the best way to avoid problems and costly litigation.
IP ownership is not unlike an insurance policy. You may regard the premium as a waste until something goes wrong. Then suddenly you realize how vital it was to secure ownership. Incidentally, that’s often when “do it yourself” registrations fail to stand up to scrutiny – a whole subject in itself which I explore in my book.
Ownership of intellectual property rights can offer enormous benefits if approached correctly, such as by making the right choices in the first place,on things like names. Otherwise, the protection you get is unlikely to be worth having.
Sometimes, the costs involved to preserve your rights, such as with trade secrets, or copyright is insignificant. But even if it is not a trivial expense, it can cost far more in lost opportunity, or disputes later on to put matters right if you don’t own the rights you need.
Good advice is essential, and it’s sometimes a matter of using the right form of wording in a contract, or taking the right actions, in order to preserve the value of your IP rights. the reason to bother with intellectual property rights, is that your business has assets giving you more freedom, more customers, and more opportunities.
This is all discussed in greater depth in my book.
Securing IP rights, such as trade marks, is something that is relevant to most businesses because trade marks are the principal way to protect your business against unfair competition. Disregarding trade marks by choosing legally ineffective or weak names, or failing to register a name, is to miss out on valuable protection which the law provides against theft by copyists.
Trade marks are also a fundamental way to preserve the unique value you generate from publishing your ideas. For example, when I chose the title of my book, I took care to choose a name that I could register as a trade mark. This means if my book is a success, my competitors won’t be able to jump on the bandwagon with their own books using the same title or similar titles to mine. Legal advice can also help authors to understand how copyright laws protect their content, so they can make informed decisions about how much detail to share about a methodology or process.
The internet is not everything
Some entrepreneurs tell me it doesn’t matter that they have a non distinctive name they can’t trade mark because they dominate Google in their niche. My response to that is beware of being too reliant on any one medium in business or in life. The internet is changing constantly, and may well look quite different in 3 years’ time. Competitors could also aim to dominate the internet in your niche. And social media is changing the rules, and new Global Top Level Domain (GTLDs) are set to be introduced which are bound to change the internet landscape.
Nothing beats having a distinctive trade markable name for protecting the benefits of your hard won success. A good trade mark would make it possible to stop others free riding on your success, such as by registering similar domain names, and passing off. It’s the only way to compete whether on the search engines, using adwords, emails or other means of promotion. Otherwise, you will lose some of your hard won goodwill, and will be less effective in fending off unfair competition.
I’m hoping that once business owners read my book, they will get a better understanding of the importance of IP. By structuring a business correctly, it’s possible to take maximum advantage of the benefits that IP offers to create a successful business from your ideas.