Intellectual property (IP) can be a complex topic and covers a lot of concepts – and it’s not just registered patents, copyrights and trademarks that need protection. Too often businesses don’t take a few preliminary steps to adequately protect important “trade secrets” and other intellectual property rights.
Here’s my top five for protecting ideas and avoiding costly problems:
1. Get a Confidentiality-Non-Disclosure Agreement (NDA) signed before you share anything. A signed NDA with all players should always be the first step in a prospective new business relationship. No business should share information with another entity or individual involving confidential or proprietary business information, methods, ideas (registered or not), formulas, trade secrets, know-how, technology, personnel and employee information, pricing formulas, sales or marketing information without the benefit of an NDA in place. Start our right – invest in a well-written NDA.
2. If go forward with a business relationship, be sure to include adequate protections and remedies against misuse of any confidential, proprietary information or IP rights, including provisions for recovery of damages, attorney’s fees and injunctions in all your contracts.
3. Employees, Vendors and NDAs. In many situations signing an NDA during the pre-hiring or hiring process is an extremely good idea if employees (sub-contractors or other vendors) may have access to confidential information. If employees, vendors or others will be directly or indirectly involved in developing any intellectual property, additional agreements relinquishing rights to ideas or processes developed will go a long way to avoiding costly disputes.
4. Don’t rely on your incorporation to protect your trade-name. And do an adequate search first. Companies often go to great lengths to distinguish themselves from competitors with identifying logos and marks. The last thing a business needs is to spend the resources, financial and otherwise, to develop something close to or directly infringing on another company’s marks – only to have them shut you down by successfully prosecuting an infringement claim. When searching online state, federal and international registries, it’s really important to keep in mind that these registries are just that – registries only that do not include any common law or “unregistered” marks that may be in use by others. A search should be broad enough to cover registered and unregistered marks. A properly registered mark puts the world on notice that the mark is protected and who the rightful owner is. There are a surprising number of businesses that have never registered their marks – many are older or smaller businesses. And while they do enjoy “common law” protection for what they’re using, proving ownership in the absence of a registration is, frankly, very expensive. If the common law owner prevails (and they often do) would you be prepared to start all over and continue the business with an entirely new logo and marketing plan? Register your trademarks and logos to protect your assets. Do a search before using any logos, trade names, trademarks or service marks so you don’t invite problems.
5. Be vigilant in protecting what’s yours. There are very few businesses without IP rights to protect. For those with registered patents, copyrights and trademark, keep an up-to-date inventory with all expiration dates and actively “monitor” whether others may be infringing. For those without formal registration protections, the same lesson holds true. It’s critically important to inventory and monitor what’s yours. Safeguard your valuable ideas – infringement claims are costly. Don’t make it easy for others to steal your ideas. Registering and monitoring marks is a smart move.