Implementing an Intellectual Property Protection Program

Developing an intellectual property protection strategy is a must for business ventures of all sizes. Although such a strategy probably is more elaborate for a major corporation than for a small business, these recommendations apply to all commercial and professional enterprises, regardless

of size. Taking stock of your intellectual property (IP) assets and mapping out a strategy for protecting those assets, are the essential part of an effective IP acquisition and protection program.

Taking stock of your IP assets

Begin implementing an IP protection program by taking an inventory of the intellectual property you already have. Begin with the following steps:

1. Identify all the innovations in products or manufacturing methods that you and your associates or employees developed during the last couple of years — older technology has already fallen in the public domain.

This gives you a list of all your assets that may benefit by patent or trade-secret protection.

2. Gather all the software, instructional manuals, or promotional literature developed or published under your direction or authority for the last five or six years — which is the grace period you have to go after copycats.

These items are good candidates for copyrights.

3. Look at all your commercial names and logos, including business identities and product brands.

This itemizes all your assets that should be protected by a registered mark.

After you gather this information, you have at your fingertips an inventory of the IP assets that you can protect with a variety of IP rights.

But, before investing in protecting what you already have or acquiring more IP assets, you need to make sure that your assets are the best they can be. You can always improve inventions and processes, and you can often boost the marketing and legal strengths of commercial names with some adjustments and selective use. Likewise, before investing your hard-earned cash in acquiring IP asset protection, make sure your widgets, assembly lines, and logos are in the best shape possible. Copyrightable material — such as manuals, books, graphics, and computer programs — are the exception here. Copyrights attach as soon as the work is put on paper (or saved to disk). Nevertheless, make sure you revise and update these documents to include any improvements you've made to the assets they represent.

Identifying trade secrets

After taking stock of your IP assets, you need to define and apply a trade-secret protocol. Although you may think that you don't have any trade secrets because you and your staff are always open, candid, trusting, and trustworthy, you may have information that isn't readily available to the public that gives your company a competitive edge. Good for you!

How would you feel if one of your former associates jumped ship, hooked up with your closest competitor, and started soliciting your largest customers? What if someone revealed the identity of your supplier of a hard-to-find component, the parameters of a tricky manufacturing process, the way your financial resources are allocated, or the details of your next marketing campaign?

You can maintain and enforce the confidentiality of this type of information only by establishing a trade-secret protection policy. Such a policy may involve:

• Having all members of your staff, your contractors, outside consultants and advisors, your critical suppliers, or anyone else who may be exposed to any sensitive information sign a confidentiality agreement.

You may even be wise to add some customers and casual visitors to the list of folks signing a confidentiality agreement.

• Restricting access to certain areas of your place of business.

• Marking some documents with a confidential legend.

• Limiting the circulation of confidential documents.

• Locking away sensitive material.

• Including appropriate warnings and directives in your employee manual.

You don't necessarily need to adopt all these measures, but you do need to exercise reasonable precautions. You need to ensure that any leak that may occur can only be the result of gross negligence or breach of duty for which you can get some legal remedy. No breach of duty can occur when your rules aren't clearly set and understood.

Courts will enforce reasonably drafted and implemented trade-secret protection policies by issuing restraining orders or injunctions against anyone breaching policy and against the beneficiaries of the indiscretion. Compensatory damages can also be awarded.

There is no application, registration, or other type of governmental involvement in devising a trade-secret policy no long wait; no expensive filing fee; just some advance planning, discipline, and a bit of legal work by your IP attorney to draft a few confidentiality agreements.

Covering copyrighted creations

Even though all original works of authorship are automatically copyrighted, registering them is important if you want to profit from them and also be able to take infringers to court. To do that, periodically gather and evaluate all textual, graphical, and audio-visual material, including technical and promotional works, photographs, computer programs, and microchip masks. You then need to register your copyright claims in the U.S. Copyright Office.

Protecting technological advances

As a means of promoting inventiveness and other forms of technological breakthrough, a company needs to ensure that all valuable contributions are protected and encouraged by:

• Implementing a recordkeeping system to document all new developments

• Devising a reward program for its creative employees

Preparing complete written disclosure of potential inventions and submitting them to a patent attorney is important. The attorney helps you determine on a case-by-case basis whether you need to file a patent application or treat the breakthrough as a trade secret. This decision is extremely critical in further helping you achieve your desired scope of protection within the constraints of your company's budget.

In general, whenever you know that your inventions can't be readily reverse-engineered — your competitors can't figure out what's going on by breaking it down or analyzing it — you can keep the inventions confidential and thus protected by a tight trade-secret policy. Chemical compositions are prime candidates for this type of treatment. Someone may be able to detect every chemical element in a new plastic material or eye drop medicine, but is unlikely to determine the amount of each element or the mixing process with any level of practical precision. In many cases, keeping the formulae, dosage, and mixing parameters as a trade secret insures protection against imitators.

The main advantages of treating an invention as a trade secret are:

• The invention need not be disclosed to the public in a patent application.

• The life of a trade secret is not limited to the 20 years normally associated with a patent.

The costs for preserving a trade secret are relatively insignificant compared to the amounts involved in obtaining and maintaining a patent.

But, with trade secrets, you unfortunately run a substantial risk that another party may independently discover the same thing and even secure a patent for it. When that happens within one or two years of your original discovery, the patent owner may be able to exclude you from the market.

Inventions that are practiced by way of a computer program can get a certain degree of protection under the program copyright, either by itself or in combination with a trade secret.

Preserving company identity and brand names

Commercial names, specifically a company's business name and logo and more significantly its brand names, determine how a company is perceived in the marketplace. These commercial names are vehicles upon which all a company's marketing programs ride.

If budgetary constraints limit your ability to protect your product and polish your commercial image, remember that establishing a good brand-name program is cheaper than obtaining patent protection, and you get much more bang for your buck.

Screening your commercial names

Be methodical in assessing your commercial names by:

• Taking a hard look at all your current commercial names and logotypes

• Rating their value

• Phasing out the ones that don't make the grade and replacing them with more judiciously selected monikers

Registering commercial names

Registering your commercial names on the federal register and, for extra protection, on some state registers greatly enhances their legal clout when you have to weed out copycats. Consider registering

• All your brand names as trademarks

• Your business identities as servicemarks

• The copyrights of all logotype graphic components in the Copyright Office as visual art

Protecting distinctive product and package configurations

Don't overlook the fact that an attractive and nonfunctional product shape or ornamentation, such as the unique shape of a bar of soap or a whimsical design on the side of an athletic shoe, can be recognized as source identifiers and registered as a trademark, just like a brand name. The fanciful shape of a perfume vial and the bright stripes across a pesticide package are distinctive packaging that can be registered as trademarks.

Even the recognizable sound of a motorcycle exhaust, the unique smell of a detergent, and the springy feel of a textile product can influence a buyer and so can be deemed eligible for registration as nonvisual marks.

If you don't have these kinds of unique identifiers for your product line, put your designer to the task of creating them. The more unique and distinctive you make your product, the easier it becomes for you to prevent your competitors from copying it.