Friday, January 13, 2012

How to protect your IP gold!

What do a banana, Vegas, an elf on the shelf, Kodak, Wimpy Kid & Zombies, and the Galaxy Tab all have in common? They are all tied to a variety of Intellectual Property (IP) issues ranging from disputes to infringement to raising capital.*

On January 19, 2012, Sharon L. Toerek, of Licata & Toerek, addressed a Cleveland group of professional communicators on the very apropos topic, “It's all you've got: How to protect your Intellectual Property.” I interviewed Toerek ahead of the event to learn more about IP.

Defining IP

According to Toerek, IP is often a company’s most valuable asset. “For most closely held companies in particular, and even larger corporate concerns, their IP is their most valuable asset. It’s worth more than equipment, inventory, or the building they are doing business out of. Without the innovation and brand equity IP represents, a company is just not as valuable.”

So what is IP? Says Toerek, “IP is really a term that encompasses various groups of rights and intellectual capital that a company possesses.” IP generally falls into one of four categories Toerek defines as follows:
  • Trademarks (TM, SM, ®) are the legal rights that someone has in association with the marks they use to identify their products or services.
  • Patents are the rights an inventor has in some original work that is innovative and technical, although Toerek points out, “you can have design patent rights in some circumstances.”
  • Trade Secrets is information that if it fell into the hands of your competitor in the marketplace, would do harm to your business. This is information that “is valuable to your company because it is proprietary and kept secret.”
  • Copyright (©) “is a term referring to a bundle of rights that a creator has in any original creative work whether writing, painting, software, and the like.” These rights include the rights to display, copy, sell, license, or create a derivative work.
IP management mistakes

Unfortunately many companies fail to understand the value of their IP. States Toerek, “Most companies have at least three out of the four types of IP related to their business. Yet IP is typically undervalued.”

She cites two significant weaknesses when it comes to managing and protecting IP:
  • Not getting it in writing! Says Toerek, “I’ve worked with a lot of clients in the marketing services fields and the number one thing they fail to do is document owner issues in writing.” It’s often assumed when working with independent contractors and freelancers that the entity paying for the work owns the work. Not so, says Toerek, if such an agreement is not in writing. “The failure to document in writing the IP aspects of the relationship and the IP transfers that occur is a very common thing that I see all the time.”
  • Not having a process or a point of contact! Toerek says it’s important to have “enforceable systems within a company for managing IP.” Simply, this means having a point person in charge of clearing and registering TMs, domain names, rights agreements, and so forth. They’re the one who designs and manages forms, archives documents, and asks the right questions regarding acquiring, protecting, and managing rights. “What’s the process?,” says Toerek. “If you manage the process, then the rest pretty much falls in line.”
Areas of IP challenges in 2012

There are ongoing concerns companies must deal with related to their IP. However, Toerek sees two that could be prominent this year:
  1. New top-level domains. “I think that one of the biggest challenges we’re going to see this year involves the new top level domain registrar battle. This is going to create sort of a Wild West situation for domain owners.” She explains that if new top level domains continue to be authorized indiscriminately, basically making any term open for sale to anyone, then every trademark holder “is going to have to be vigilant and on guard about whether their TM or other IP is being abused or even infringed upon if someone is registering a domain name that conflicts with their mark.”
  2. Social media. “On the copyright side of things we need to be watchful in terms of the potential for infringement that social media creates. With open platforms there’s going to be content misappropriation.” She explains that the platform sponsors such as Facebook, Twitter, and others, are generally behaving responsibly.  “They are protected by the Digital Millennium Copyright Act so as long as they’re being attentive to potential abuse, putting processes in place to prevent abuse, allowing people to report the abuse, and getting the infringing content taken down.” However, she points out, this kind of IP abuse is “completely viral and hard to control.”
Enforcing IP rights

Often the media carries stories of the big, mean company going after a smaller entity alleging TM or other infringement. Says Toerek, “In the TM arena this is known as trademark bullying. It happens when someone owns a TM but may not be using it broadly based on TM rights and goes after a smaller user trying to extract money, a license fee, or impose a cease and desist order.”

In these situations Toerek says it’s important to keep in mind that this is a business transaction. “My first reach out is always on a business level and it may come in the form of a cease and desist letter. This is always tempered with a statement of willingness to give the person, who may have acted innocently, a chance to stop or correct what they are doing within a reasonable period of time.”

Going forward she explains it’s important to “be vigilant and accelerate things at a reasonable pace.” She says if you know somebody’s infringing and you don’t take prompt action, your inaction can be used against you.

When approaching these situations, she advises to be transparent and point out your business case. “By pointing out the merits of your case in business terms and from a business point of view it’s more difficult for them to spin it into something that reflects badly on you as the IP owner.”

Sharon L. Toerek

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* Links to articles about each case:

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