What does a business owner need to know about intellectual property?

Most business owners understand that the real value of their business isn’t in tangible assets. That is, the inventory, office or store space (typically a lease), furniture, shelves, even the delivery truck, is not what adds value to their business. Instead, it is the intangible assets that really add value to the business. Intangible assets such as, well-trained employees, effective managers, a head chef at a restaurant.

But it’s the intangible assets such as, a secret sauce, a manner of doing business, a brand, that often add the most value to a business. These intangible assets often take a lot of time and investment to develop, and without these, the business may not be successful. These intangible assets are referred to, in the legal world, as intellectual property. So even if you didn’t think that you had any intellectual property, chances are now that you understand what intellectual property is, you recognize as a business owner that you do have intellectual proprety.

Specifically, the “secret sauce” is considered a trade secret (as are customer lists, vendor lists, and so forth). The manner of doing business and the brand may be marketed under what is considered a trademark (as are the names, tag lines, and graphic logos). Restaurant menus, websites, and brochures may all be protected by copyright.

Trade Secrets. A trade secret is anything that can be maintained as confidential (and typically by protecting it from competitors, also adds an edge to your business over competitors). There is no formal or government registration required. However, if a trade secret becomes known publicly, then it is no longer protected under the trade secret laws.

Trademarks: A trademark is a name, tag line, graphic (or logo), or combination of these, that designates the source of goods or services in commerce. When used in interstate commerce, the trademark can be registered with the US Trademark Office. Otherwise, state registration may be available.

Copyrights: A copyright protects original works of authorship. Copyright does not protect an idea in your head. The authorship must be reduced to a tangible medium, such as a recorded song, a written story, a picture painted on a canvas, or words typed on a website.

Patents: A patent protects an invention. The invention must be novel and non-obvious in order to receive patent protection from the US Patent Office. There are no state registrations for patents.

Patents, Trademarks, Copyrights, and Trade Secrets

For more information, please read Mark Trenner’s article “Top four ways to add value to your business” published in CoBiz Magazine.

Patent, Trademark or Copyright?

What is the difference between a patent, a trademark, and a copyright?

The one thing these all have in common is that patents, trademarks, and copyrights protect intellectual property. But they each protect different kinds of intellectual property. Copyrights protect original works of authorship including literary, dramatic, musical, and artistic works, such as books, movies, songs, and even computer software. Trademarks protect word and design logos – or “brands”. And patents protect inventions.

For the complete interview, Q & A on patents, trademarks, copyrights & more, visit this link: Patent Lawyer Denver

Tips for protecting your trade secrets

Trade secrets can be extremely valuable – or completely worthless if not properly protected. Trade secret protection may vary depending on which state you’re in. But in general, trade secret protection may be available for information, know-how, equipment, drawings, materials, etc. that are maintained as confidential. Trade secret protection can be lost entirely if the information becomes public knowledge.

Unlike patents, trade secret protection does not require a costly application process. In addition, trade secrets can be protected indefinitely (unless it becomes public knowledge). Of course, not everything can be protected by trade secret law. For example, if your product can be reverse engineered, then it cannot be protected as a trade secret and you should consider applying for patent protection.

If you have an idea that can be protected as a trade secret, here are some tips for maintaining the trade secret status of your idea.

1. Keep the trade secret locked up. Don’t leave diagrams on a white board in your office. Don’t leave plans laying around for the housekeepers to find. Don’t leave important files in plain view in your car. Lock it up – at least in a locked file cabinet, but more preferably in a safe or vault.

2. Don’t give any single person access to the entire trade secret. Those who must know about the trade secret often do not need to understand the entire trade secret in order to do their job. Telling them only what they need to know and keeping the remainder a secret reduces the chances that your trade secret will be leaked.

3. Use a nondisclosure or confidentiality agreement. These agreements are often referred to as NDAs (nondisclosure agreements), CAs (confidentiality agreements), or CDAs (confidential disclosure agreements). It is best not to share your trade secret with anyone. Generally, discussions of your trade secret should be very general. If you must share your trade secret, for example, a potential investor, then make sure to have them sign a nondisclosure or confidentiality agreement before you show them anything. Even with a nondisclosure or confidentiality agreement in place, only those having a specific need to know should be given any details of your trade secret.

And don’t use a form agreement you find on the Internet – it may not be valid in your state!

4. Mark any information you share with others as “Confidential” or “Proprietary” or using a similar legend. If you share anything related to your trade secret under a nondisclosure or confidentiality agreement, make sure you mark it as “Confidential” or “Proprietary” so that the person or persons receiving this information understand its confidential nature and will not further disclose your trade secret. Go to Office Depot or Staples or your own favorite office supply store and invest in a $2 stamp so you can easily mark things Confidential.

But don’t go marking everything as “Confidential” regardless of its actual status as a trade secret. That is, don’t mark things that are clearly in the public domain as “Confidential” – doing so can be just as bad as not marking anything at all!

5. Follow up discussions, meetings, and tours, with a written summary reminding the attendees of the trade secret status of what they saw or heard. Not everything you disclose will be in the form of a paper, drawing, or photo. Be sure that any oral and visual disclosures are summarized in writing, either a formal letter or an email, as soon as reasonably possible, and generally within a few business days. Your nondisclosure agreement may specify a time in which such disclosures are to be summarized in writing. But be sure to do so regardless of the nondisclosure agreement. This will help ensure that the person who saw or heard about your trade secret understands its confidential nature.

* Remember, your nondisclosure or confidentiality agreement is only as good as the person or persons you are disclosing your trade secret to. Be sure to deal with reputable people and businesses when it comes to your trade secret.

These are just a few techniques you should keep in mind if you want to protect a trade secret. You should always talk to a patent attorney to determine if your idea qualifies as a trade secret, and if so, what steps you should take in order to maintain the status of your trade secret.

Independent contractor agreements

Startups and small businesses often hire independent contractors instead of employees. Independent contractors are great for project-based work, because you don’t have to pay a salary, benefits, and payroll taxes. But there are a lot of pitfalls you need to consider before hiring an independent contractor. This article only addresses some of the intellectual property issues you might want to consider.

Any agreements with independent contractors should be entered into prior to their commencing work as important rights may otherwise be affected. Note that you must provide “fresh” consideration (i.e., a payment) if you are going to require independent contractors to execute this agreement after they have commenced work.

An independent contractor agreement should include a well-defined description of their scope of work. Your company may not have any rights in work conducted outside of this scope of work.

An independent contractor agreement should also include provisions to protect confidential information that independent contractors working for your company may develop or otherwise come into contact with.

In addition, an independent contractor agreement should cover ownership of any intellectual property that is developed by the independent contractor. Intellectual property rights include inventions (patents) and works of authorship (copyrights). There are many factors to consider with regard to copyright ownership. It is generally preferable to employ as employees those who will be engaged in developing copyrightable material of any significance to the company.

There may be other issues that you also want to address in an independent contractor scenario. For example, you may want to include a covenant not to compete. You may also want to include an arbitration clause should a dispute arise, an indemnification clause to protect your company against liability of the acts of the independent contractor, and/or address various employment and independent contractor issues.

As with any agreement, an independent contractor agreement includes obligations that you will owe to the contracting party, in addition to obligations of the independent contractor. Therefore, it is important that you carefully read and understand the agreement in its entirety before entering into any independent contractor agreement. If you do not understand a provision, or if you have any questions or concerns, contact a business attorney before entering into an independent contractor agreement.

Trade Secrets

Do you have a Big Secret? A lot of successful businesses do. Think of the major cola companies. Or the baked beans commercial. But trade secret protection is not limited to recipes.

Trade secrets can be extremely valuable – or completely worthless if not properly protected. Non-disclosure agreements are just the beginning. Trade secret material needs to be properly secured and marked as confidential and other measures are often necessary.

While tade secret protection varies at least to some extent depending on which state you’re in, trade secret protection may be available for information, know-how, equipment, drawings, materials, etc. that are maintained as confidential. Protection may not be available if the information is or becomes public knowledge. Therefore, trade secret protection is directly opposite of patent protection. That is, if you apply for a patent, your invention is disclosed to the public by the U.S. Patent Office before it will issue as a patent.

But there are some advantages to trade secret protection. For example, there is no application or registration process. In addition, your trade secret is protected indefinitely (unless it becomes public knowledge). Of course, not everything can be protected by trade secret law. For example, if your product can be reverse engineered, then it will not remain a secret for long after you begin selling the product to others.

Some common pitfalls you will want to avoid include not taking reasonable measures to protect the confidential nature of your trade secret materials, such as:

  • Failing to use non-disclosure agreements (NDAs).
  • Failing to properly mark trade secrets as confidential.
  • Failing to limit access to only those reasonably requiring access to the trade secret.

What can you do to protect your trade secret? First, keep it secret. Then hire a patent attorney to help you identify what might be best protected by trade secrets, and what is better protected by patents. A patent attorney can also help you establish a trade secret program to protect your own trade secrets, while taking measures to avoid infringing on someone else’s trade secrets.