“Intellectual property is a key aspect for economic development.” Craig Venteer, scientist known for leading one of the first draft sequences of the human genome and led the first team to transfect a cell with a synthetic chromosome
IP—intellectual property—may be the most valuable things owned by your business. IP can be ways to help you conduct your business or sources of revenue in and of themselves. Adding to your inventory of IP can help you grow your business. But you need to protect these important assets. AI and other technology have increased the vulnerability of IP. Here are some ideas to think about.
Nondisclosure agreements
You want to protect proprietary information —customer lists, pricing, processes, formulas, and more. These trade secrets, the most famous of which are the formula for Coca Cola and the recipe for KFC, are key to a business’ success. Sure, once they’ve been stolen or disclosed, there are legal remedies (e.g., injunctive relief; severe financial damages). But what can you do to prevent exposure of your company’s trade secrets? A nondisclosure agreement is vital.
Steps to take:
- Define what comprises your trade secrets versus information available to the general public employees know what they can and cannot share.
- Have employees sign a nondisclosure agreement (NDA). Also require independent contractors and business partners to sign NDAs.
- Educate employees about what is proprietary information that is not to be shared. One survey found that 38% of employees admitted to sending sensitive work data to AI. This is an unwanted disclosure.
- Regular repeat of these actions: redefining trade secrets and educating employees.
Noncompete agreements
You want to protect yourself when employees leave your company from going into direct competition with you? Can you contractually do this?
The Federal Trade Commission (FTC) issued a final rule banning noncompete agreements except in limited situations. However, a federal district court blocked the FTC rule. The same thing happened in Florida. The FTC appealed both cases (to the Fifth and Eleventh Circuits, but filed motions to stay its appeals for 120 days (to July). And the FTC proposed a Joint Task Force that could bring the ban on nondisclosure agreements back under federal law.
Despite the lack of a federal rule at this time, most states have their own noncompete laws. For example, effective July 1, 2025, Wyoming will make it very difficult to enforce a noncompete agreement. But the law still allows such agreements to be used in the sale of a business, to protect trade secrets, and in certain other situations. You can track state noncompete laws by looking at an interactive map. Some states have full bans like Wyoming, with exceptions for the sale of a business, while some have bans based on the income of employees (i.e., those with income over a threshold amount can be subject to a noncompete agreement). Some states permit agreements but impose various restrictions (e.g., limited time; location).
Patents, trademarks, and copyrights
These forms of IP can gain government protection from infringement. They are a source for revenue growth. Be sure to take the necessary steps to gain optimum legal protection so you can then use them for financial advantage. There are costs involved obtaining this protection, but the investment can pay off handily.
Get information for the following:
- Patents: U.S. Patent and Trademark Office
- Trademarks: U.S. Patent and Trademark Office
- Copyrights: U.S. Copyright Office
Budget for the cost of this legal protection. For example, trademark protection is hundreds to thousands of dollars, depending on what’s involved. There are a number of DIY websites through which to register, but you may want to use an attorney for this important task.
Understand that these federal protections generally only apply within the U.S. If you conduct business abroad—physically or virtually—your patents, trademarks, and copyrights are vulnerable to theft. This is something the government is well aware of. What’s happening on this front is beyond the scope of this blog, but something to think about.
Final thought
IP is what gives your business a competitive edge. It’s what makes your business unique and attractive. And it’s an important way to grow your business. But you have to invest the time and money to protect your IP.
You’ll find additional information about intellectual property in this list of blogs.
