Merriam-Webster defines intellectual property, or IP, as “property (as an idea, invention, or process) that derives from the work of the mind or intellect; also: an application, right, or registration relating to this.” IP can be a boon to a business (think about the Coca Cola formula, the Nike trademark, and the patent for Dropbox). Unfortunately, there’s a great deal of theft of U.S. intellectual property, which was estimated to be $822.3 billion in 2021. This can be stealing trade secrets, counterfeiting goods, and pirating software and video games. While there may be no way to fully protect your IP, there are steps you can take to heighten its protection.
Take the time to explore what IP your company may have and what you can do to protect it.
Identify your IP
What IP are you currently sitting on? It may be comprised of trademarked goods, trade secrets, databases, software codes, patented items, service marks, business or trade names, or other property. Consider compiling an inventory so you don’t overlook anything. Knowing what you have enables you to then learn what protections are needed and whether they’re available.
Take formal actions
Some types of intellectual property in the U.S., such as patents, trademarks, and copyrights, can be registered with the federal government to give you strong protection. Learn more from the U.S. Patent and Trademark Office and the U.S. Copyright Office. Recognize, however, that this legal protection is only in the U.S. To gain protection abroad requires registration in other countries. Certain treaties make it easier to do this in some countries than in others. For example, under the Madrid Protocol (to which 128 countries belong), you can apply for international registration for a trademark using a single application.
Some protections can be DIY, such as a copyright. Other protections usually need the assistance of professionals, and it can be very pricey.
Protect your trade secrets
Not everything can or should be registered, and it’s up to you to take action that will protect formulas, customer lists, price lists, and other trade secrets that you don’t want falling into a competitor’s hands. Protection here means:
- Guarding your secrets. Think about how many people have access to the KFC recipe. Lock-and-key strategies are important for certain trade secrets.
- Getting employees onboard. Require all employees to understand your IP. Have them sign confidentiality agreements barring them from disclosing your secrets during employment and after they leave.
Take legal action
You may be forced to take legal action in order to protect your IP. (I had to do this last year when Big Ideas for Small Business® was used without permission.) Your legal action should be commensurate with the unauthorized use of your IP. Here are some ideas:
- If someone is using your trademark, a cease and desist letter may be all that is necessary to stop the infraction. I was able through contacts to reach out informally when IBM and Experian used my trademark and both companies were quick to apologize and immediately ceased using it.
- If you learn that your goods are being counterfeited, report IP theft to the authorities, explained later.
- If, despite a nondisclosure agreement, a former employee is using your computer codes, seek a temporary restraining order or preliminary injunction on the grounds that you would suffer irreparable harm if this continues. Commence a lawsuit seeking to recoup monetary damages for your injury and a permanent injunction against the use of your proprietary information.
Work with a knowledgeable IP attorney to assess the merits of legal action and whether it makes financial sense to proceed.
Don’t do business with counterfeiters
Refrain from buying counterfeit goods or using pirated software, which only encourages more illegal activities. A price for an item that seems too good to be true is a tipoff. Check for authorized retailers and be skeptical of labeling that could be fake.
You may have IP and it may be more valuable to you than you think. What will it generate in income for your business in years to come? What would someone else be willing to pay for your IP if and when you sell your business? Recognize this so you can protect your assets. If, despite all your hard effort you still become a victim of IP theft, report it to the federal government’s National Intellectual Property Rights Coordination Center.