How to Protect Intellectual Property (IP)

Intellectual property (IP) protection is often pushed down the priority list. However, this is a short-sighted approach: You risk losing income and investors’ interest in your business. You could also unnecessarily complicate cooperation with your partners. Moreover, there is no guarantee that disputed intellectual property rights (IPR) will be assigned to the company in the event of a partnership break-up. Ashley V. Brewer, Business Attorney at BrewerLong, highlights the paradox of ignoring IP protection: “[…] if you do not protect your intellectual property proactively and early, you might have to protect it defensively later.” Underestimating the importance of IP protection can hit startup business in particular, observe Andrew (A.J.) Tibbetts and Edward J. Russavage, Intellectual Property Attorneys and Shareholders at Wolf Greenfield. According to them, “[…] early waste on IP risks raising additional costs later causing a cascade of expense that may hit a startup just when it is at its most fragile.”

Businesses that do not protect their IP act more like ‘charities’, claims Claire Howell, a senior lecturer at Aston Law School. To avoid giving away intellectual capital to third-parties, she recommends conducting an IP audit. It will help find out IP assets that a firm already has and those that it needs to obtain, estimate competitors’ IP as well as assess whether the firm is “maximising value under current IP laws”.

The next move, according to Howell, is to create an IP policy and review it on a regular basis to ensure that it is aligned with the business strategy. Basic IP policies could cover issues like handling confidential or third-party information, confidentiality clauses and exit interviews. Their design is quite straightforward compared to developing an IP strategy: the firm needs to conduct thorough research to assess the performance of its competitors, industry growth and the market type (Is it a high value or mass market?). Then it faces the challenge of aligning its IP strategy with its business strategy: it needs to come up with the best way to utilize its IP strategy to reach its long-term goals.

Howell notes that a well-designed IP strategy could also be used as a ‘bargaining tool’: it could prevent competitors from trying to create similar products or even help build customer loyalty.

“For IP policies to work, a company must be committed at the highest level, flowing agreed policies down to all staff through a skilled team with a proper budget. This means that everyone knows what’s happening with IP at all times,” Howell explains.

The South-East Asia IPR SME Helpdesk, which provides European SMEs with information on IP protection in South-East Asia, gives practical advice on how to protect IP at trade fairs in Thailand, which can be applicable to other cases as well. It recommends taking these 4 preventive measures before an event:

[1] Indicate your IP ownership in all exhibition materials using these symbols or phrases: © + the year of publication (copyright) | ™ / TM (unregistered trademark| ® (registered trademark| Patent Pending or Patent WO/12345678 (patent jurisdiction and number).

[2] Look for an IP / business centre that could provide you assistance or advice during the trade fair if needed.

[3] Find a local lawyer whom you might authorize to take legal action if your IPR have been violated.

[4] Go through the list of exhibitors to see if there is anyone whose stand you should check.

If you have discovered any copyright infringement at a trade fair, you should consider these 5 enforcement options suggested by the Helpdesk:

[1] Notification letter. It notifies the infringer about your IPR. It could also mention that you are willing to discuss the issue or even the possibility of licensing your IP. It is often used when there is no strong evidence of infringement.

[2] ‘Cease and desist’ letter. It demands an immediate stop to breaching your IPR, and threatens legal action. It could include a request for damage compensation or settlement terms. Usually such letters are sent by lawyers.

[3] Raid or ‘search and seize’ actions. They are usually carried out without notifying the infringer in advance to take them by surprise. They are preferred in trademark or copyright infringement cases because there are fewer factual and legal complexities involved compared to patent infringement cases.

[4] Investigation. It helps find out if the infringer gets materials from a larger supplier who might reside abroad. If so, you should investigate their customers and network.  

[5] Legal proceedings. Often this is the last option left. There are 3 success factors: (1) substantial financial resources, (2) strong evidence of infringement and (3) expert legal advice.

Law firm Revision Legal advises how to protect IP from employee theft, which can be triggered by an employer-employee dispute or the termination of an employment contract. Here are some of its insights:

[1] Employment agreements. Make sure that all your employment agreements have employee signatures to grant you the copyright on all employee creative work conducted during the employment period. When drafting an employment agreement, include a work made for hire clause which will assign all creative work to your firm if it cannot be classified as work made for hire. Consider adding a provision that “all inventions, discovery, improvements, innovations, and ideas created within the employee’s employment with the company are owned by, and assigned to the employer, including any resulting patents or rights to royalties”.  

[2] Non-compete agreements. To protect their competitive interests and investment in raising employee qualification, many employers decide to include non-compete clauses in their employment agreements. These clauses, however, guarantee only limited legal protection: they are often restricted by time, a geographic location or type.

[3] Confidentiality and trade secret agreements. These are protective measures against the disclosure of confidential information of potential commercial value. They can also prevent the theft of trade secrets which give a competitive advantage.

[4] Access controls. One of the simplest ways to protect IP against unauthorized use is to grant controlled access to workplace information through company policies on security, acceptable use, e-mail, passwords or cybersecurity, to name a few.

References:  ANZ, SmartCompany | Kathy Caprino, Forbes | Andrew (A.J.) Tibbetts and Edward J. Russavage, Techday | BQ Live | The South-East Asia IPR SME Helpdesk, ASEAN Briefing | Revision Legal, JD Supra