Intellectual property (IP) rights sound like something only the big corporates have to deal with, right? Well, IP protection is just as important for small and medium businesses.
Can your competitors access your unique ideas? Are your designs leaking out on your watch? Then it’s time to think about protecting your intellectual property.
What is considered intellectual property?
Intellectual property includes all your business’s intangible assets – your unique ideas, knowledge, expertise, design or inventions. It sets you apart from your competitors and is crucial in determining whether your business is successful.
Acquiring intellectual property rights and IP protection can be used as legal protection to help protect your intellectual property from being used by other businesses. A common example of intellectual property protection is through a registered trademark.
While there is some cost involved with registering IP rights, would you want your competitors to know your trade secret? Getting into an IP infringement lawsuit will cost your business much more in the future.
So let’s take a look at how to put the right safeguards in place.
1. Identifying the intellectual property in your business
First up, you’ll need to assess what’s considered intellectual property in your business so you know what you need to protect. Here are some examples.
An electrical company’s intellectual property may include:
- Your brand name
- Your supplier list
- Your customer database
- Your website
- Your marketing collateral
A professional services company’s intellectual property may include:
- Your brand name
- Your client and prospect’s database
- Your business strategy and plans
- Your marketing material
- Information about your clients
An engineering company‘s intellectual property may include:
- Your inventions
- Your brand names
- Your R&D plans
2. Consider your options to protect intellectual property rights
Depending on the type of intellectual property you’ve identified, you’ll need to protect IP rights in different ways.
Copyright, trademark, and patent are three common types of IP protection.
Copyright applies to creative works. In Australia copyright is automatic, and you aren’t legally required to put a copyright notice on the work you publish.
Copyright doesn’t apply to the ideas in your head, only things in a tangible form like an electronic or written document. In other countries, you might have to register your work right away to make it easier to prove ownership.
Trademark is for your brand – the logos, designs and phrases you use in your marketing material.
A trademark registration will help with IP protections related to trademarks.
A patent applies to your unique product or invention. Unlike copyright, a patent application protects your original ideas from being reproduced or distributed without your permission.
Check out the information on IP Australia’s website to see what type best suits your creative work. And remember to keep any records or documents of your design in case you need to prove that it was yours.
3. Keeping trade secrets to yourself
We get it. You’ve got a bright idea, and you want to share it with the world. But beware of the digital pitfalls.
If you publish an article or even shoot off a tweet about your idea before it’s protected, it may be at risk from copycats, and it might be impossible to patent it down the track.
So while you’re doing your IP audits and considering registering a patent or design, don’t publish, promote or disclose your own business idea. It’s best to keep your secret just that.
4. Need to share? Be cautious with confidentiality agreements
Sometimes you need to share your intellectual property before it’s registered, such as when you’re developing new computer programs and your developers and coders have access.
Just make sure that employees, contractors and third parties that you’re working with sign a legally binding non-disclosure agreement (NDA) to keep the details secret and the IP safe.
You might know this as a confidential disclosure agreement, proprietary information agreement or secrecy agreement. You can find an IP Contract Generator here.
Otherwise, mum’s the word. Be aware that when employees come up with new ideas, the rightful owner of the copyright will usually belong to the employer. So it’s sensible to include copyright clauses around IP rights and a confidentiality agreement in your employee’s contracts.
If you’re looking at licencing options, such as when third parties have access to your products for distribution, you’ll need to get an IP attorney involved. They’ll help you understand the criteria around usage, quality and the distribution process to make sure your IP is protected effectively.
5. Register your idea, business, product and domain name
The IP registration process can seem complicated, but there’s plenty of assistance for small and medium businesses out there. IP Australia’s website manages and administers patents, trademarks and designs.
And the Department of Infrastructure, Transport, Regional Development and Communications administers copyright and circuit layout rights. Business, company and domain names aren’t types of IP.
But they’re part of your brand and identity, and you should still consider registering them, particularly if the business is or will be built on your IP. If anyone is working on a similar idea, this will help resolve any confusion.
Guess who didn’t own the domain name ‘apple.co.uk’ until 2012? That’s right, Apple. A costly oversight.
6. Keep your tech secure
How secure are your business systems? The right type of IP protection aside, investing in secure technology infrastructure and business systems is a must for any business too. Not only will it protect your IP if you store it in your system or online, but it’ll also keep your business data safe – a win-win.
Cybercrime is an all too common occurrence, and having compromised credentials is a costly issue to fix for businesses. But, with the right security in place and controlling where you store intellectual property, you can mitigate the risk to your IP and data quite easily.
Here are some things you or your IT department can put in place:
- Set up password protection, ideally two-factor authentication for your systems
- Encrypt your data
- Make sure your system is housed on secure servers
- Do your research and choose a reliable, accredited HR software
7. Track costs and beware of the early reveal
Are you building a prototype of your idea to show its potential to investors or the bank? Make sure you have strong non-disclosure agreements in place. Also, be careful not to try to make any money from your invention before you’ve applied to protect it.
Showing your product too early might stop you from getting a patent application approved. Also make sure you keep track of all your related costs, including for IP protection, to help you price up your offering and recoup costs down the road.
8. Your intellectual property rights are your responsibility
That’s right, as the owner of your IP rights, it’s up to you to enforce them and to watch out for an infringement. IP infringement can chip away at your market value and even cause reputational damage – think low-quality knockoffs.
There are IP insurance options that can help protect you. Also, have you considered having an IP strategy in place? This will help to define what’s regarded as infringement and how to take legal action if the worst happens.
9. Keep intellectual property ownership simple
Sometimes IP comes from more than one person in your business, such as within your research and development team. Joint IP ownership gives control of the patent or ownership rights to the multiple parties involved, but it doesn’t stop one person copying or distributing the IP without consultation.
This can lead to a risk of exploitation unless you make specific arrangements to involve all the owners. Other complications of joint ownership happen when it comes to profit. You can mitigate these risks by including specific definitions in people’s contracts, but it can still get tricky.
If your business has IP ownership, it keeps things simple. But to keep sailing in calm waters, you’ll want to talk to the people involved and make sure the proper agreements are in place.
Don’t give away your best asset
Intellectual property is an asset to your business. Often, it’s the reason you’re in business in the first place. Preventing other companies from making money from your idea by copying or selling it without your permission just makes good business sense.
Start by identifying what IP you have, then consider how you can best protect it. It may mean applying for a trademark or fortifying your IT systems. If you’re unsure, engage a small business lawyer to give you a helping hand.
There will be some cost involved in protecting your IP (there’s no avoiding that, unfortunately) but it’s an investment in your future. Isn’t that worth protecting?