Speed or IP Protection?

by Mike Myatt

While the security aspects of intellectual property (“IP”) are often sacrificed for speed to market considerations in today’s world of mash-ups and knock-offs, I believe when it comes to IP it is possible to have your cake and eat it too. The protection of all forms of intellectual property (“IP”) should constitute common sense and require no real explanation, however the courts are littered with case law precedent that has been decisioned against some of the largest and most sophisticated companies on the planet. What should be routine business 101 protocol, can easily turn into major financial and operational debacles if you don’t have a solid grasp of IP law. In today’s post I’ll discuss the basics of identifying and protecting your intellectual property.

The issues surrounding IP are basically three-fold:

  1. What actually constitutes intellectual property and what doesn’t?
  2. What is the best method to protect what is deemed as IP
  3. Is intellectual property worth protecting?

The answers to the aforementioned questions really lie in the eye of the beholder…Some companies take a very aggressive stance on attempting to classify virtually everything as intellectual property in an attempt to create competitive barriers and gain a competitive edge. Other firms only consider IP as it applies to protecting proprietary technology, while other firms almost ignore the concept of IP altogether (some out of ignorance and some by design).

As to cost…well sometimes protecting IP is absolutely worth the costs involved, and in other circumstances any dollars sunk into protecting IP is more akin to a frivolous investment that can actually show a strong negative return.

I have witnessed companies invest human and financial capital to adopt a trade name without doing their research only to receive a cease and desist letter, or even worse, to be sued for IP infringement. I have watched other firms invest the time and resources into protecting a piece of intellectual property via the appropriate form of registration, but not be prepared for the cost associated with defending their mark against an aggressive and better capitalized competitor.

I have observed other companies who made a valid attempt to protect their IP, but chose the wrong form of protection only to have better IP counsel exploit their flawed strategy. I have watched yet even more firms lose control over their IP to employees or contractors because they did not understand the ramifications of not using work for hire, non-compete, or non-circumvention provisions.

A company’s intellectual property can be virtually anything (tangible or intangible) from a trade name, product or service name, technology, business process, marketing copy, images and the list goes on…Companies can protect their IP through the use of a variety of legal mechanisms and registrations of which the most common types include:

  • Patents
  • Copyright
  • Trademark
  • Know-how
  • Trade Secret
  • Mask Works
  • Contract

Without going into the details surrounding all of the above protection alternatives, and to keep things simple, let’s use the example of a corporate website as it applies to copyright protection (keep in mind that certain things within a website can also be patentable, trademarkable or protected by contract). A basic website is composed of a multitude of copyrightable elements including textual content, graphical content, source code, custom applications, and numerous other items.

Although as an entrepreneur or senior executive you might personally draft some of the text for your website, your internal staff or outsourced agency/contractor usually edits and refines your draft text, creates the graphics, source code and applications. Who owns what? Are you protected? Do you care?

It is important to have proper written language incorporated within your employment agreements and vendor contracts to assure your right to move your site, modify it, and not have it held hostage or taken offline. Ideally, your contracts and agreements should specify that you own the copyright for the graphics, source code, applications, etc., but at a minimum you need a license to use those materials and to create derivative works.

Lastly, in addition to cost considerations there is also the potential for financial upside to a well conceived and protected piece of intellectual property. IP can produce revenue, be carried as an asset on the balance sheet, add to corporate valuation, or produce a personal income stream to an individual that licenses IP back to the entity.

Bottom line…IP considerations should be incorporated into your business strategy and tactics in a fashion that provides you with the greatest possible benefits while managing your risk. In order to achieve the balance between risk and reward you should retain the services of a reputable IP law firm.


Mike Myatt, is a Top CEO Coach, author of “Leadership Matters…The CEO Survival Manual“, and Managing Director of N2Growth.

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