Intellectual property is the product of one’s mind or one’s creative work such as a work of art, literature, invention, logo, or method. Intellectual property can be tangible or intangible. The law protects the owners of intellectual property against use and exploitation by others. Usually, these protections are granted for a certain period of time. In order for intellectual property to be protected it needs to be recognized by the law as one of the types of intellectual property and may be subject to formal requirements.
Types of Intellectual Property
A copyright gives the owner of a writing the right to use, license, and otherwise exploit the work for a designated number of years as provided for by Federal law. Writings, which now include video and sound recordings, consist of literary, artistic, and musical works. This protection is offered for originally authored works that can be expressed in a tangible format. It also gives the owner the right to exclude others from using or exploiting his or her work. Although one can have a copyright the moment they create an original work, the Library of Congress is responsible for registering copyrights. Formal registration affords additional legal protections. Copyrights are governed by the U.S. Copyright Act. An example of a copyright is the exclusive right held by a recording artist to reproduce one of their songs.
A patent is the right to use, license, and otherwise exploit an invention and exclude others from doing the same. A patent gives an owner of intellectual property these rights in exchange for publicly disclosing the details of the invention. Patents are issued by the U.S. Patent and Trademark Office and are governed by the U.S. Patent Act. An example of a patent is the one held by Apple for the design of the iPhone.
A trademark is a word or group of words, symbols, or logos for use in commerce that specifically identifies the source of a good or service and distinguishes it from all other sources. Trademarks are registered with the Federal government or with individual states.
Trademarks are issued by the U.S. Patent and Trademark Office and are governed by the Lanham Act. Common trademarks are the golden arches of McDonald’s and the check mark used by Nike.
Intellectual Property in Business
Most businesses fail to create an effective intellectual property strategy and as a result, miss out on a range of benefits that an intellectual property portfolio can provide if managed as part of the business. Some of those benefits include access to new markets, iteratively better products, new revenue streams, competitive barriers for others, etc.
Most organizations view the use of intellectual property portfolio to be limited to one of the following two scenarios:
- As a sword to suppress competition, or
- As a shield to protect against claims of infringement by competition for fear of cross-claim
To derive the best benefits intellectual property should be considered a key strategic asset class, as a proper intellectual property strategy enables the business to leverage the intellectual property portfolio in a much more profitable way. Although the sword or the shield are indeed valid strategies, they are by no means the only options available. The business should also consider the additional benefits that can be derived by including the following elements in an effective intellectual property strategy:
- Selling (i.e., assigning) the intellectual property rights to another enterprise in whose hands it would be more valuable
- Licensing the intellectual property, perhaps even to competitors if market type and size support it
- Using the right as a vehicle to organize profit‐enhancing collaborations with competitors, suppliers, customers, or the developers of complementary products
In a similar vein, often a business entering a line of business that may implicate intellectual property rights held by others tries to invalidate the other’s intellectual property rights through litigation, believing that to be the only option available. Although possibly an attractive strategy, it is not the only option. Other options available include: Developing an alternative, non‐infringing technology, securing a license from the holder of the intellectual property right, building a portfolio of intellectual property rights sufficiently substantial and credible to deter litigation
In addition, wide and rapid deployment of potentially infringing products or services can often force the intellectual property rights holder to grant a license or risk a judge or jury finding the infringing product or service to be lawful based on its wide adoption.
The applicability of the various elements of the strategies discussed above will depend upon the context of the specific business, product/service, and market. Therefore, an intellectual property strategy for a business requires weighing the relative costs and benefits of each option. The cost-benefit metrics would generally be very different in the short term as compared to the long term and that fact should be considered when generating the intellectual property strategy. An organization also has to continually monitor whether the intellectual property strategy in place needs to be fine-tuned based on changing product mix, new markets, market shares, competitors, and customers as well as changing laws and regulations. Intellectual property has the potential to be a vital asset for your business. Analyzing the intellectual property portfolio considering both the business and legal aspects, enables an organization to best leverage the assets in its portfolio. Attorney Kumar has been responsible for the intellectual property strategy of organizations in his past business experience and can help provide you with valuable insights that can help you avoid costly mistakes and get the most value from your intellectual property assets. Call our intellectual property attorneys at The Kumar Law Firm for a consultation today.