INTELLECTUAL PROPERTY: A VALUABLE BUSINESS
ASSET
Intellectual property is a
valuable asset for an entrepreneur. It consists of certain intellectual
creations by entrepreneurs or their staffs that have commercial value and are
given legal property rights. Examples of such creations are a new product and
its name, a new method, a new process, a new promotional scheme, and a new
design.
A fence or a lock cannot
protect these intangible assets. Instead, patents, copyrights, and trademarks
are used to prevent competitors from benefiting from an individual’s or firm’s
ideas.
Protecting intellectual
property is a practical business decision. The time and money invested in perfecting
an idea might be wasted if others could copy it. Competitors could charge a
lower price because they did not incur the startup costs. The purpose of
intellectual property law is to encourage innovation by giving creators time
to profit from their new ideas and to recover development costs.
Intellectual property
rights can be bought, sold, licensed, or given away freely. Some businesses
have made millions of dollars by licensing or selling their patents or
trademarks.
Every entrepreneur should
be aware of intellectual property rights in order to protect these assets in a
world of global markets. An intellectual property lawyer can provide information
and advice.
The main forms of
intellectual property rights are:
·
Patents: A patent grants an inventor
the right to exclude others from making, using, offering for sale, or selling
an invention for a fixed period of time - in most countries, for up to 20
years. When the time period ends, the patent goes into the public domain and
anyone may use it.
·
Copyright: Copyrights protect
original creative works of authors, composers, and others. In general, a copyright
does not protect the idea itself, but only the form in which it appears - from
sound recordings to books, computer programs, or architecture. The owner of
copyrighted material has the exclusive right to reproduce the work, prepare
derivative works, distribute copies of the work, or perform or display the work
publicly.
·
Trade Secrets: Trade secrets consist of
knowledge that is kept secret in order to gain an advantage in business.
“Customer lists, sources of supply of scarce materials, or sources of supply
with faster delivery or lower prices may be trade secrets,” explains Joseph S.
Iandiorio, the founding partner of Iandiorio and Teska, an intellectual
property law firm. “Certainly, secret processes, formulas, techniques,
manufacturing know-how, advertising schemes, marketing programs, and business
plans are all protectable.”
Trade secrets are usually
protected by contracts and non-disclosure agreements. No other legal form of
protection exists. The most famous trade secret is the formula for Coca-Cola,
which is more than 100 years old.
Trade secrets are valid
only if the information has not been revealed. There is no protection against discovery
by fair means such as accidental disclosure, reverse engineering, or
independent invention.
Trademarks: A trademark
protects a symbol, word, or design, used individually or in combination, to
indicate the source of goods and to distinguish them from goods produced by
others. For example, Apple Computer uses a picture of an apple with a bite out
of it and the symbol (®) which means registered trademark. A service mark
similarly identifies the source of a service. Trademarks and service marks give
a business the right to prevent others from using a confusingly similar mark.
In most countries, trademarks
must be registered to be enforceable and renewed to remain in force. However,
they can be renewed endlessly. Consumers use marks to find a specific firm’s
goods that they see as particularly desirable — for example, Barbie dolls or
Toyota automobiles. Unlike copyrights or patents, which expire, many
business’s trademarks become more valuable over time.
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