Knowing Is Half the Battle: Creating a Strong Intellectual Property Portfolio
Intellectual property (“IP”), consisting of patents, trademarks, and copyrights, are significant intangible assets that comprise approximately 80% of the market value of publicly traded U.S. based companies. Companies and investors recognize that strong IP portfolios provide a competitive advantage in the marketplace and add significant value to the bottom line. Building a strong IP portfolio is like building a home, you need to ensure that it has a strong foundation, otherwise everything that you build could come crumbling down when you seek to sell, license or enforce the IP.
More often than not a company’s biggest hurdle in building and maintaining a strong IP portfolio is itself, because it simply does not know how to identify its IP. An IP assessment assists in identifying your IP to assess its strengths and weaknesses, and to identify a plan to move forward.
A strong IP portfolio foundation begins with the assurance that you have complete ownership over the IP, which significantly reduces or eliminates many headaches when seeking to sell, license or enforce. IP ownership issues are often addressed through written agreements. For instance, generally if you have independent contractors develop IP for your company, then you must have a written agreement transferring ownership of the IP to your company, otherwise you simply have permission to use the IP. Furthermore, while materials created during your W-2 employees’ course of employment are generally owned by the employer, there are circumstances where an employee and employer share ownership in an invention, absent a written agreement transferring all rights in the invention to the employer. Identifying ownership issues sooner rather than later is beneficial, because it allows you to address and correct the issues in advance of any adverse consequences.
IP clearance is another factor of a strong IP Portfolio. IP clearance consists of the steps that you take to ensure that you are not infringing upon another party’s IP rights. For instance, many companies engage in trademark mark clearance to determine if the trademark selected for use or used by the company is being used by another entity, which could prohibit your use, dilute your ownership, limit geographic expansion, or in the worst case scenario result in exposure to a potential trademark infringement claim. Another facet of IP clearance is the assurance that you either own or secure the right to use copyrighted works (videos, pictures, graphics, music, individual’s names and likeness, etc.) in your business. For example, a common belief is that simply because something appears on the internet that it is in the public domain and free for copying. This is false, and the use of such material could expose you to claims for copyright infringement.
Once you have secured ownership and engaged in the proper IP clearance, then you will want to consider whether you want to seek to register the IP. IP registration often refers to trademark and copyright registration where you seek to register your trademarks or copyrights with the appropriate governmental body. For trademark registrations, this often means seeking registration at either the state or federal level, but may include foreign registrations if you anticipate offering your goods and services outside of the United States. Likewise, copyright registrations are obtained through the United States Copyright Office, but like trademark registrations, can be obtained in countries outside the United States. Although you still have rights in the trademarks and copyrights without obtaining a registration, registration provides you with additional rights and remedies, such a presumption of ownership, ability to use the registered work as collateral, and additional legal remedies, that are beneficial when in using, selling, licensing or enforcing your trademarks and copyrights. Patents, however, are a completely different animal that require registration in order to obtain the exclusive right to use or manufacture the patented item, wherein public disclosure of the item over which you seek to patent without first filing a patent application could adversely affect your potential patent rights.
An IP assessment will assist in developing and maintaining a strong IP portfolio and will put you on your way to becoming branded and protected.
Zachary Messa is a Florida Bar Certified Intellectual Property Attorney