It certainly isn't news that we now live in the Information Age. But in an economy so dependent on service and technology companies, often the most valuable business assets aren't the heavy equipment or machinery in the factory, but the intangible assets woven throughout the fabric of the organization.
It's these intangible and proprietary assets that enable a company to distinguish itself from competitors. Intangible assets such as intellectual property, trade secrets, pricing formulas, customer lists, business plans, recipes and the like are typically the foundation upon which a company is built in a business world full of copycat competitors. After all, every pizza shop has an oven, but not every pizza shop has the secret family recipe for the sauce that was handed down from your grandmother to your father and now to you.
Without the ability to bolt these assets down to the floor, you'd be wise to develop a strategy to properly protect your intangible assets, thus positioning your company to grow and prosper against your competitors. As a responsible business owner, it is incumbent upon you to do everything in your power to protect those very valuable assets.
How do you protect assets that you may not be able to see, or at best that exist only on a piece of paper or on a hard drive? First things first: Make sure you sit down with an attorney well-versed in issues related to intangible asset protection. Here are some of the ways you can protect your intangibles:
- Patents, copyrights and trademarks. These are legal filings that document your ownership and create certain legal protections to help you protect your property. In order to receive a patent or trademark, you must submit an application to the appropriate governmental agency explaining why the asset is proprietary to you. Even though you do own copyrights without filing, you should file to fully protect those rights. Have your attorney assist you with these applications.
- Confidentiality or nondisclosure agreements. These documents commit a party to keeping specified data and information confidential and out of the hands of unintended parties. They are designed to protect your valuable trade secrets. These agreements can be very simple or very detailed, depending on the requirement. Always consult an attorney on this.
- Employment agreements. These agreements stipulate that all company assets are proprietary and that unauthorized disclosure of confidential information such as pricing formulas, customer lists and other data and information is prohibited. Also, these agreements help ensure that any invention or discovery made by an employee while employed with the company is the property of the company.
- Computer passwords, safes and locked file cabinets can restrict access to proprietary information, but only if you use them.
- Data backup. Back up everything that is important. Digital documents should be backed up on a server that is in a different location or on a zip disk or CD that is kept under your mother-in-law's mattress along with copies of important physical documents. Absolutely do not attempt to store anything important in your head.
Theft of your most valuable assets or loss of assets due a calamity can ruin an emerging business. When you leave your home in the morning, you lock your front door to protect your personal property. Why not do the same for your company's most valuable business property?
Bill Fiduccia is a founding partner of BizPlanIt, a professional business planning consulting firm that helps early-stage, emerging-growth and established companies prepare clear, concise and compelling business plans that get results. David G. Beauchamp and Karen R. Dickinson of the law firm Quarles & Brady Streich Lang LLP contributed to this article.