Locked doors and a security system protect your equipment,
inventory and payroll. But what protects your business's most
valuable possessions? Intellectual property laws can protect your
trade secrets, trademarks and product design, provided you take the
proper steps.
Chicago attorney Kara E.F. Cenar of Welsh & Katz, an
intellectual property firm, contends that businesses should start
thinking about these issues earlier than most do. "Small
businesses tend to delay securing intellectual property protection
because of the expense," Cenar says. "They tend not to
see the value of intellectual property until a competitor
infringes." But a business that hasn't applied for
copyrights or patents and actively defended them will likely have
trouble making its case in court.
One reason many business owners don't protect their
intellectual property is that they don't recognize the value of
the intangibles they own. Cenar advises business owners to take
their business plans to an experienced intellectual property
attorney and discuss how to deal with these issues. Spending money
upfront for legal help can save a great deal later by giving you
strong copyright or trademark rights, which can deter competitors
from infringing and avoid litigation later.
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Once you've figured out what's worth protecting, you
have to decide how to protect it. That isn't always obvious.
Traditionally, patents prohibit others from copying new devices and
processes, while copyrights do the same for creative endeavors such
as books, music and software. In many cases, though, the categories
overlap. Likewise, trademark law now extends to such distinctive
elements as a product's color and shape. Trade dress law
concerns how the product is packaged and advertised. You might be
able to choose what kind of protection to seek.
For instance, one of Welsh & Katz's clients is Ty Inc.,
maker of plush toys. Before launching the Beanie Baby line, Cenar
explains, the owners brought in business and marketing plans to
discuss intellectual property issues. The plan was for a limited
number of toys in a variety of styles, and no advertising except
word-of-mouth. Getting a patent on a plush toy might have been
impossible and would have taken several years, too long for easily
copied toys.
Trademark and trade dress protection wouldn't help much,
because the company planned a variety of styles. But copyrights are
available for sculptural art, and they're inexpensive and easy
to obtain. The company chose to register copyrights and defend them
vigorously. Cenar's firm has fended off numerous knockoffs.
That's the next step: monitoring the marketplace for
knockoffs and trademark infringement, and taking increasingly firm
steps to enforce your rights. Efforts typically begin with a letter
of warning and could end with a court-ordered cease-and-desist
order or even an award of damages. "If you don't take the
time to enforce [your trademark], it becomes a very weak
mark," Cenar says. "But a strong mark deters
infringement, wins lawsuits and gets people to settle
early."
Sleep on your rights, and you'll lose them. Be proactive,
and you'll protect them--and save money in the long run.
Steven C. Bahls, dean of Capital University Law School in
Columbus, Ohio, teaches entrepreneurship law. Freelance writer Jane
Easter Bahls specializes in business and legal topics.
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