Intellectual Property refers to the non-tangible valuable assets that you own. These assets are protected by intellectual property (IP) rights created by law. Just as you have a plan to assess and protect your tangible assets, it is important to assess your intangible assets and create a plan to protect them so that they do not lose their value. IP is a critical asset for most businesses. It is reported that IP assets represent nearly 85% of the value of the S&P 500. And, IP-intensive industries account for about 40% of the total US GDP. The bottom line is that your IP is very valuable and should be protected and harnessed for growth. The first step in managing your IP is identifying what you own through an intellectual property audit.

Intellectual Property Audit

An IP audit is an assessment of your IP portfolio to establish what you own, assess how well it is protected, and assess your exposure to liability. Every business owner must conduct an IP audit of their business and what this means is that you compile a list of all your IP assets as well as related risks. An IP risk could be, for instance, when you have asked a designer to create something for your business and do not have any agreement or documentation for ownership of that creation. If the ownership of the work created is not transferred to the business, then the business may be limited in how it can use that work. So, just as with real estate where you want to make sure that you have an unbroken chain of title, the same applies to intellectual property assets. Whatever IP assets you hold, you want to be sure that you have documentation that backs up your ownership or license to use it. When you are just starting out you can do this yourself. But as your business expands, you should have your lawyer assist you with your IP audit.

Personally, when I have used people on platforms like Fiverr to create graphics for my business, I have paid extra to have the copyright in those images assigned to my business. That way I can do whatever I want with them without fear that I will run across them in use elsewhere, associated with another business, or that I will be limited in how I can use them. And if I do find the same image in use by someone else, then I have a leg to stand on if I decide to act against the person or business using that image.

Top Business IP Matters To Keep In Mind

Just as you have to clear your business name before it can be registered to ensure that no other business with the same name exists, you have to clear the mark associated with your business to ensure it is not infringing on a registered trademark. Do not launch your brand before clearing it with the trademark office. More importantly, do not invest in any office stationery or marketing collateral featuring a mark that has not been cleared for use. The last thing you want to happen as a small business starting out is to lose money and confuse your customer at the same time.
The trademark registration symbol ® should only be used when your mark is duly registered with the trademark registry. Before your mark is officially registered, after you start using the mark and you have started the registration process, you can use the ™ sign to put others on notice about the use of the mark.
REGISTER your trademark! Use a lawyer to walk you through the process of clearance and application for a trademark. You want to ensure that this is properly done to protect your mark. Think of it as an investment in your business.
Note that trademarks are renewable. The duration of trademark validity will depend on your jurisdiction, but it’s typically between seven and fourteen years. In the same vein, right owners are responsible for monitoring and protecting their marks, so do not go to sleep after the registration.
Monitor, protect, and enforce your IP against others. Just as you would install a house or car alarm, and take care to secure those assets from possible theft, you must do the same with your IP assets. While there are regulations to protect and enforce your IP rights, the monitoring is largely up to you. You must be vigilant, otherwise, you may lose your IP rights.
Do not ‘borrow’ anything without permission, especially something off the internet. Because someone has put their IP protected work in a public domain does not mean that it is public property. It is most likely owned by someone else, so ensure that you use things from the internet in conformity with IP law.

Other Considerations And Risk Management

Work Product Ownership

Unless expressly stated by agreement, creators own the copyright in the work that they create. So, it is important to have an agreement that transfers ownership of the copyright in work created by others to your business. Many of us use the services of writers and graphic artists on platforms like Fiverr and assume that because we have paid for the work product we own it. That is a false assumption. The person who creates the work owns the work (unless the work was created under an employer-employee relationship). You can agree in the terms of service that copyright ownership in works produced by other parties be assigned to your business. In my experience, you will have to pay more for that aspect, but it will be worth it in the long run.

Transferring ownership of third-party created work to your business protects you from future claims of the creator of the work. There have been instances of businesses being sued for a share of their businesses because of works that were created by third-parties in the early stages of the business. Furthermore, if the creator still has ownership of the work then you might be limited in the way that you can use the work. So, it is better to cut those ties as early as possible and have a document that expressly transfers the ownership right in that work product to you or your business.

Liability From Third-Party Created Work

You want to shield yourself from liability arising from the actions of someone employed to help your business. For instance, if a graphic artist infringes on somebody’s intellectual property while creating work for you, you will need to defend against any infringement action taken against your business. Indemnification from the graphic artist will provide you and your business some security against legal liability for the actions of the graphic artist. Basically, with an indemnification clause, the person you hire promises to cover your losses if they do something that causes a third party to sue you, or compensate you for any loss you suffer as a result of their actions.

You can read more about intellectual property in the articles:

The Basics: What is Intellectual Property?

The Basics: What is Copyright?

The Basics: What is Patent and Design?

The Basics: What is Trademark?