The purpose of setting up a business is to exchange goods and services for value, usually cash.

The products or services of our business emerge from ideas for how we can meet an identified need in the market. Whether the idea is novel or not, the business owner must package it in such a way that they are able to legitimately sell their product. 

Most societies will not allow a person to promote a business that is harmful to society and does not promote the advancement of that society. For example, trading in people as a commodity is illegal. 

Therefore, a product or service must be lawful. It must be one that meets the legal requirements for products and services that can be distributed and sold to the public in that society. If the product is illegal, then the business is also illegal, and the business owner will find themselves in the unenviable position of staying one step ahead of the law to avoid prosecution and losing all their gains.

So, having established that the business is lawful, the next thing any business owner wants to do is secure the products and services of the business. No person wants to be robbed of their property. We know how to deal with our tangible property, those properties that we can see, touch, and feel. We can keep them in a safe place, attach security devices to track them if they get lost or stolen, and get insurance to cover any losses. But what about things that we cannot touch and feel? Those intangible things that are integral to our business such as the very idea of the business?

A person’s business idea is their property, intangible as it is, and there are several ways to protect intangible business property that we often refer to as intellectual property. Every business person must be aware of their assets, including intellectual property, and put measures in place to secure them.

Intellectual property covers a range of rights that allow a business owner to enjoy the work of their sweat. And this is what we will cover in this module.

What is Intellectual Property?

Intellectual Property (IP), as the name implies, is a person’s property derived from their intellect. The world decided a long time ago that in the interest of the development of our societies, these things called IP must be protected by law in order that we continue to innovate, and do the IP related things that make our lives easier, and worth living. These protections are also aimed at rewarding and compensating those who put their time and effort into creating protected ‘property’ that the rest of us enjoy. There are also timeframes within which the original rights owners can exclusively enjoy the material rewards from their IP protected creations. 

Intellectual Property Rights broadly fall into three groups – Copyright, Patents, Design Rights, and Trademarks. 

Other Protectable Intellectual Property

Trade Secrets 

Trade secrets are another aspect of intellectual property. Trade secrets include your customer list, formulas, recipes, manufacturing process, and data compilations. When your business starts bringing in third parties and, necessarily, starts divulging aspects of business operations to them, you will need to protect proprietary information that you share. 

Small businesses must be mindful about how they manage information to ensure that their business secrets remain secret and stay protected. Be careful that employment and contractor contracts include the duty to keep your business secrets secret. More importantly, be careful about what information you divulge to whom. If they don’t need to know about that aspect of your business in order to help and contribute to the business, then they should not have access to it.

Guarding the business secrets is very important because the way you treat your business secrets can adversely affect your ability to claim trade secret protection down the line. If you share sensitive information about the business without outlining the recipient’s duty to hold the information in confidence, you can lose the ability to protect those secrets if they are revealed. That is why unlike other aspects of intellectual property like copyright, trademarks, and patents, trade secrets are not registered. Registration essentially betrays the secret. Basically, if you do not protect your trade secrets you lose them, because as soon as a secret enters the public domain, it is gone. Just say bye, bye.

So, if you have secret recipes, secret processes, etc., keep them secret or protect them with appropriate non-disclosure agreements.

You can read more about intellectual property in these articles:

The Basics: What is Copyright? 

The Basics: What is Patent and Design? 

The Basics: What is Trademark?

The Basics: How to Manage Your Intellectual Property

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