If yours is like most corporations in America, you own one or more trademarks, copyrights or patents. The question is, does your company value these assets properly?
Have you considered that, instead of merely a necessary evil, these mechanisms can actually generate value and profit? Surprising perhaps, but very true. If handled correctly, intellectual property can provide the necessary edge to lock out competition and catapult your business to the next level. Just follow these simple steps.
1. Recognize Your IP
To maximize the value of your intellectual property, the first step is to identify exactly what is your intellectual property. While most businesses are familiar with the concept of Intellectual Property, few recognize – and thus few protect – all their assets.
For instance, your company name may be a registered trademark, but what about your tag line? Failure to recognize the tag line as a potential trademark may result in another company taking that same tag line and using it for competing goods or services. Or, what about the nickname the public gave to one of your products? Would you be able to recognize it and protect it before your competition challenged you? Your answer to the following question will provide a basic guideline for what assets your business should protect: What asset, if taken and used by your competition, would compromise your business?
Once these assets are identified, steps should be taken to protect them. For example, if the asset is an invention on which the company depends, filing a provisional patent application may be the most effective means of securing an early priority date, while simultaneously allowing time to reduce the invention to practice and file an application.
If, however, the asset is a tag line the company uses to identify itself as the source of a particular product or service, the correct means of protection may be a federal trademark application. On the other hand, if the business owns a secret formula, or would like to protect its customer lists or proprietary financial information, trade secret protection may be the preferred option.
Whatever means of protection you choose: trademark, copyright, patent or trade secret protection (or some unique combination thereof), taking steps to register and/or utilize these protections is critical to locking out competition. Such lockout may translate to thousands of dollars saved or may be responsible for profit generation.
Making an annual IP audit part of your company’s repertoire may significantly enhance your ability to recognize new opportunities to generate goodwill. An annual audit should include working with a competent IP attorney to provide a website review, a review of advertising and marketing efforts, and an alignment with the branding and positioning goals of the organization.
2. Design an IP Management Strategy
Once your intellectual property is identified, designing and implementing a strategic management strategy are critical for maintaining and capitalizing on your rights. Whether you typically handle these tasks in-house, or choose to enlist the help of outside counsel, or opt for a combination thereof, it is important to have a system in place that specifies the “go-to” person(s) for these tasks. Many vendors provide a means of docketing pertinent dates associated with taking a trademark, copyright or patent application through to registration. If handled through outside counsel, inquiry as to which docketing system is used and the effectiveness of the same is important. Further, setting a system that monitors others’ use of the same or similar trademark or prior art (if patent) may be equally important.
Searching is another important element of any system your company sets up for adopting trademarks and patents. Different situations may require different levels of searching for identical and similar trademarks that may pose a threat if your company were to adopt the mark. Similarly, prior art searches may be considered as part of the inquiry your company makes into whether to engage in the process of obtaining patent protection. Finally, do not overlook the use of marks within domain names. If the “.com” or “.net” or “.org” is unavailable, your company should certainly explore the possibility that another party may also own the trademark the company seeks to adopt. If outside counsel is part of your management strategy, you should aim to work with counsel that satisfies the needs of your particular company. For instance, some firms provide in-house counsel 24-hour electronic access to the status of their trademark applications. If this service would be of particular use to your in-house attorneys, inquire whether your outside firm provides such a service. Whatever is most important to your company when it comes to working with an outside firm, always ask specifically for what you need, and always hire the right firm to meet those needs.
3. Use IP Correctly
Once your intellectual property assets have been identified and a management system implemented, proper use should be regularly monitored. While this may sound elementary, businesses often misuse their intellectual property. The risk of such misuse can be loss of rights and therefore, waste of resources applied to building and protecting such rights.
For example, with a registered trademark, the registration only extends to the goods and services for which it is registered. Often companies utilize the ® symbol every time the mark is used, without regard for how the mark is used. For this reason, it’s essential that brochures and web sites be included in the company’s intellectual property audit. This and other types of misuse may result in cancellation of a trademark registration and loss of rights, which in turn may negatively affect marketing and branding efforts, product development and/or corporate relations.
4. Record Your IP
Just as real property is reflected in the financial statements of a company, intellectual property assets also should be valued. Often recorded within the “goodwill” line of the balance sheet, items such as trademark registrations, copyright registrations and issued patents are valuable intellectual property. Accurate recording of such assets can translate directly into income for the business through licensing or sale of such assets, or as a piece of the purchase or sale of a business or business unit. Of course, the company must also follow all applicable requirements under the Sarbanes-Oxley Act . Proper recording of intellectual property may also take the form of protection against counterfeit goods. If properly recorded, U.S. Customs has the authority to prevent entry, detain and/or seize merchandise that violates the rights of the owner of a registered trademark. If your business is at risk of counterfeit, this type of recordation is imperative. Outside counsel with experience in this area may prove helpful to lead the company through the process.
5. Actively Enforce Your IP
When the company has taken the previous steps seriously, enforcement of intellectual property becomes easier. For example, a company whose trademark is registered and has been used correctly in the marketplace will be in a strong position to defend its rights against others in the marketplace that attempt to infringe on those rights.
Enforcement has many faces. Careful consideration must be given to whether to send a potential infringer a cease and desist letter, to initiate an opposition or cancellation action before the Trademark Trial & Appeal Board (“TTAB”), or to engage in the filing of a federal lawsuit. Often a combination of these strategies is available to a business that has taken proactive steps to protect its intellectual property.
Each method of protection has advantages and disadvantages. Depending on the facts, each should be weighed carefully. For instance, opposition or cancellation actions before the TTAB, if successful, will serve to prevent others from registering a mark that may be confusingly similar. However, it will not prevent them from using the mark in the relevant marketplace. Further, sending a Cease and Desist letter requires forethought on many levels. Examples of areas where thought is required: whether the company has the resources to engage in litigation should the letter lead there; careful consideration of the phraseology of the letter to guard against risk of ending up in an unfamiliar or undesirable Court due to the other side filing a declaratory judgment action. While many other considerations exist relative to enforcement, companies must consider the proper means of enforcement and which method best fits their resources and desired outcome.
Conclusion
Encourage your company to take these five steps in order to leverage its intellectual property assets to drive profits:
1. Recognize Your IP
2. Design an IP Management Strategy
3. Use IP Correctly
4. Record Your IP
5. Actively Enforce Your IP
While many companies object to spending resources on proactive management of their IP, these same companies may in fact spend far less in the long term than if they were forced to engage in litigation over situations that could have been prevented. Americans arguably may be the most brand conscious nation in the world. Even so, infringement suits are not limited to the U.S.
As an example, the WWF World Wildlife Fund for nature, an organization striving to protect endangered animals, recently sued the WWF, the World Wrestling Federation, in London for trademark infringement as well as breach of a prior “peaceful coexistence” agreement between the two organizations. While initially it may have appeared that both parties were actively engaged in their intellectual property rights and the two struck an agreement, the agreement said nothing about confusion based upon their virtually identical domain names, “wwf.com” and “wwf.org.” Perhaps more proactive inquiry earlier in the process may have prevented such litigation, the result of which is yet to be determined.
About the Author
Natalie A. Remien is an Intellectual Property Attorney with Bell Boyd & Lloyd, LLP. Combining years of in-house and private practice experience, Ms. Remien regularly speaks and writes on issues related to Intellectual Property. She is admitted to practice in Illinois and the U.S. District Court for the Northern District of Illinois. Ms. Remien can be reached via email at nremien@bellboyd.com or via telephone at (312) 372-1121. Additional information available at www.bellboyd.com.
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