business builder law
You can protect
intellectual property
without a lawsuit
by Lora Esch Mitchell and David West
Your company may have spent decades developing the inventions and trademarks that characterize the company. It only takes a moment to steal those assets if they are not properly protected.
The best approach is to develop a strategy to protect your intellectual property (IP) before you start doing business. A lawsuit can be less effective than developing a proactive IP protection strategy, and, of course, it’s far more costly and time-consuming.
Patent protection is the first IP strategy most people think of. However, there are other types of intellectual property protection, some of which require little investment of time or money.
For example, copyright and trade dress protect non-functional features of a product. If you have a product with an interesting or recognizable shape, it may be subject to copyright or trade-dress protection. Such protection can prevent a competitor and others from copying or knocking off your configuration as a means of hijacking the goodwill or recognition you’ve developed for your product.
Smart companies have formal procedures dictating what internal steps are to be taken when developing new products. These can include design review and marketing assessment. Such procedures are a good idea because they help ensure that proper steps of product development are consistently followed. Wise management ensures that intellectual property review is included in the overall procedure.
During an intellectual property review, product information is typically sent to in-house or outside legal counsel. Counsel can review the product information for possible intellectual property protection, including copyright, trade dress and patent. An advantage of having the review is that the product can also be evaluated for possible infringement of other companies’ intellectual property.
Register trademarks
A well planned portfolio will likely contain several types of intellectual property. Perhaps the most common are trademarks. Trademarks are the names, logos and tag lines that identify your business or products and distinguish them from other businesses and products.
While you can acquire rights without registering your trademark, registration is a relatively simple process that gives you broader rights.
Depending on the nature of your business, you might also take advantage of copyright protection. Most people think of paintings and musical compositions when they think of copyrights, but copyright protection is much broader than that.
It can cover software, architectural works, Web sites, brochures, photographs, and anything else that contains original, non-functional expression. Of the available legal protections, copyrights are the easiest to get. Although not required, it is a good idea to register your copyright because registration will afford you additional rights. The filing fee is $30, and the process takes from two to six weeks.
Several different types of patent protection are available. Utility patents protect original inventions in many fields, including mechanical, chemical and electrical. Business method patents cover a unique way of doing business, such as a new way of processing orders. Another type of patent, the design patent, protects the unique appearance of a product or device.
Last, but not least, are trade secrets. A trade secret is a method, formula, recipe or other information that is not known to your competitors and that gives your company a competitive advantage.
You don’t have to register with the government to protect trade secrets, but your company will need to take intentional steps to keep the trade secret private. For that reason, it is important to have policies and protections in place to keep your confidential information confidential.
Contracts are best
Non-disclosure and confidentiality agreements are key for maintaining control of products while they are in the development stages. Written contracts are the best protection when you share your inventions and ideas with employees and potential business partners.
Protecting intellectual property can be crucial to your company’s success. When confronted with encroachment on your intellectual property rights, it is often advisable to talk to a lawyer. Depending on the nature of the infringement, your lawyer might recommend several different approaches. Often, the first step is a cease-and-desist letter informing the infringer of your rights and demanding that the infringement stop.
If you discover that an overseas company is importing counterfeit products, or products that bear a trademark that infringes on one of your trademarks, litigation can be a daunting prospect. Additionally, once the infringing products enter the United States, you may not be able to stop them from reaching consumers. If you record your registered trademark with U.S. Customs, the agency will seize infringing products at the borders, thus preventing them from reaching domestic consumers.
Be vigilant
Successful products often lead to knock-offs or similar products bearing similar trademarks to the successful product being sold in the United States and abroad. Sometimes the same product with the same trademark is sold without authorization in other countries. Unfortunately, companies have discovered that sometimes these problems can be traced to their own foreign manufacturers or distributors.
Be vigilant when using overseas manufacturers and distributors, and find reputable firms for manufacture and distribution. Then make sure that you have secured sufficient intellectual property protection, both domestic and foreign, before discussing new products with foreign contractors.
Many countries award exclusive trademark rights to the entity that first obtains a national registration. Some foreign contractors have obtained such registrations, to the detriment of the original U.S. owner. You also can help guard against the misuse of your intellectual property by your foreign contractor by employing specific contractual provisions and by closely monitoring the relationship.
Industry trade groups can be a good source of information on how to protect your intellectual property. They can also help warn other companies in your industry about infringers and provide education on how to deal with them.
As a last resort, you may need to file a lawsuit. In appropriate cases, the court will grant an injunction and stop the infringement while the case is pending. The court also has the power to order a raid and seizure of counterfeit goods and to award money damages resulting from the infringement.
Of course, speak with experienced attorneys before making a decision.
[contact] Lora Esch Mitchell is chair of the intellectual property litigation practice group and David West is an intellectual property attorney at Fredrikson & Byron in Minneapolis: 612.492.7000; lmitchell@fredlaw.com; dwest@fredlaw.com; www.fredlaw.com
