- Securing Intellectual Property Could Secure a Company
- June 17, 2003
- Law Firm: Munsch Hardt Kopf & Harr, P.C. - Dallas Office
We are now in the 21st century. The economy is in a tailspin. Technology stocks have reached lows we never thought possible just last year. Now, many companies are faced with finding value in their companies where there appears to be only debt. Well, there is value to be found in most companies and it is simple to measure, protect and keep.
Lets take a step back for a moment. What are intellectual property assets? They are patents, trademarks and copyrights. I like to describe intellectual property as property of the mind. Better yet, intellectual property is simply your mind's work. Because we often take our creative work for granted, we do not value it in terms of a company asset. Interestingly, we do value the property that we can see, touch and fell, e.g. real property. The purpose of this article is to give you some simple, easy steps to incorporate into your company that will help you value and maintain your company's collective mind's work.
Each of form of intellectual property protects different aspects of a company's creativity. Patent law protects new, useful, and nonobvious, processes, machines, manufactures, compositions of matter, and new uses of any of the foregoing. Patent law allows the owner of a patent to prevent others from making, using, selling, or offering for sell its invention for a period of twenty years from the date the application for the invention was filed. More often than not, a company will have amassed a body of work that allows it to do something that has not been done before. Patents protect that body of work. They also protect the company's market and provides the company with a means to secure its future.
A trademark is any word, name, symbol, color or device or any combination thereof, that is used by a manufacturer or merchant to identify its goods and distinguish them from those sold by others. A service mark is a type of trademark, which identifies the source of services as opposed to the source of goods. In short, a trademark is a mean through which company is identified by the public. Most companies put a substantial amount of time, money, and effort into selecting the trademark that best represents who they are and what they provide to the public. Companies also spend a substantial amount of time, money, and effort building the publics' confidence in its goods or services. It is this confidence or goodwill that creates the value in a trademarks. At the end of the day, a trademark symbolizes the quality of your goods or services to a potential purchaser.
A copyright is an original work that has been fixed in a tangible medium of expression from which it can be perceived, reproduced, or otherwise communicated. This definition does not include ideas, procedures, processes, systems, and methods of operation, concepts, or principles. Copyrights for most companies come in the form of manuals, software, and graphic computer interfaces that are associated with their goods or services. While the Copyright Act defines who owns the copyrighted work, the best method to insure ownership is to secure an assignment of all works created by an employee at the time the employee starts to work for the company.
Okay, so what should your company do to protect its intellectual property. The easiest step to incorporate into your company's procedures is to register your copyrights and trademarks. This can be done on-line at the United States Patent and Trademark Office's ("PTO") web site at www.uspto.gov. The PTO's site is a wealth of information. It will explain your rights and provide you with forms and guidelines on how to register your copyrights and trademarks.
With respect to inventions, I encourage you to incentivise your employees to record their research and development efforts in notebooks. If, after they complete their development, they believe that they have created something that is new and useful, the employee should submit a written report to the company explaining, in detail, what they have invented. The employee's report may then be submitted to a patent attorney for evaluation and preparation of a patent application, if necessary. The most important means to protect your intellectual property in the 21st century is to get everything in writing. Start with an employment agreement that assigns the employee's intellectual property rights to the company. If you forget this step, the employee, not the company, may own anything created by the employee. However, for existing employees or others who have not assigned their works to the company, it can be argued that their work was within the course and scope of their employment and, thus, the company owns the work. Also, make sure that any deals that relate to the intellectual property are in writing. This includes agreements to use, make, sell, or offer to sell the copyrighted, trademarked or patented property. Therefore, when the time comes to place a value on your company for purposes of potential purchase or sale transactions; inter-company transfer pricing; joint ventures or partnerships; corporate reorganizations; recapitalizations; or restructurings your intellectual property will be prepared for financial evaluation. These simply step may also help your company to avoid litigation or disputes regarding the disposition of your valued intellectual property assets. If proper records are maintained, your intellectual property will be secure and its value will be intact. By following these steps your company's intellectual property will remain one its key strategic asset well into the 21st century.