• What Does Intellectual Property Mean to a Small Business?
  • September 27, 2013 | Author: Donna Ray Berkelhammer
  • Law Firm: Sands Anderson PC - Raleigh Office
  • Intellectual property is “inventions of the mind:” inventions, literary and artistic works, and symbols, names, images, and designs used in commerce to identify the owner as a source of goods or services. But what does this mean to a small business?

    Take a restaurant for example. It has a name, logo, an original outer-space theme and decor, proprietary recipes, a menu with custom artwork, a custom-designed point-of-sale system that helps maintain competitiveness, a dynamic, proprietary server training and motivation system and a mop system that reduces cleaning time and improves germ-killing. All of this is the intellectual property of the restaurant.

    Name and logo: Names and logos are trademarks. They allow customers to pick your restaurant over competitors because of the quality of food and service. Think about the different experiences and impressions between McDonald’s restaurant and Only Burger restaurant. If you want to walk into a restaurant anywhere in the world and know the food experience will be exactly the same, quick and cheap, you would go to a McDonald’s. If you want locally-sourced, antibiotic, hormone & steroid free beef ground daily by a local butcher, made fresh to order, you would go to Only Burger. The names and logos of these restaurants would help you determine which hamburger suits your needs. The name and logo - your trademarks - are valuable assets to your business. Protecting your trademark can help you shut down someone who uses a confusingly similar name that might divert your customers.

    Decor: If the decor (or product packaging) is sufficiently distinctive, and not merely functional, it may function as a trademark, and may be registered federally. When the packaging of a product or decor of a restaurant is protectible, it is called “trade dress“. Trade dress may include features such as size, shape, color or color combinations, texture, graphics, or even particular sales techniques.

    Recipes: Many restaurants have signature dishes. The recipe can be a trade secret, if the company gets a competitive advantage from keeping it secret and takes appropriate steps to maintain the secrecy. Trade secrets can be any formula, pattern, device or compilation of information which is used in a business, and which may give an advantage over competitors who do not know the trade secret. A trade secret may be a formula for a chemical compound, a process of manufacturing, treating or preserving materials, a pattern for a machine or other device, a special process for customer service, or even a list of customers.

    To protect a trade secret, you need to take reasonable steps to protect the trade secret. This usually includes limiting copies, passwords, locked physical files, no electronic formats, and limited disclosure and nondisclosure or confidentiality agreements. The exact protections will depend on the nature of the trade secret.

    Artwork: Any original artistic or literary work that is written or recorded automatically gets federal copyright protection. While it is a great idea to register important works, it is not required to stop people from improper copying. Copyrights provide the owner with the exclusive rights to copy; distribute/sell; display; modify or create derivative works; perform; and in the case of sound recordings, to perform publicly by digital audio transmission. If your business is dependent on original works, you should register them and actively stop people from improper copying. There might even be a revenue stream from licensing.

    Software: Software can be protected by patent, copyright or trade secret. Businesses that develop valuable software systems should contact an intellectual property lawyer early in the process to determine the best means of protecting this valuable asset.

    Training: A training method potentially could be a business process that is subject to patent or trade secret rights. It might also be great marketing feature or way of keeping the best staff.

    Invention: Patents protect useful machines or processes that are new and not obvious. They do not protect abstract ideas, laws or products of nature, natural phenomena, unapplied concepts, pure algorithms, or purely mental acts. If you think you might have a patentable invention, it is essential to seek patent counsel as early as possible, as there are strict time and nondisclosure restrictions that could affect your rights.

    Generally, the earlier you identify and protect your intellectual property, the more valuable it will be to your business.