Articles
An Intellectual Property Primer
June 1, 2004
Intellectual property rights are key business tools that can enhance profit margins, market share, and name recognition. With many companies, particularly the so-called "new economy" companies, intellectual property may be the most significant asset, if not the only asset, that a company may have. Without these intellectual property rights, companies with financial clout or superior distribution channels may copy your approach and take over your market. Understandably, investors also like to see business plans that include provisions protecting and exploiting these intellectual property and proprietary rights. In addition, rights to intellectual property can be licensed, assigned, or sold, thereby providing the intellectual property owner access to manufacturing capacity, access to markets, or access to the financing necessary to exploit the intellectual property in a productive and profitable way.
There are four major categories of intellectual property protection:
- patents
- trademarks
- copyrights
- trade secrets
Each type of intellectual property has a specific function and provides a different kind of protection. Thus, each type of protection should be considered and used where appropriate. In some cases, protection may be available in one or more categories. For example, computer software may be eligible for protection under patent law and/or copyright law and/or trade secret law. Other forms of protection exist for confidential and proprietary information, know-how, moral rights, and other "intellectual" or "intangible" assets that may be valuable to a company or individual.
You may already know that you are the most inventive and creative person on the planet, perhaps even the universe. Unfortunately, you may not have the resources or the desire to build a manufacturing plant, or you don't know much about marketing and product distribution, or any other number of factors may stand in the way of getting your product or idea into the marketplace. Relax! You may still be able to realize your dreams of untold riches because any of the above intellectual property rights (patents, trademarks, copyrights, trade secrets, confidential information, and know-how) can be licensed, sold, or assigned. You could then sit on the porch and collect your royalties, or licensing fees, or both. In addition, if you really want to build your own manufacturing plant, intellectual property can be used as collateral to secure financing from banks, financial institutions, investors, and venture capital firms.
