Sheema Khan is VP, Intellectual Property Strategy at Stratford Managers in Ottawa.
So what exactly is “IP” and why is it so important?
Perhaps the operative word in IP is “property” – a tangible asset that implies ownership, rights, value and commercialization. The “intellectual” part simply implies that the property is not land-based or bricks-and-mortar, but rather, springs from creative ideas.
More importantly, IP is useless unless it is properly registered with the relevant granting authority, thereby legally establishing you as the rightful owner of your IP. If your idea has high commercial value, others will try to copy it and cash in on your hard work. As a registered IP owner, you have legal rights to prevent others from claiming your IP as their own. However, without proper registration of your IP, you leave yourself open to financial loss and encroachment.
Sometimes, there may be no need to register your IP. For example, if your idea has little commercial value/potential, it may not be worth it to spend the legal fees to secure IP rights. Another example is when the idea has huge commercial value but is impossible to copy or reverse-engineer. In this case, details of the valuable idea are kept under wraps through legal contracts with employees. A final example is that of the altruist, who wishes to freely share her idea with the world.
Read More: Natalie Giroux on why companies need intellectual property strategies.
As with property development and management, you can further develop (or “scale”) your initial IP through commercialization, expansion, licensing (akin to leasing), and/or sale. In addition, there are different ways (or “tools”) to protect your IP. Depending on the nature, size and stage of your business, your IP portfolio will include a diversity of such tools that evolve over time. A few are discussed below:
- A copyright is the exclusive, legal right to produce, reproduce, sell, license, publish or perform an original work (or a substantial part thereof). Anyone who wishes to use or copy the work must ask permission and/or pay the copyright holder. Works can be literal (e.g. books, web pages and software code), artistic, dramatic, musical, sound recordings, communication signals and performances. Copyright protection automatically begins upon creation of the original work.
- A trademark serves to distinguish your product or service from the competition. It is a valuable business asset since it defines your brand. It can include a word, a number, packaging, sound, a design or any combination thereof. Once registered, you have the exclusive right to your trademark by preventing others from copying it. For example, Starbucks sued a Bangkok street coffee vendor that operated under the name Starbung, complete with a modified Starbucks logo.
- The industrial design right protects the visual features of a finished product. It can be an ornament, a pattern, a shape or any combination of those. For example, there are about 50 different registered designs related to blades and shafts of hockey sticks. Icons on your smartphone are another example of an industrial design.
- A trade secret derives its value from secrecy. Examples include hidden recipes, ingredients and formulas; algorithms secured in the cloud; and customer lists and data. Care must be taken to make sure the details are not disclosed to the public. Unlike other forms of IP, trade secrets are not registered.
- A patent provides you with the exclusive right to prevent others from making, selling or using your invention for a limited period of time. In exchange for this limited monopoly, you must teach the public how to make your invention, thereby contributing to the overall public pool of knowledge (contrary to a trade secret). A patent is granted for a new process, machine, product, composition of matter, or an improvement thereof. The invention must be new, useful and inventive. Pending and granted patents are quite valuable for obtaining financing, providing a revenue stream through licensing and being sold as part of a larger deal.
For example, if you devise a new type of fibreglass composition for hockey sticks, that provides surprising flex features, you may obtain a patent for a product (the hockey stick), composition (the fibreglass), machine (which produces the sticks) and process (of producing the sticks). You may even get an industrial design for a new shape for the stick. You can even trademark the stick logo and the business name. Finally, you can copyright the webpage for your business.