Intellectual property, or IP for short, is a broad term that refers to all the intangible assets that are owned and protected through legal means by a company or person. In simple terms, intangible assets are those non-physical in nature. They’re either the IP holder’s creation (designs, music, movies, fictional works, computer programs etc), or someone else’s, that the current holder acquired and now legally owns. Through this process, the former owner also willingly gives up their right to any benefit (financial or otherwise) the IP brings. More or less, that’s what intellectual property is.
What Is Intellectual Property – The Basics
IP is protected by law thanks to the consideration that it’s just as important as tangible assets (cars, computers, industrial machines etc). Every economically developed country has some form or another of IP laws. They serve to protect individuals and organizations from having their intellectual products stolen, or used without their consent. Other terms you might be more familiar with that represent this concept are: patent, copyright, trademark, and trade secret. All of them have the same purpose, which is allowing individuals and companies to earn renown and remuneration for innovations or improved iterations.
When used properly and without ill intent, the 4 maintain a balance between public interest and the IP holder’s financial gain. They also safeguard and foster creativity and bright ideas.
If you’re just looking for an overview, these are the takeaways you should remember:
- Intellectual property (IP) isn’t a “thing” in itself; it’s a broad term that encompasses intellectual creations like slogans, logos, designs, fictional characters, product or company names etc.
- IP can belong to individuals, but is usually owned by companies.
- IP is always owned by someone legally (if registered with relevant authorities), and that “someone” has the right to pursue legal action against or to otherwise prevent or defend against the unapproved use of their IP by a third party.
Why Is Intellectual Property Important?
Year after year, companies worldwide are becoming more and more IP-centric. The digitized world of today is knowledge-based, and if you can provide the knowledge that’s being searched for, you’re in for great financial gain. Likewise, IP can also be an intangible product that’s in high demand by a target group (comic book stories, computer programs, a particular genre of music etc). The holders of such IPs are naturally inclined to protect their creations from unauthorized use, so that they’re the ones profiting from their hard work.
If a third party makes use of IP that they don’t legally own, they can obtain an unwarranted competitive advantage or straight-out revenue. It isn’t uncommon anymore for quality IPs to generate more income (or at least as much) than tangible assets such as “classic” heavy industry machinery.
IP protection is also important because it’s the result of 1 or a group of people’s work. Without the proper measures in place, anyone can take credit for and receive the merit for that IP.
The Various IP Types
In short, IPs come in 4 main variants, and 2 other ones, more minor in importance. We also have an article covering the types of intellectual property in detail, but here’s a quick rundown.
Patents* and utility models are given to inventors by government agencies (typically). These give exclusive IP rights to the invention, which can range from technological innovations to process improvements or creations. Any physical inventions can be patented (even toys), but you’re patenting the idea, the blueprint, not the physical realization itself. Utility models are given to those IPs that are a technical solution for any industry (even a new type of ingenious ladder design).
Copyright rights are provided to authors or other types of people that are creating an original work. This can be literary, artistic, musical, a software program (some are patented instead though, depending on their complexity and scope) etc. As long as you created a unique material and you register it, you’re the only one who has the right to use, copy or distribute it as you see fit.
Trademarks are physical representations of a company or one of their products. The easiest example is the “Coca-Cola Company” owning the “Coca Cola” beverage trademark. Any other entity is forbidden from using the “Coca Cola” name or logo. Trademarks can also be phrases, like the motto of a company (Nike’s “Just Do It”), and they legally separate one product from another. Product designs can also be trademarked.
Trade Secrets are a company’s unique way of doing something, which is usually the result of research and (sometimes) development. KFC’s “secret 11 herbs & spices” are a trade secret because they’re used to give the organization a competitive and economic advantage over its rivals, without officially being public knowledge. Trade secrets are closely guarded and potentially even differentiate one brand from another, providing customers with a special experience or product.
Industrial design is a strategic user-centric mindset of developing or improving new products, services and systems. These can better the quality of life of a company by innovating procedures, or create a better future for the wider public through new means of transportation. The scope can be as big as the idea. Its core idea is creating opportunities from problems.
Franchises are an “in-between” IP, and what we’d describe as renting proprietary knowledge above. In short, a franchisor agrees to give a franchisee access to its industry specific information, tools, processes, products or services. The franchisee (which is a smaller business) pays an upfront fee and regular licensing fees (like a subscription) to the franchisor for this access. However, franchisees aren’t allowed to share these secret IPs outside of their organization.
*Unlike other IP types, patents have expiration dates. After those (typically) 20 years have passed, the invention is considered public property. This is why companies tend to assign a numeric value for their patents. Each year, this value decreases, as the company’s timeframe of exclusive use of the patent is slowly coming to an end. The process is named “amortization” in economics. In short, it legally reduces the company’s profit margins or net income. In turn, the company’s taxes are also reduced.
More Information On Intellectual Property Rights (IPR)
All of the above forms of IP protection give their holder exclusive rights to the use, copy and distribution of their IP. If you’re looking for a simpler segmentation, it would be something like this:
- Copyright-related rights
- Industrial IP rights
These serve authors of written or artistic works. Think of movies, books, paintings, orchestral themes, computer programs, website designs. The rights are in place for all of the author’s life, and generally for another 50 years after they pass away.
Copyright also protects the creators of sound recordings, performers (musicians, actors, singers), and broadcasting stations (TV, radio, podcasts, the like). In other terms, copyright applies to creative works, and it’s an incentive to create something unique of your own, because it’ll be legally safeguarded.
IPR protection in the industrial sector is aimed at both parties involved in a transaction: the company and the consumer.
The trademarks we explained above are there for the consumer’s interest. They stop brands from identifying as other organizations, such as using unauthorized logos, or trying to sell products or services not in fact theirs. In turn, consumers get to naturally associate brands with their particular signs and other differentiating factors, so that they can make informed transactions. Trademarks don’t expire unless the distinguishing elements aren’t unique anymore.
On the flipside, patents, industrial designs, and trade secrets are there to provide a safety net for organizations. This stimulates the creation of new technology by directly rewarding innovation, which in turn makes backing research & development more appealing to investors. Industrial rights are also a driving force behind licensing/franchising and joint ventures.
9 Tips To Keep Your Intellectual Property Safe
It’s important to note that not everyone is out to get you, but some people are 100% trying to steal your IP. Why? It’s way easier than coming up with something original. Especially if your company doesn’t have the proper safety measures in place. Instead of making their own creative IPs or investing into R&D for the development of an industrial idea, some parties will choose corporate espionage or buying competitive intelligence.
If your information has become public knowledge, to put it short, it’s going to stay that way. In our digitized age, nothing’s ever completely deleted from all databases and sources. If only your competitor has it though, and they’re closely guarding it themselves, hope’s not lost there. While it’s an extremely complex process which involves investigative work both in the field and in the office, it’s removal can be done. The infringing parties can be brought to justice legally, and your private information removed from the hands of someone who would otherwise cost you lots of revenue and who can sell it to more people.
At Toltec, we’ve already done this many times over the course of 20 years, and we’ll gladly handle your company’s case too. If you need professional IPR investigations, call us today at (727) 403 – 1129. If your information is still safe & sounds though, here are 9 ways to keep it like that.
1. Always keep track of all your intellectual property
You can’t protect your IP if you don’t know its full extent. To ensure that all company members are aware of all the intellectual property you have, executives should meet at least quarterly, and communication about what’s happening and when it’s happening must flow continuously. A lot of this responsibility will fall on designated intellectual capital overseers in your company, but don’t think they can secure your processes on their own.
If your whole team isn’t on the level (CEO, HR, marketing, sales, R&D, legal, COO, CSOs, production), intentional or unintentional leaks can occur quickly and covertly.
2. Check all IP storage locations
Your IT systems are definitely holding a lot of IP that mustn’t get in the wrong hands, but don’t ignore other common spots.
- Your company has potentially tons of input and output devices (I/O) that employees are using regularly. Printers, fax machines, USB sticks, external drives, graphic tablets etc. All of these store information, and sensitive data must be purged regularly. They can also be interconnected with other devices or networks.
- Intranets and other types of local area connections are another easy way for information to disseminate fast, but also for leaks to spread fast. You can’t be 100% sure what reaches who.
- Using cloud services to save sensitive information isn’t recommended either, as be it your own system or an IT company’s, it’s still hackable. It just needs a handful of people with the right skill sets. This is no reason for constant paranoia, as again, not everyone’s out to get you, but better safe than sorry.
- Restrict your personnel from sending IP-related data to their personal devices. They might be wanting it for innocent reasons, but it’s an inherent risk to have your IP where it doesn’t belong.
- Sometimes, because of contracts, obligations or necessities, you need to share an IP with a business partner. Make sure your legal team drafts rigorous terms about how the IP must be protected. In case it isn’t, you’ll have the upper hand and will be able to take action immediately.
3. Watermark everything IP-related
Do you have printed or digital documents with proprietary information on them? Login screens that lead to sensitive data? Place your logo or other company branding on each of them. Don’t disconsider this, because if you happen to go to court, it’ll be harder to prove that a sheet of paper with no trademarks on it was supposed to be confidential.
4. Do a risk assessment for your IP
You probably have multiple IPs, and they aren’t all equally valuable to you. Determine which will generate the greatest profit or revenue, and if it’s also the one at the greatest risk of theft. This can be a straightforward way of prioritizing where to spend your protection budget.
5. Make sure your employees understand IPR
Prevention always beats dealing with the problem after the fact. Firewalls and legal measures for your actual IPs are all fine and recommended. They won’t do much though if the people who are actively working with those IPs daily aren’t trained to safeguard it. Engineers, scientists and personnel assigned to creative tasks are usually passionate about what they’re working on. Moreso, they’re proud of their achievements, and when you’re proud about something, you want to talk about it.
Without proper awareness on the cruciality of IPR, your employees can be unwillingly negligent and leak important data. This happens most of the time too. According to Egress’ 2019 data privacy report, there are a few IP breach methods way more common than others:
- 51% of leaks happen through personal emails
- 46% of leaks happen through corporate emails
- File sharing services and platforms like Slack are also top “competitors”, both being a means to leak data in about 40% of cases
And that’s just one leak. There’s no way of knowing who the information will reach from that point onwards.
6. Be mindful of your physical IP documentations
While the “trend” nowadays is to obtain information illegally through online means, stealing a piece of paper is way easier. Keep those drawers or rooms under lock & key and, if possible, vigilant surveillance. Limit access to critical personnel or for legal purposes only.
7. Use encryption & tracking tools for your IP
Many security suites will have data loss prevention (DLP) options. These can track who is using a document, what they’re doing with it, who they’re sharing it with and so on. Another good practice is demanding the encryption of any IP before it’s sent to an external source, or even another internal source.
If you use internal encryption too, take that extra step and inform your employees that it’s not because you don’t trust them, it’s to prevent accidental leaks or hacks. It’ll help with morale.
8. Keep watch for “accidents”
An employee accessing a file they don’t need for work purposes or looking at documents outside of their department can be written off as isolated incidents, even accidental. But if you collaborate with your corporate security and IP security and piece it all together, you’ll see the bigger picture: willful attempts at a confidential information breach. Corporate espionage and insider trading are very real. While you don’t need to have an “everyone is a suspect” mentality, you must be aware that each department member poses a certain level of risk (acceptable or otherwise).
9. Adopt an espionage mindset
Counter-intelligence is one of the best ways to combat information theft. You know your company best. If you were to try and steal IPs from yourself, how would you do it? What are your system’s weaknesses? What’s most exploitable? Which people don’t seem to be that trustworthy or could be bribed? Start assessing risks from the viewpoint of someone who wants to take advantage of your infrastructure.
In Need Of IPR Investigations?
At Toltec, we’re experts at IPR investigations and other brand protection facets. We’ve already been in the business for 20 years, and worked in close tandem with fortune 500 companies to safeguard their IPs and reputation.
Intellectual property (IP) is a broad term that refers to all the intangible assets that are owned and protected through legal means by a company or person.
We hope we’ve provided all the knowledge you need to understand everything there is to know about what intellectual property is. If you think your own IP is at risk or know for sure it has already been compromised and don’t know what to do, get in touch with us today.