Intellectual Property Protection for Small Businesses

Intellectual Property Protection for Small Businesses

Next Insurance Staff
By Next Insurance Staff
Jul 28, 2019
7 min read

Intellectual property and intellectual property protection are terms you’ve likely heard, whatever your field of expertise. Of course, how relevant they are to you and your business, depends primarily on your particular line of work. That being said, regardless of what you do, they are interesting concepts to examine, and something always worth understanding. And, as we'll soon see, their reach can often be further than we think.

So what is intellectual property in a nutshell? Basically, you might say, it is any invention or work that you have created. It can be something truly creative like a manuscript you wrote or a company logo that you designed. Or it can be something functional like a medical device you developed or as obscure as a grape cutter you devised.

But being the creator is not enough. You need to be legally recognized as the owner of this discovery, innovation, idea, device, contraption or product, in order to have the rights to it – i.e. the ability to mandate its use and sales. For this, you can apply for a copyright, patent or trademark, depending on the nature of your creation. You can do this on your own, or hire an attorney that specializes in intellectual property to help you out, as a kind of consulting insurance if you will, as they're likely best equipped to navigate the process. There's also a fourth category of trade secrets to keep in mind. So when it comes to intellectual property protection we’ve got:

  • Trademarks
  • Copyrights
  • Patents
  • Trade secrets
The next question is, how do these apply to you?

Who Needs to Worry about Intellectual Property Anyhow?

As mentioned, not every business has intellectual property to protect. In fact, if you’re a gardener, yoga teacher, or barber going about your regular business you probably don’t have to consider it at all. That is, unless you’re doing something that is provably new to your line of work. For example, if you’re a hairdresser who has come up with a totally unique hairstyle or a novel way way to straighten hair, you may have intellectual property on your hands. Similarly, if you’re a yoga teacher that has developed a completely original set of poses, again, IP might have something to do with you.

Other professions and their byproducts are a bit more clear. Or are they? For example, if you’re a freelance graphic artist and design company logos, there may be a question as to who owns the rights to the logo, or any drafts you developed in the process. Usually you'd have a contract with your client to determine this, and if they're yours, then royalties would go to you. Now what if you’re working in-house instead of freelance? Who owns the rights then? Your employer or you? The answer here is usually your employer, but you get the drift. Intellectual property law and who needs it can get pretty complicated, which is why it’s become such a prosperous legal field.

Also keep in mind, that while you might not have intellectual property to protect, you always need to be wary so as not to misuse someone else's. In fact, that's why many business owners have some sort of intellectual property insurance wrapped into their liability policy, as these kinds of mistakes can certainly happen.

How to Protect Intellectual Property Online and Other Challenges

When it comes to intellectual property protection there are a number of challenges any business faces. To begin with, it’s important to learn your rights as an intellectual property holder. For example, you have a local judiciary system in place to help you out, as well as a branch of the U.S. Department of State that enforces intellectual property rights internationally.

As for the challenges themselves, they are numerous. From the get-go, it’s a mad race to official recognition either with a patent or a copyright, before someone else "steals" your idea. Also, IP laws differ from country to country and so you may find you need to file in each country in which you operate. And if you find someone is using something that you recognize as yours, it’s not always easy to prove. In fact, legal proceedings can be long, tedious, and financially draining. Furthermore, in the digital age, it is exceptionally hard to keep track of ideas bouncing around. So even with strong copyright and intellectual property rights, tracking down, let alone catching every perpetrator can be a full time job.

That being said, if you’ve invested in coming up with a great idea, you deserve intellectual property protection. So what can you do?

Tips for Intellectual Property Protection

There are a number of things you can do to help protect your intellectual property. A few of these include:

  • Patent intellectual property – For many people, owning a patent is a point of pride. A sign of success. But more than that, a patent can be a very useful form of intellectual property protection. It legally gives you the right to prevent others from manufacturing, copying, importing or selling your IP without your permission. This is great for your sales potential as well as potential royalties and licensing. The downside? There is a lot of time consuming, rather tedious paperwork involved, and it comes at a fee. Plus, you have to file in every region where you want to protect your rights. And since your paperwork must be detailed, your competitors get a pretty good glimpse at your inner workings. In other words, you may end up inadvertently revealing trade secrets.
  • Strict contracts and non-disclosure agreements – Another tactic you can use to protect your intellectual property, especially in terms of trade secrets is to have employees, consultants and other service providers sign strict contracts and non-disclosure agreements. While an NDA is not always 100% binding, it is a popular contractual manner to prevent the sharing of confidential knowledge, materials, or information with any third-party.
  • Business insurance – While business insurance is primarily about protecting your business from property damage and the people who come in contact with it from bodily or material harm, it may also cover intellectual property in the form of copyright and trademark infringement. This type of protection usually falls under your personal and advertising injury coverage. But keep in mind it may only cover the damages you’ve potentially done to another business, rather than vice versa. So make sure to check.
  • Attribution – Just like you don’t want someone else using your intellectual property without permission, it’s important not to use theirs. That means, if you’re quoting a source or using someone else’s thoughts, you need to attribute them accordingly. In other words, give them the full public credit they deserve, and expect the same in return.

Bottom line

Bottom line, if you have invested in creating intellectual property, make sure to give it the protection it deserves. That means filing for a copyright, patent, or trademark as needed. Similarly, make sure to respect other people’s intellectual property as well. It’s the polite thing to do, and more importantly, it's the law. In other words, adhering to intellectual property protection makes for better business, period.

Intellectual Property Protection for Small Businesses


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