This article appeared in the September 2019 issue of MiMfg Magazine. Read the full issue and find past issues online.
Identifying and protecting your company’s intellectual property (IP) is likely the most vital step your business will take to securing its future success. Consider the following:
- IP-intensive industries account for 38% of our nation’s GDP and support over 27.9 million jobs
- Theft of IP costs the U.S. economy nearly a quarter trillion dollars annually — $180 billion from loss of trade secrets, $29 billion from displaced legitimate sales due to counterfeit and pirated goods, and $18 billion from pirated software
Here’s the bottom line: IP is critical to the success of any business and central to supporting the U.S. economy.
The four core IP areas every manufacturer should know are patents, trademarks, copyrights, and trade secrets. Each can prove to be an invaluable asset for a manufacturer and an essential part of developing and protecting new products. IP is a keystone to remaining competitive at home and overseas.
Let’s look at each of the four core areas of IP:
- Patents protect an invention offering a novel and non-obvious solution to a technical problem. A patent grants its owner a 20-year right (15 for a design patent) to prevent others from making, using, selling, or importing what is protected by the patent. A patent is owned by the inventors unless assigned to someone else such as the inventors’ employer.
- Trademarks are source identifiers – they associate goods and services with your business as a source. Trademarks allow a business to capitalize on its brand’s goodwill and prevent others from using confusingly similar brands. A company can keep a trademark alive for as long as it is selling the goods or services associated with the trademark. Unlike a patent, it is not a requirement to register a trademark, but it can be advantageous.
- Copyright protects the expression of an idea in an original work, but not the idea itself. The author owns the copyright unless it is a “work made for hire.” It is not necessary to register a copyright, but it is required to obtain registration in order to file a lawsuit seeking damages as a result of infringement. A copyright lasts for the life of the author plus 70 years, or if it is a work made for hire, it will last for 95 years from publication or 120 years from creation, whichever is shorter.
- Trade secrets protect confidential business information that has value and gives a competitive advantage by virtue of its secrecy. Examples include customer lists, pricing sheets, business plans, and technical information (processes, formulations, technical drawings showing dimensions and tolerances). Trade secrets are protected by both state and federal law. A trade secret can last forever as long as it remains a secret.
What should a manufacturer do to ensure proper protection of their intellectual property?
- Get educated about IP fundamentals including basic IP law
- Continually evaluate and identify IP (IP training classes are a great idea)
- Develop clear processes to protect your company’s IP
- Put procedures in place to avoid IP theft or infringement
- Understand the role of IP agreements (e.g. confidentiality, assignment, licensing)
- Act sooner than later — IP rights are frequently lost due to delays
- And finally, when in doubt, consult expert legal counsel to understand the legal principles surrounding the protection of IP and avoidance of IP infringement
Source: U.S. Commerce Department