I spend a lot of time thinking about and helping clients with IP strategy. IP assets are critical to every business. Protecting them, however, can be a veritable “money pit,” as there is often a seemingly endless need for protection and enforcement. Even large companies sometimes invest in IP protection that is not well thought out and may not bring real value to the business. How can companies better manage these valuable assets?
Every business has at least two kinds of IP assets – their brand (aka their trademark(s)) and their trade secrets (yes, you have them, even though you may not think so) – in other words, things like their customer list, their “secret sauce” about how they do what they do in their business, and the like. Some businesses go one step further and have inventions or complex processes that may be subject to patent protection and/or are what most people would think of more formally as “trade secrets” (think of the Coca Cola formula or KFC’s recipe for fried chicken). Most businesses also have some number of copyrights – this could be things as simple as the text and photos on their website and their monthly newsletters to source code, or even literary or artistic works.
In fact, I’ll let you in on a little secret. As an IP lawyer, I see IP everywhere. Just yesterday, I was waiting to pick up my daughter to drive to school and I noticed that The Goddard School at our corner had a tiny registered trademark symbol ® next to its name on its sign. It was interesting because the sign itself was letters affixed to the brick face of the building – and so the registration symbol was a separate “letter” on the brick. (We won’t discuss how many times I’ve been by the building and never noticed it before.)
IP is also the main lens through which I think about my clients’ entire businesses, no matter what the legal assignment is. So when I am asked to think about a transaction, for example, I’ll be thinking about things like – who owns the IP? What rights do each need to that IP? And when a litigation comes in, even if it is a simple breach of contract case, for instance, I’ll be thinking about whether there has been any impact on the business’ IP as a result of the disagreement. Even when someone comes to me with a simple IP request, for example, to register a logo – I’ll want to make sure the client owns all the rights to it. Do we need to do a copyright assignment for the design? Because of my training and experience, I can’t help but look at the global IP picture.
I was thinking about IP strategy recently because I saw a survey of IP professionals that asked them what their key goals were for 2021. 40% said that they were going to invest most in obtaining IP advice and strategy guidance in 2021, while 37% also said that the biggest issue they saw was the need to ensure their business and IP strategies were aligned. But perhaps the most interesting fact was that 36% felt that they had a hard time communicating the value IP brings to the business with company stakeholders. Put another way – they struggled to show the ROI from the investment in IP protection. Relatedly, this week I had the opportunity to speak with a member of Senator Coons’ staff about IP and related issues. This issue about needing to show the ROI of IP protection was also a prominent theme in that discussion.
Which brings me back to my original point – the most crucial step in effective IP protection is developing a strategy for it. Given how much IP all businesses create, there are loads of opportunities to spend money on it. But should you? The (typical lawyer) answer is, that depends. For example, why bother getting a patent or even registering a copyright or trademark if you know that something is short-lived and/or not important enough to the company to ever defend it in court? If you aren’t going to enforce something – it might not be worth the investment. On the other hand, maybe you want the registration or patent for defensive reasons.
Also, you need to look at whether it is something that you really can or should protect. For example, I often see smaller clients select trademarks that aren’t very strong – either because they are descriptive or quite similar to marks used by others in their industry. We can try to register those marks – but should we? Frequently, they would be better off selecting something different, something more unique and thus not only less expensive to try to register, but more valuable to the business in the long run. Similarly, should we apply to register the trademark for goods/services that are one-offs? If money isn’t an object, maybe – but then how will you prove continued use down the road when it is time to renew it? Similarly on the patent side – sometimes you will find as you go through the patenting process that the patent is getting narrowed considerably from where you started – is that really something worth getting at the end of it?
These conversations certainly happen with smaller clients, for whom budget is a significant issue. But even larger clients have (or should have) these conversations. The first step in any IP protection project needs to be to think about what is most important to the business and for how long will it remain important? After answering those questions, only then should you think about the best ways to protect it. There is often more than one way to protect something (and it is usually a good idea to have layers of protection) – but again, the business strategy for the IP is going to drive those decisions. Business people are an essential part of this discussion, yet in many larger companies, that often falls by the wayside.
IP strategy is also not a one and done process. If you have registered IP, then it should be reviewed periodically to make sure what registered IP the business has is continuing to serve business goals. As things evolve (and given the, in some cases, limitless duration of certain forms of IP), it may not be necessary to maintain certain registrations – or perhaps there is updating that needs to happen. For example, has anyone thought about needing to re-register a trademark logo when the logo is updated? Sometimes that isn’t necessary, but other times it is.
So, ask yourself, what IP do you really have (think of all four areas – trademarks, copyrights, patents, and trade secrets)? How important is your IP to your business? Have you done everything you need to protect it? Do you even know where to begin to answer these questions? Here’s the first question I tell clients to answer – what would you be willing to spend money on to go to court to protect? That usually is an easy clue as to what really matters.
