Protecting intellectual property is akin to traveling by air, land or water. One can reach a destination by different or multiple means.
Three panelists discussed the various ways to protect intellectual property during a Middle Market Entrepreneurs seminar at The Antlers Hilton.
There are three types of patents available: utility, design or plant (as in horticulture), said Michele B. Fagin, an attorney at Sparks Willson Borges Brandt & Johnson P.C.
Trademarks are for brand and trade identification, and copyrights protect original works of authorship, including creative works in literary, musical or dramatic genres.
A trade secret is proprietary information that cannot be legally protected unless it is maintained in confidence.
Entrepreneurs should choose a name and brand that they can protect, transfer to someone else and that someone will want to pay money for.
“If you need a patent – apply for it,” Fagin said. “But at the same time, pick a killer brand. Then, if the patent falls through, you will already have the market with your brand.”
The decision to apply for a patent must be made carefully.
“Trade secrets last as long as they’re maintained in secret,” said Brenda L. Speer, an attorney who specializes in protecting technological and creative arts. “But patents disclose what you’re doing to the world.”
But branding is absolutely essential because one never knows how a company will change, grow or metamorphose.
“In the future, you may want to do something different,” Fagin said. “Then you have the Radio Shack problem – when was the last time anybody bought a radio? Don’t get tied to a brand that limits you.”
If a name is creative and appropriate – and zany can go a long way toward both – it won’t be limiting.
“What does ‘Apple’ have to do with computers?” Nothing, of course, but the company wanted to broach the education market, and apples are associated with education in a “warm fuzzy” way, Fagin said. And, yes, it took much longer to brand that name – “but now they are not confused with anybody else.”
Forget about trees, Greek gods and such nonsense, she said.
Somebody has already been there, done that.
“You have to make up a word that’s not in the English language or that’s meaningless nonsense – like Bluetooth, but everybody will know what it means,” Fagin said.
Speer said that the more money spent up front to market, the better the return on investment down the road. Although “you want a name your consumers will immediately connect with, if it’s too descriptive – like Coppertone, Edge or Palm, then over time your legal recourse erodes,” Speer said.
Beware of “marketplace creep,” Speer said. “If your trademark falls into the vernacular, you’ve lost the trademark.”
A trademark should be an adjective, followed by the word “brand” and then a noun. For example, XYZ-brand soap.
“Don’t fall victim to genericide (an actual legal term) – that’s death,” Speer said.
To avoid losing control over a name, “take the word you are marketing and integrate it with a symbol. Then, over time, you can migrate the old words out and migrate new words in,” Fagin said. “Or, use a tag line with your name, so that the tag line becomes your brand and you can change/add products.”
Brian P. Alleman, chief financial officer of Taeus International Corp., said that, “At the end of the day, the value of your brand or trade secret lies in how you monetize them and get them out into the market.”
For instance, Apple has done such a brilliant job of marketing, that even an attorney like Fagin – who fairly oozes chutzpah and savoir-faire – is smitten.
“I’m an Apple person,” Fagin told the group. “I would buy anything Apple creates – they could put dog poo in a box with an Apple symbol on it – and I would buy it.”
(Well, that makes only one of us, but what do I know?)
“Any intellectual property you have is an asset – just like furniture and computers,” Speer said. “But if you don’t recognize it as an asset to protect and build on – shame on you. You need to be thinking about it from day one.”
As a start-up company, don’t be shortsighted because of a lack of money in the bank.
It will cost far more down the road if you have to change your brand.
As for patents, they are not right for every company, nor for every product.
“A patent can be a liability if you’re not using it or monetizing it,” Alleman said. “Two years from now, that patent may not be worth nearly what it was because of technology changing so rapidly.”
Rebecca Tonn covers banking and finance for the Colorado Springs Business Journal.