Most people have a vague understanding of what Intellectual Property (or IP, as those on the inside call it) is, or at least that it exists. But out in the wild I hear the distinct forms of IP classifications used interchangeably, when in actuality they are all very different in terms of what they protect, how they’re formed and how you can enforce your rights as an IP holder.
So first things first, why does it even matter? Well, let’s dive in, shall we?
As an entrepreneur, especially as a creative entrepreneur, you’re constantly dealing with the IP rights of others. Think: using a photo on your website or using someone’s song in your YouTube video. But you’re also putting your own work (and livelihood) out into the world and you want to protect those assets, because that’s what they are: your assets. Protecting your IP (and in some cases, knowing when to forgo those protections), as well as avoiding the infringement of other IP owners, requires you to be proactive and savvy.
The value in having your IP rights protected properly comes down to your having control over your creations. Of course it’s easier to shut down the production of counterfeits and reproductions, which is the main value that comes to mind, but it goes well beyond that. It helps promote customer loyalty which in turn can help support premium pricing. Also, if you ever plan on selling your business or bringing on investors, having your IP assets secured can be a major selling or sticking point. Think about any entrepreneur who shows up on Shark Tank with a product looking for investors. The first question they ask is “do you have a patent on this product?” It’s that important.
In this journal series we’re going to look at the four types of IP protection, starting here with Trade Secrets.
Trade Secret Protection exists to protect business secrets (confidential information that helps the business compete) in instances where copyright or patent protection isn’t available. Trade Secrets are broadly interpreted as to what is covered and range from financial information to programs and codes, either tangible or intangible.
Protection is only offered if:
Example: Jessie owns a cookie company that uses a secret combination of ingredients to create their one of a kind flavor. This secret mix gives the company a competitive advantage, or an economic value in keeping it secret. If Jessie has her employees sign Nondisclosure Agreements, marks all related documents as “confidential”, uses passwords, etc. she will probably be protected as these could be considered reasonable measures to keep them secret.
If competitors can discover the information through proper means, it is not a trade secret. It is also not a trade secret if the info is disclosed to the pubic by mistake. Furthermore, information that competitors can discover by reverse engineering (deconstructing something in order to learn how it’s constructed) is also not covered.
Basically, your trade secret is covered for as long as these criteria are met but once a trade secret is made public, they are no longer considered trade secrets. Even if it’s an innocent mistake, once that information is out, it’s no longer protected.
In our example, if Jessie is using the copy machine and leaves a copy of the protected recipe, once that next person using the machine sees it, that information is no longer protected. It doesn’t matter that it was an innocent mistake.
So what does this mean for you?
Basically, as an entrepreneur, you need to take every precaution to prevent both improper and accidental disclosures. If your rights are infringed upon you may be entitled to damages at trial but a victory at trial is no certainty and even if you do prevail, damages probably won’t reverse the damage done to your company. In the example above, if that coveted recipe falls into the competitors hands, it could spell the end for Jessie’s company no matter how much the damages awarded.
We’ll dive deeper into trade secrets in future posts with discussions on how to protect yourself, available contracts and how to protect yourself when sharing trade secrets with others within your company.
Thanks for checking out Part One of our series exploring the Four Types of Intellectual Property. Be sure to check back soon for our upcoming discussions on Trademarks and Copyrights!