Intellectual Property Protection: The Basics
Your company's intellectual property, whether that's patents, trade secrets or just employee know-how, may be more valuable than its physical assets. This primer covers everything from establishing basic policies and procedures for intellectual property protection.
By Derek Slater
CSO — Intellectual property protection is a complex duty with aspects that may fall under the purview of Legal, IT, Human Resources and other departments. Ultimately a Chief Security Officer or Risk Committee often serves to unify intellectual property protection efforts.
Here are answers to common IP questions.
- What is intellectual property?
- What are the differences between patents, trademarks, copyrights and trade secrets?
- Isn't protecting intellectual property the legal department's job?
- What does the security group need to do to keep intellectual property safe?
- How does "competitive intelligence" work?
- How do legal protections vary around the world?
- What are ways of protecting intellectual property when you're sending software work offshore?
- Related articles from CSO magazine
'Intellectual property' sounds pretty fuzzy. What exactly is it?
Intellectual property (IP) can be anything from a particular manufacturing process to plans for a product launch, a
For many companies, such as those in the pharmaceutical business, IP is much more valuable than any physical asset. Authoritative sources report that each year, intellectual property theft costs U.S. companies about $300 billion.
Download CSOonline's Ultimate Guide to Intellectual Property Protection for even more IP security practicals from CSOs and other experts [15 page PDF — free Insider registration is required]
From a legal standpoint, there are four types of intellectual property. IP registered in one of those categories with state and federal agencies is protected by law, and if infringed upon or otherwise abused, the infringers can be prosecuted.
The four legally-defined categories of intellectual property are:
- Patents When you register your invention with the government—a process that can take more than a year—you gain the legal right to exclude anyone else from manufacturing or marketing it. Patents cover tangible things. They can also be registered in foreign countries, to help keep international competitors from finding out what your company is doing. Once you hold a patent, others can apply to license your product. Patents can last for 20 years.
- Trademarks A trademark is a name, phrase, sound or symbol used in association with services or products. It often connects a brand with a level of quality on which companies build a reputation. Trademark protection lasts for 10 years after registration and can be renewed "in perpetuity". But trademarks don't have to be registered. If a company creates a symbol or name it wishes to use exclusively, it can simply attach the TM symbol. This effectively marks the territory and gives the company room to prosecute if other companies attempt to use the same symbol for their own purposes.
- Copyrights Copyright laws protect written or artistic expressions fixed in a tangible medium - novels, poems, songs or movies. A copyright protects the expression of an idea, but not the idea itself. The owner of a copyrighted work has the right to reproduce it, to make derivative works from it (such as a movie based on a book), or to sell, perform or display the work to the public. You don't need to register your material to hold a copyright, but registration is a prerequisite if you decide to sue for copyright infringement. A copyright lasts for the life of the author plus another 50 years.
- Trade secrets A formula, pattern, device or compilation of data that grants the user an advantage over competitors is a trade secret. It is covered by state, rather than federal, law. To protect the secret, a business must prove that it adds value to the company - that it is, in fact, a secret - and that appropriate measures have been taken within the company to safeguard the secret, such as restricting knowledge to a select handful of executives. Coca-Cola, for example, has managed to keep its formula under wraps for more than 117 years.
But IP can also be something broader and less tangible than these four protected classes: it can simply be an idea. If the head of your R&D department has a eureka moment during his morning shower and then applies his new idea at work, that's intellectual property too.