Tips for protecting your small business's intellectual property

Great businesses begin with an original idea, whether it's a unique product or service concept. As they expand, they often innovate further, creating distinct intellectual property that sets them apart from competitors. Yet for as common as this story is in the United States, countless small businesses fail to adequately protect their IP, leaving the door open for eventual decline when their secrets or ideas leak to competitors. According to Warren Tuttle, Co-Chair of the Creator Committee of the USIPA and Founder of Tuttle Innovation, much of this can be chalked up to a simple lack of awareness and understanding. “I think a lot of business owners are probably unaware of how they could be helping themselves,” says Tuttle.¹

Regardless, small businesses certainly have much to gain by learning how to protect intellectual property. In this article, we’ll cover 6 tips you can use to do exactly that.

What is intellectual property?

“Intellectual property” can refer to a vast array of items, but at a core level, it names rights given to the creator of something. The World Trade Organization defines it as “rights given to persons over the creations of their minds”.² If this sounds broad, that’s because it is. IP can include logos, products, songs, and much, much more. It’s particularly important small business owners understand the broadness of the IP umbrella because it demonstrates just how likely it is they themselves have IP to protect.

How to protect your intellectual property

1. Define your business’s intellectual property risk

First off, how likely is your IP to become lost or lose value? IP risk depends heavily upon the kind of IP you’re trying to protect. A patent may only provide 20 years of protection, whereas a copyright may continue protecting a business’ IP for 95 years after its first public use. You could also be protecting a trademark or a trade secret, each of which also provides their own unique protection ranges. It’s important to understand the difference between these four types of IP because each is used to protect different things. Copyrights, for example, protect things like software, designs, books and data, while trade secrets protect operational elements like formulas, patterns and processes.³ Different kinds of businesses produce different kinds of IP, so understanding your business’ protection needs is key.

2. Engage experts to file for intellectual property protections

It’s a tough task to be running a business and managing intellectual property by yourself, so bring in professionals to help you through the process. According to Tuttle, a provisional patent is a good place to start, from which point you have 12 months to get more permanent protection. He strongly advises any business owner in this position then finds a good lawyer to secure more meaningful, long-term IP protection.¹

3. Establish a process to monitor for IP infringements

Once protections for your IP are in place, you’ll want to make sure they’re working. There are a handful of ways to do this. Searching patent databases allows you to check whether anyone is trying to fraudulently file your IP under their own patent. Patent analytics tools help you keep tabs on the patent portfolios of competitors, tipping you off if one or more of them seem to be developing something similar to your own IP. You can also simply watch the market and take note if you see potential issues arising. Perhaps the easiest solution is to hire a patent attorney or subscribe to a patent watch service to do this for you.⁴ However you choose to go about it, it’s essential you set up some form of monitoring process to ensure your IP protections are doing their job.

4. Consider IP licensing and contracting agreements opportunities

Sometimes an idea is just so good, it’s too hard to keep a tight lid on it. If that’s the case with your IP, licensing it out is always an option. This essentially just means you’ll enter into a legal agreement with other businesses stating they can use your IP if they pay you an agreed-upon sum of money to do so. IP licensing may provide an excellent source of income in some cases, all while protecting the sanctity of your IP. For any small business looking to expand, that’s an invaluable windfall.⁵

5. Use nondisclosure agreements

Alternatively, you may want to use non-disclosure agreements (NDAs) to protect your IP from being used unlawfully while still sharing it in the interest of business pursuits. NDAs legally obligate people and businesses not to share or use your IP for their own causes, or as otherwise laid out in the terms of the agreement. It’s not a surefire guarantee they won’t do that anyway, but if they do, you’ll at least have easy legal recourse.⁶

6. Educate employees on intellectual property best practices

Loose lips are not merely a threat to confidentiality but also pose significant risks to the viability of businesses. Don’t underestimate the value of an educated employee base who know the value of your IP and the proper way to protect it during their day-to-day duties. Have employees complete trainings on responsible IP handling and reinforce the importance of doing so at every opportunity. Your employees should be able to identify cases of IP infringement on their own and aid you in strengthening its protection.⁷

Clearly, IP protection isn’t something one business owner can handle alone. It takes every employee and business partner working together with vigilance to ensure nothing slips through the cracks, and still, it’s possible something will. And if it does, every business owner needs to be prepared. Fortunately, you can purchase insurance for intellectual property. IP insurance can help cover legal expenses in the event of IP infringement, aiding you in your fight to protect the IP that defines your business’ success. Check out the Nationwide Business Solutions Center to learn more.