The Importance of Intellectual Property Protection

May 31, 2012
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Guest Post:  Jennifer Motian provides an overview of IP (Intellectual Property) basics, the differences between the French and US systems, and the importance of properly protecting your IP. Jennifer contributes writing to Red Chalk Group, an international firm that specializes in intellectual property services and consulting.

 

One of the most important things for a startup to consider is navigating the complex legal field related to the firm’s intellectual property (IP) Obtaining the proper protection for your IP is critical and can make or break a business.  France and the United States both have extensive systems for the protection of IP rights, which can be broken down into copyrights, patents and trademarks.

An overview of IP Basics

Here are the differences between the three fundamental forms of IP protection:

Patents are the exclusive rights granted to inventors of new devices or processes. The inventors, through the patents, have the sole right to manufacture or use those devices or processes. Examples for using a patent might include the development of unique software or a new handheld device.  Patents are valid when there’s a true differentiating factor to the technology – an innovation – and it prevents competitors from simply copying your product.  Patents can be design patents (something’s visual appearance – for example, an iPod’s physical shell) or utility patents (products, processes, compositions, functions – e.g. the actual technology that makes an iPod work).

Trademarks cover an image or word or distinctive mark which individuals or businesses used to identify their products to consumers.  These can be used to protect elements of your brand, from a brand name to a logo to a tagline.

Copyrights protect the authors of original works – for example a book, image, or musical piece. Copyright can also include the right to adapt or modify the work, distribute copies of the work, and display or perform the work (if it’s a live art piece) in public.  Pieces of IP that should be protected by copyrights include books, articles, white papers, and other original pieces of writing, as well as art and music.

IP in France vs. The US: Timing is the Critical Issue

The governing body for intellectual property rights in France, covering trademarks, patents and industrial design rights is the National industrial Property Institute (or INPI, which stands for Institut National de la Propriété Industrielle).  In France intellectual property rights begin receiving protection from the date of registration with the INPI and there are three categories of rights: intellectual property rights outside of France, intellectual property rights within the European Union by European Patents, and intellectual property recognition and protection under French Law.

Conversely, in the U.S., a copyright can attach from the moment of creation and trademark protection can attach when first used in commerce.  The patent system in the United States used to be similar, i.e. “first to invent” was what mattered, but that was changed in 2011 to align itself more closely with other nations and is now, just like France, a “first to file” system. In the U.S., copyrights are managed by the United States Copyright Office patents and trademarks by the USPTO (United States Patent & Trademark Office).

In other words, when protecting your IP in both France and the US, timing is of the essence.  A failure to immediately protect your IP can lead to a loss of market, including potential restrictions to manufacture and sell your own products if someone beats you to the IP protection process first.  This can kill your business before you even get started.

Both French and U.S. copyright law utilize a number of different royalty payment and licensing organizations. In the U.S., you may have heard of the most popular, ASCAP or the American Society of Composers, Authors and Publishers. In France, there are two large bodies and several smaller ones: Centre Français d’Exploitation du droit de copie (CFC) and the Société des Auteurs Compositeurs et Editeurs de Musique (Sacem) are the most important.

The Importance of IP Protection

So why does all this matter to you, as a business owner? Well, intellectual property often translates directly to monetary gain. If you don’t know how to adequately protect your intellectual property, your business is at risk.  The kinds of risks include:

Branding: elements of your brand, from your company name to your logo can be subsumed and eroded. This can damage perceptions in the market of your quality, products, and reputation.

Products:  Unique investments that you’ve made developing technologies may be compromised; only through proper patenting, etc. can you ensure that you control and can market the products you develop.

Ideas and thought leadership:  Protecting original contributions to the thinking around your industry can be an important step to establishing your company as a market leader.  Copyrights ensure proper attribution of your materials.

In a business intellectual property is everywhere.  The name that you choose will be your trademark, even the smallest new process created within your firm may be patentable, and much of the creative work of your employees will be protected by copyright. It’s important to know where to go, in both countries, to properly register and protect your business’ intellectual assets.

IP and Tech

The importance of IP is particularly true for high-tech firms: the products created are intellectual in nature, beginning with a concept that, in the case of apps or software, remains entirely virtual.  Demonstrating the uniqueness and intricacies of a product relies entirely on whether that has been properly documented.  Fully protected IP is also crucial to have in place as the basis for many advanced distribution agreements common in tech, including licensing and royalties.

Whether your start-up is based in the US or France, or you’re active in both countries, ensure that you stop and consider the core elements of your business are appropriately protected.  This ensures that you have the foundation for future deals, and creates the context for your business to thrive as it grows.