What are the four types of Intellectual Property and how do you protect them?
Asking and answering the question, "What are the four types of Intellectual Property?" in a comprehensive manner will ultimately lead you to the best practices for keeping your intangibles under lock and key.
Intellectual Property (IP) assets are among the most valuable possessions of any organization. For many, these intangible properties are worth more than their tangible assets, including cash, liquid financial holdings, buildings, equipment and land. Indeed, for most S&P 500 companies, tangibles comprise just 16% of their value, while intangibles such as IP rights and even more abstract resources like reputation constitute the remaining 84%.
Though much less visible than physical security, IP protection is no less important for an organization with such assets. To best ensure that these "gold mines" are fully safeguarded, it is critical to have a practical understanding of the four major types of IP. We will examine them here and address the proper protections for each.
What are the four types of IP?
The vast majority of IP assets fall into four categories: patents, trademarks, copyrights and trade secrets.
- Patents are exclusive rights that protect invented machines, manufactured objects, technological or industrial processes and systems. In some instances, as with pharmaceutical products, a patent may protect chemical formulas or compositions. Additionally, in some jurisdictions, patents also cover designs, whereas, in others, namely the European Union, design or industrial design rights serve that purpose.
- Trademarks or service marks apply to assets that serve as marketplace identifiers for organizations' brands, including, but not limited to, product or service names, logos and slogans (though it is difficult to obtain exclusive rights on the latter). A prominent and easily recognizable trademarked logo can be the most valuable asset in a company's entire IP portfolio.
- Copyrights protect dramatic, literary and artistic works, including those created for hire. "Artistic" and "literary" are broad terms here. An architect's drawings that form the basis for later planning permission can be copyrighted just as a comic book artist's would be, and a thought-leadership white paper produced by a business owner is no less eligible for copyright protection than a novel.
- Trade secrets are essential pieces of information regarding the processes, products or services of an organization that are not intended to be published or otherwise distributed and that directly benefit the owner by dint of their confidentiality. All things being equal, these secrets will only be known to other parties if shared with a business partner. Recipes for food and beverages or algorithms used in software may fall under this category.
Key features of major IP assets
All of the IP categories detailed above are governed by various guidelines in some form or fashion. Most often, these are codified in the laws of individual national jurisdictions. In the case of the European Union, regional regulations also apply, though deference will be given to member states' laws so long as they do not conflict or overlap with those of the wider block. Civil treaties administered by nonpartisan organizations such as the World Intellectual Property Organization (WIPO) and World Trade Organization (WTO) are also important; some have legal weight, while others oblige the member states to adapt their national laws accordingly.
- Patents are protected under the laws of virtually all jurisdictions. Once patent applications are filed and approved by relevant authorities, protection can typically last up to 20 years if all required upkeep fees are paid, and documents are submitted on time. Most jurisdictions grant a different life span to design patents (usually 10-25 years) and utility patents (10-20 years). Moreover, countries that have ratified the WIPO's Paris Convention or the WTO's Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement are expected to respect patented IP assets from other nations within their borders per the same privileges granted to their own nationals.
- Trademarks are also legally protected in practically all countries once registered. Unlike patents, registration can be maintained indefinitely as long as renewal fees are paid, typically at 10-year intervals. Mark holders may also need to prove they are putting these IP assets to use or attempting to do so, either periodically or at the request of third parties. The WIPO's Madrid System provides a framework for international cooperation on trademark rights, but registration in one nation does not guarantee protection in another.
- Copyrights receive remarkably long-lasting legal protection. Once created, the copyright applies for at least 50 years after the creator's death in most countries (70 in some jurisdictions such as the United States and European Union). The 50-year minimum comes from the Berne Convention, which almost 180 countries have ratified and implemented as their own law. In cases where a work's copyright protection in one country is shorter than that in another, the shorter term applies.
- Trade secrets acquire legal protection once commercially relevant data is defined and concealed. The restricted sharing of such information is generally secured by non-disclosure agreements (NDAs) or confidentiality contracts. Parties that break NDAs regarding trade secrets may be subject to civil suits filed by the secrets' originators and could be criminally liable if disclosure led to counterfeiting (though the latter is quite difficult to prove). The WTO's TRIPS Agreement applies to all WTO-affiliate nations and covers all IP, including trade secrets. However, it carries no legal penalties.
How do you protect your IP?
The phrase "You can never be too careful" applies perfectly to IP assets. Registering IP in every jurisdiction relevant to your business is key, especially for patents and trademarks, and entering into the WIPO's framework helps facilitate more far-reaching protection and save money. If you expect significant infringement risk in specific jurisdictions, obtaining registered copyrights is of additional benefit. Meanwhile, trade secrets must be secured with appropriate secrecy mechanisms, for instance, blockchain encryption, and covered by NDAs if they are to be shared for any reason.
Timely renewal and upkeep (i.e., fee payment and declarations of use) are also essential protective steps with all registered IP rights. These should not be allowed to lapse without due commercial and strategic consideration.
Furthermore, staying vigilant regarding all risks to your IP portfolio is crucial, which means more than just looking out for infringement and being abreast of regulatory trends. Issues such as the internal mishandling of your intangible asset portfolio could also endanger its value. An IP audit from Dennemeyer's impartial experts can help you assess the state of your IP and work procedures to mitigate or eliminate any liabilities that may be present.