IS YOUR BUSINESS FLYING WITHOUT "IP RADAR"?

By Charles Moster, Esq.
MosterWynne Law Firm

As a fellow entrepreneur, it is disheartening to see how many emerging businesses operate without protecting even their most critical forms of intellectual property. In fact, many business owners are not even sure what “intellectual property” (IP) means.

Simply put, it is the fruits of your imagination and can include everything from the name of your business or product/service, to the content of your website; photographs, designs and works of art to software; and of course, your new product designs. Today, even business ideas, processes, and solutions are considered intellectual property.

In today’s world of rapid e-commerce, anyone who posts a website or sells a product or service is making that information available to companies not just in their city or region, but nationally and even internationally. As a business owner, you have worked hard to build a company whose name represents a place in the market – but have you protected that name? Moreover, have you considered ways that your existing stable of creativity could create new, untapped revenue?

Our goal as General Counsel to growing businesses in Austin and throughout Texas is to reduce the number of entrepreneurs who are flying without any “IP Radar”. Is your company cruising safely or are you flying into a storm? Have you maximized your business trajectory?

Take this fast survey and find out!

1.Only “high tech” companies have to worry about intellectual property.
(True) (False)

False – Intellectual Property issues and the need to protect your ideas and branding apply to all businesses, including traditional service industries, brick and mortar retail, high tech and everything in between.

2.By registering and paying for a website domain, I have the legal right to use my name any way that I want to promote my business.
(True) (False)

False – Obtaining a domain has no bearing on legal ownership from an IP standpoint. If another company has a previously registered trademark or can claim they used the name first (“common law” rights) they can sue to shut down your use of the domain, trade name, and even seek monetary damages.

3.By registering the name of my business with the State of Texas, I have protected my rights under the law.
(True) (False)

False – This is a common misconception. The Secretary of State of Texas just lets you know if the name is available for use as a business name in Texas. It does not inform you if someone has the name reserved as a “dba” in a particular county, and it does not relate to the federal trademark. Even if a name is available in Texas, that does not protect you from a prior trademark or legal claim. It is not the state’s job to do your legal homework.

4.Since I am selling my products or operating my business just in Texas, it does not make sense for me to get a Federal trademark.
(True) (False)

False – Even if you only sell in Texas, a prior registered federal trademark might prevent you from using the name even in Texas. Besides, you may one day decide to expand your business into other states.

5.Even though someone else trademarked my company name, I am safe because I can prove I was using it first.
(True) (False)

False – Even if you used the name first, the first person who files the trademark in Washington, D.C. is deemed the “presumptive owner” of the mark. This means that the law presumes that since he/she filed first, they used the name first, unless you can prove otherwise. It can be difficult and expensive to prove you used the name first.

6.The best way to protect software is to hide the code or treat it as a trade secret.
(True) (False)

Not necessarily so! – Some companies use this approach but we do not recommend it since most software code can be reverse-engineered. Clients should consider at least patenting their software designs.

7.There is no reason to get a patent unless you have a complex and unique device that you want to protect.
(True) (False)

False – This is another common misconception. Simple and even non-mechanical ideas and processes can be patented if the requirements of the law are met.

8.Having registered intellectual property protection can help me increase the price of my business when I am ready to sell it.
(True) (False)

True – Potential buyers of your company will want to see that the brand they are buying has been protected, and if it has not the extra risk that is created can reduce the purchase price. Also, having a stable of IP – including patents, trademarks, and copyrights – can be considered ‘bookable assets’ that literally increase the value of a company when it is sold.

9.Having a patent protects me from infringement lawsuits.
(True) (False)

False – Your patent only allows you to stop others from using your idea. If someone else patented an idea that overlaps yours, that inventor can sue you to stop you from using his idea! This can happen, for example, when you patent an improvement to another inventor’s idea.

10.I don’t need a patent before I talk to others about my idea for a new product if I mailed a description of my idea to myself in a self-addressed and sealed envelope.
(True) (False)

False – So-called “mail box patents” are all but worthless. If you want to talk to others about your concept in order to plan your product launch, you probably ought to have a patent application pending (i.e., on file with the Patent Office) before you begin your discussion.

11.I can use patents to create competitive advantages and barriers-to-entry that my rivals must overcome.
(True) (False)

True – The essence of a patent is that it enables you to stop others from using your invention. If your invention gives you a competitive edge then your competitors must get your consent to use the idea or risk being sued for infringement. Otherwise, they must find some way to overcome your competitive advantage without using your idea.

Don’t feel dismayed if you didn’t score 100%. Many lawyers miss some of these questions! The moral of the story is never fly without radar. Our advice is to proactively protect your IP… it may be one of your most important investments. If you have a question, feel free to contact us at 512-320-0601 or cmoster@mosterwynne.com

We are here to level the playing field and to be a competitive advantage. We can deliver radar. We want to help you get there.