August 25, 2010

At some point, every business owner deals in intellectual property --  by selling licensed products or just writing copy for websites, for example. And, at some point, those IP issues can get tricky.

You can avoid many problems by deploying a strategy for handling concerns and by retaining an expert in intellectual property law. Here are some general areas to mull to make sure you're covered.

1. Earning From Your Intellectual Property

One of the biggest possible problems that a small business owner faces is the discovery that someone else is profiting on products that infringe on your own intellectual property.

Take Maria Brophy's example regarding licensing Drew Brophy's surfing-related artwork. "We run into the issue of infringement from other companies. They see how well his artwork on products sells (i.e., boogieboards) and then will copy his style and his art, but change it just enough so that they cannot be sued. It causes confusion  -- as many people see these sub-standard products and think that it's Drew Brophy art on it.”

Such situations can do more than harm your own product line. If you've licensed an image or a product to another company, your licensees can wind up with trouble, as well.

Brophy has had licensees decide not to renew contracts due to infringing products. In situations where the artwork has been changed at least somewhat, Brophy finds that suing is not an ideal option. “Our attorney advised against suing, stating that we had a slim chance of winning because they had changed the art just enough to get away with it.”

2. Borrowed Copy and Other Materials

Gisela McKay's copy is very popular. She knows that for a fact because she gets routine notification from Copyscape (a tool that alerts you when someone uses materials from your website) that yet another website has copied her materials.

“We're a small business and we are constantly finding our content all over the web. From one-man shows liberally helping themselves to our marketing copy, to large industry associations borrowing a paragraph here and there, our Copyscape report is forever identifying new people who have copied and pasted  -- very rarely even altering a word.

There is a person in India who liked our content and concept so much that he borrowed the entire website, altering a few minor things such as the logo (still clearly inspired by ours, though) and registered Wellergise.com  -- to our original Wellergize. After a cease and desist across the ocean, his content is mostly changed, but you can still tell the influence.”

It's not always a stranger taking McKay's copyrighted materials. “My favorite Copyscape report, though, when we learned that a former business partner of mine had copied, word for word, our new 'advertise with us' content, without even bothering to alter the statistics contained on the page.

It's not bad enough that she is still using the copy I wrote on our joint business website (when she promised to have a new website developed over three years ago). Apparently, she decided that my new company and staff should write the content for her new website in development (now locked down behind a password).”

When you're working with a partner, it's good business sense to lay out who owns intellectual property at the end of the contractual relationship.

3. Lack of Understanding

A more common intellectual property issue these days is a lack of understanding of the laws governing different types of intellectual property. Many people simply assume that if something is online,  like an image, it's free to use. Luckily, such situations are typically easy to resolve with a letter from a lawyer. It's more a matter of educating infringers than anything else.

But when you're dealing with someone based in another country, especially one with very different intellectual property laws, a simple "cease and desist" letter may not be enough. It can be very difficult to assert your ownership of a particular piece of material when you're dealing with not only a lack of understanding of the law but also cultural and language differences.

4. Accusations of Infringement

Not all intellectual property problems come down to dealing with people and businesses infringing on your work. You may find yourself on the receiving end of legal action regarding intellectual property. Even when it seems that you've done nothing wrong, it's worth consulting with a lawyer. Intellectual property laws are not necessarily obvious. What may seem like a perfectly legal step can cause more problems than you might expect.

Just because there is an accusation, however, does not mean that legal action immediately follows. Depending on the truth of the matter, you can settle or, in some cases, even countersue. Because of the complexities of such cases, maintaining control of your intellectual property is crucial.

That can include filing the correct paperwork for a copyright, patent or trademark, as well as defending your intellectual property against even minor infringement.

5. Small Problems Made Worse

Working with legal counsel  -- and heeding your lawyer's advice  -- is important, no matter what you feel your position is when it comes to a piece of intellectual property. Blogger Ben Wright shared an example from when he worked as general counsel for a software company that held several patents.

“Our CEO believed that a competitor was violating the patents, but he made a mistake. He told the competitor that the competitor violated the patents, and he said this in the presence of a customer. The competitor sued our company, saying in effect that we had called the competitor's integrity into question and the competitor was entitled to clear its name. Our company was not prepared for this lawsuit. We quickly settled the suit on unfavorable terms.”

Wright suggests that the best way to handle a situation where a competitor appears to be violating your intellectual property is to leave the matter to a lawyer. Certainly, no public accusations should be made before you're actually ready for a lawsuit.

Join the conversation ( 2 )

• Lou Ellman 1 year 5 months and 23 days ago

  

  Interesting article. Another problem to avoid is under payment of royalties and licensing fees. Effectively monitoring Intellectual Property license agreements can be tricky for both Licensor and Licensee. I'm continually surprised to learn that error prone spreadsheets are used to calculate royalties!

• Julie Rains 1 year 5 months and 25 days ago

  

  Great discussion of what can be a complicated subject. I am often surprised at the people (otherwise well informed and who value integrity) who don't realize that online content is for anyone's taking.
  
  That IP laws can vary worldwide can complicate matters, and is definitely a consideration for any business that looks to do business in more than one country. There are some global protections (Madrid Convention) but even then, they are limited to specific participating countries.