Intellectual Property Assets: Everything You Need to Know
Intellectual property assets include copyrights, patents, trade secrets, and trademarks that hold value for a business. 3 min read
2. Copyright Overview
3. Trademark Overview
4. Trade Secrets Overview
5. IP as a Business Asset
Intellectual property assets include copyrights, patents, trade secrets, and trademarks that hold value for a business. Protecting them is vital to preserving their value.
Some have described a patent as a legal monopoly. Owning a patent gives you the exclusive right to make, use, sell, market, or import a product, process, or invention. Design patents are valid for 14 years while plant and utility patents offer protection for 20 years.
Individuals granted patents may assign them to companies or manufacturers. Companies develop a patent portfolio either by acquiring inventions of employees or buying patents that have already been issued. Some companies require employees to assign the company the patents for their inventions.
Patent infringement occurs when someone makes, uses, sells, markets, or imports an invention patented by someone else. The patent owner can sue the infringer for damages, including royalties and/or lost sales, and prevent further infringement. Infringement occurs even if the person did not have knowledge of the patent, but willful infringement is typically subject to increased damages.
A patent must include a written description of how to make and use the invention and a list of claims that covered by that specific patent. The U.S. Patent and Trademark Office issues patents. An individual or company that infringes on a patent can challenge the patent as invalid in court on the grounds that the invention in question was not novel compared to prior art (already existing inventions).
Patents serve as assets to a company in several ways:
- They provide a legal monopoly on a product or process the company sells.
- They may provide licensing revenue.
- They have value and are sellable.
Copyrights protect writing, music, works of art, and other original works of authorship. The copyright owner has the exclusive right to perform, reproduce, display, or sell the copyrighted material. Copyrights cover materials such as songs, photographs, books, paintings, and articles. Copyright protection lasts much longer than patent protection and depends on the original publication date of the work in question:
- For works published before 1978, anonymous work, commissioned work, work made under a pseudonym, the copyright term varies based on a number of factors.
- Copyrighted works created in or after 1978 have protection for the author's lifetime plus an additional 70 years .
Trademarks protect elements of a business that distinguish its goods or services from the competition, including names, sounds, words, symbols, and logos. Trademarks that are currently in use can perpetually be renewed. Trademark protection prevents others from passing off other goods or services as those of the trademark owner and/or confusing those in the market with a similar name or identifying feature.
Trade Secrets Overview
Any information that provides a competitive advantage is a trade secret, such as a computer program, customer list, or market research. While a patent requires an application for and enters the public domain when granted, trade secrets remain secret. The law protects the secret from being misappropriated but does not prevent others from using it if the company fails to protect the secret and it becomes competitor knowledge.
IP as a Business Asset
Business assets fall into two broad categories:
- Physical assets such as machines, equipment, buildings, finances, and infrastructure
- Intangible assets including brands, know-how, designs, human capital, and other creative products
For many years, physical assets compromised most of a company's value. But with information technology development, IP and other intangible assets are more valuable than ever before. Many businesses derive their income not from factories and warehouses, but from innovative ideas and powerful software. Because of the ever-increasing value of IP, protecting these assets is critical to preserving a company's value.
A company's intangible asset portfolio includes these categories of IP which make enforcing ownership rights through various legal methods important. These categories include:
- Products and processes through utility models and patents
- Works of art, data, and software through copyright
- Creative designs through industrial design rights
- Distinctive signs through trademark
- Microchips through layout and circuit patents
- Geographical origin protection
- Trade secrets through nondisclosure
Protecting your intellectual property assets transforms them from intangible to tangible assets which have intrinsic market value.
If you need help with protecting your business's IP assets, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.