Intellectual Property Risks: Everything You Need to Know
Intellectual property risks refer to the analysis of what an individual or company needs to be prepared for when deciding to protect their intellectual property (IP).3 min read
2. Types of IP Protection
3. Why Protect IP?
4. Intellectual Property Risks
Intellectual property risks refer to the analysis of what an individual or company needs to be prepared for when deciding to protect their intellectual property (IP).
What Is Intellectual Property?
Businesses in today's economy have to be on the lookout for several aggressive threats to IP, including:
- Copyright pirates
- Patent flouters
- Brand impersonators
- Trade secret thieves
Intellectual property is legally protected and includes anything that is created and original. Creators, artists, inventors, and others are rewarded for their creativity when IP laws work to ensure that their works are protected from those who would steal them for profit or personal gain.
Economies and cultures flourish when their people create and innovate. If a government wants to encourage a healthy economy, it is in their best interest to offer IP protection and, therefore, give creators incentive to keep creating.
Depending on what you create or invent, your work might automatically be protected once it's created. Some forms of IP need to be registered with an agency in order to have protection.
Most countries throughout the world have laws in place to protect IP, but not everyone enforces those laws. Counterfeiting can become a big issue in countries without strictly-enforced IP laws.
Types of IP Protection
Intellectual property can be protected in several ways, but the most basic forms of protection are:
- Copyrights - protect artistic works like written works, paintings and drawings, sculpture, music, movies and tv, and even software
- Patents - protect inventions that are unique and show progress in technology
- Trademarks - protect symbols or words that are used to denote specific brands
Trade secrets are another field of IP that is protected by law. If a business has information that gives them an advantage over other businesses in their market, and they want to keep it secret, that is called a trade secret. Coke and Pepsi keep their process for creating their beverages confidential, so these formulas are trade secrets.
Publicity rights are also considered IP rights, and these cover a business's right to use their company name in commercials. These are commonly used in endorsement deals, like when a professional football player does a commercial for a sports drink.
Why Protect IP?
Physical property is well-protected, but it only became necessary to protect intellectual property in more recent years. As artists and inventors create products or processes, everything is made so readily available to people across the world. IP is not always in the form of a tangible object, so it can be harder to protect from theft than something like a house or car.
If a musician creates a song, it can become accessible to people everywhere fairly easily and quickly. Because the song is intangible, an individual in China can be listening to it at the same time as someone else in Canada.
With such ease of accessibility, IP is also very easy to copy. A song that took a long time to write and record can be downloaded and redistributed in seconds. IP law now works to protect the creator's right to profit from their own work. It is illegal for a work to be copied and distributed without the consent of its creator.
IP protection usually expires after a certain period, depending on the type of work. Once the creator of a work has been given the chance to profit from their work for a time, it can be accessed by the rest of society free of charge. If someone invents a new form of telecommunication, they are given ample time to market their invention and profit from their work, but after the set period, other companies are allowed to make their invention without owing royalties to the inventor.
Intellectual Property Risks
When the risks involved in protecting a piece of intellectual property are analyzed, this is called IP risk management. There are two main perspectives to consider in this type of risk management, the first party and third party.
The first party is the creator and owner of the IP. This company or individual will want to assess the cost of protecting their IP. Risks to the first party include:
- Legal costs if IP must be defended in court
- Costs if the IP loses value or is no longer considered an asset
- Decreased revenue for a protected product or service if the IP is found to be invalid in some way
The third party, individual or company considering IP rights infringement, must consider:
- Cost of a lawsuit and resulting consequences
- Potential for poor reputation and subsequent effects
If you need help with intellectual property risks, 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.