IP infringement, or violating intellectual property rights like patents, trademarks, and copyrights, can be a serious crime. It also includes misappropriating things like trade secrets. The nature of the crime and punishment depend on the type of intellectual property being infringed, where it takes place, and how it occurs. As recently as 2011, trade of counterfeit trademarked and copyrighted materials made up 5-7 percent of global trade and was a $600 billion industry.

What Is Patent Infringement?

When a patented invention is used or sold without permission from the patent holder, it is considered patent infringement. For a person to be legally allowed to use the invention, the patent holder must grant permission, usually through a license. In most cases, the invention has to be used for commercial purposes to be considered infringement. The purpose and scope of the invention are defined in the patent, which is kept on file by the USPTO. Because patents are territorial, it is only possible to infringe on a patent in the country where the patent is valid.

In order to avoid accidentally infringing on an existing patent, anyone who is creating or promoting a new product should order a patent search to make sure there aren't any existing patents that could claim the product is encroaching on their space. This is particularly important for people in the software space who are creating a new app or software program.

Anyone working in the software industry, including developers, consultants, or engineers, should avoid signing an agreement that states that you or your company are creating something that is “free from infringing the rights of third parties” unless you or your customer have done a thorough patent search. You should never sign an indemnity clause stating your customer will be removed from a patent infringement dispute, which would put all the responsibility on you. 

Options for Enforcing Patent Infringement

If you are concerned that there has been patent infringement against an invention for which you hold the patent, the best option is a clearance search. This is usually conducted by a professional patent searcher working with a patent attorney. After the search is complete, the patent attorney will decide if the product infringes on the patent or patent application and issue a clearance opinion.

An enforceability opinion, also called a validity opinion, is a legal document that looks at an existing patent and analyzes how a court could potentially rule on its validity and enforceability. These types of legal action can be worthwhile but expensive—a validity opinion typically costs around $15,000, and an infringement analysis runs an additional $13,000.

What Is Copyright Infringement?

When a copyrighted work is used without permission, it is considered copyright infringement. Copyright infringement usually breaches the privileges of a copyright holder, including the right to:

  • Reproduce
  • Display
  • Distribute
  • Perform the work
  • Make secondary works

Because copyright infringement can happen easily and quickly, it is the single biggest risk to a small business. Even if you think you have taken the steps to be protected or to not use another person's copyrighted work, it can still happen.

One of the most common places for copyright infringement to occur is in marketing materials. To avoid accidentally infringing on someone else's work, make sure all photos and graphics for your company's website, packaging, and marketing are created by an employee of your company. If you use an existing image, make sure it is properly licensed. Be sure to verify the license and that it was properly ordered and paid for—don't just take your employee's word that they are allowed to use the image or illustration.

Copyright can be tricky when using video or music pieces. The same rule for creating your own material or obtaining a license applies. However, there is more gray area here. 

If one of your employees is in a band and creates a song for your business, does the song belong to your company or to the person who wrote it? Were background tracks and melodies used in the song? Do the lyrics include anything from an existing book or poem your company doesn't own? Answering yes to any of these questions means you don't actually own the copyright to the entire song, which means you could be infringing on someone else's material.

If you need help with IP infringement, 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.