Are you an entrepreneur who’s in the process of starting a business? If so, take a break from concerns over everything else and pay attention to your brand’s intellectual property (or “IP” for short). As you’ll learn from episode 13 of our podcast, Why Business Owners Should Care about Intellectual Property Protection, this is more important than you might think.
Introducing Sarah Cohen, trademark attorney
As a partner at the firm of Lombard & Geliebter LLP, Sarah Cohen told Jennifer Palmer, CEO of Gerber Finance, that she became interested in trademarks while she was studying law. As result, she felt that she “hit the law job lottery,” by having the good fortune to be a trademark lawyer for the past 15 years. And trademarks are an example of IP, along with copyrights, patents and even trade secrets.
Types of IP that should be protected
What are examples of intellectual property? Your brand should have one or more of these types of IP:
- Trademark—The brand, as shown through a logo, design, sign, symbol, words or expression. This is what is shown to consumers, and how they will identify a particular business with the quality of goods and services provided. This is what consumers will attach to.
- Copyright—Protecting an idea created for the brand and put into a fixed form (e.g. audio or visual).
- Patent—For inventions. Patents cover a broad scope that may cover products ranging from types of medicine to business strategies.
The importance of IP protection
There are a number of reasons why IP protection is important. Here are three of them:
- Let’s say your business is a hit, and is making sales hand-over-fist. One of the risks a successful business faces is if it finds itself the target of copyright infringement. As Sarah stated, a telltale sign of success is copying. The copycats are out there—and looking for ways to capitalize on the success of competitors.
- If you are starting a business with the goal of eventually selling it to a larger, more well-known company, you will need to have some form of IP—be it a trademark, copyright or patent registration—to present to the stakeholders. Having great sales is not enough, and a prospective buyer will be leery of your business if there is no IP to present.
- Finally, having and protecting IP will help accelerate the growth of your business.
Establish and register IP early
Tying in with the point of accelerating growth, getting the IP of your business established and registered should be taken care of as early as possible. If you delay, third-party copycats will have more time to infringe on your IP, which will lead to greater time, effort, and cost to eventually stop them. And, you will have to take backward steps to rebrand your IP if the mark (e.g. logo, slogan) is not available.
How do you protect IP?
You should meet with a trademark lawyer, like Sarah, who will start the process with trademark applications, in the U.S. and anywhere else in the world you are doing business, as well as the necessary documentation. All documents and agreements should be exclusively related to your business, and you should never pull them from somewhere else.
Potential challenges with registering IP
It’s no surprise that the COVID-19 pandemic has created setbacks for how many enterprises operate, and trademark law is no exception. Law firms are experiencing noticeable delays with trademark processing and approvals. Pre-COVID, businesses could expect to wait a year between the time they started and the times they registered. Today, the wait can be even longer, which is more reason to start the registration process early.
Keep it simple
Additionally, your website must clearly and simply state what your business is about, and how your products or services can be obtained. The clearer you can convey this information, the easier it will be for you to obtain registration for your business.
Interesting caveat: “Reserve your right.”
If you are starting a business but are waiting for capital to come through or you’re creating the product, you can—and should—still file an application for IP. This application serves as a placeholder that states that you are going to use this particular mark when you eventually release and begin selling the goods or services. In short, “reserve your right.” In the long run, it will buy you some time as you get everything established.
Cost of building a portfolio
The cost to trademark isn’t as high as you may think. The search for a mark in the U.S. is approximately $575. It costs about the same amount to apply, prepare and file the trademark application (along with government fees). In the event the business does become successful, the entrepreneur can then decide if he or she wishes to file outside the U.S. which would incur additional costs.
Advice to small rapidly growing companies
Entrepreneurs should do due diligence and contact trademark lawyers for counsel when starting up. There are no dumb questions! What you can do on your own without a lawyer is go online and explore if there are any brand marks like yours already being used. This will save you time, money, and aggravation in the future.
Growth Tip of the Week
As Sarah reiterates: “Invest in IP early, because it’s critical to keep your business growing. It fends off copycats and is cost-effective.”
Do you have a question? Contact us via email [email protected]! And remember to subscribe to the Gerber Finance podcast, and be sure to rate how you liked it.
To read past Gerber Finance blogs, click here.