Guest Editorial

by Laraine Burrell, Greenberg Traurig, LLP

INTELLECTUAL PROPERTY:

The forgotten business asset

Most businesses own some form of Intellectual Property but may not know it. Intellectual Property comes in many forms which when properly used, marketed and protected, can become a valuable business asset. Many businesses fail to recognize this form of property ownership. They do little to develop or market it, and do not recognize the potential value it can add to a business. Intellectual Property is often a forgotten business asset.

Intellectual Property can be defined simply as, “something created by the mind and put into a tangible form.” Working from this definition, any business, whether in its start-up phase developing a name or logo for its identity, or a global giant generating new advertising and promotional campaigns, is creating intellectual property. A marketing department generating a catchy jingle for a television commercial creates intellectual property. An advertising department designing eye-catching brochures for a business’s new service creates intellectual property. A public relations department writing a press release with photographs creates intellectual property. A developer designing new packaging for a product creates intellectual property. Any time a business’s creative ideas are put into a tangible medium, or are used before the public, Intellectual Property is created.

Property is the key word. Business owners must recognize that when their own distinctive proprietary materials are created and developed, and are used to identify and promote their business’s goods or services to the public, the marketing materials become a property, or assets of the business. Within time, these assets can increase in value particularly the more well known a product or service becomes to the consumer. It is important for owners to recognize not only that they have these assets, but also how those assets can be protected.

Intellectual Property is often divided into three primary categories: trademarks, copyrights, and patents. Business owners should recognize the distinctions between the three and into which category their creative materials fall. Only then can they determine the appropriate steps necessary to protect those assets.

Trademarks
Trademarks, Service Marks, or Marks can be any word, name, symbol or device, or any combination of these, used by a business publicly in commerce to distinguish its goods or services from others in the marketplace. Simply put, this is a business’s brand; its public identity. The value of a trademark is in its power to alert the consumer to a particular good or service and to distinguish it from all other brands in the marketplace. When a business develops a good reputation for selling a superior product or service, and when consumers want to be able to find that product or service again, the mark becomes perhaps the most important indicator of where they can go to find it. This makes a good Mark a valuable business asset.

The more a Mark is advertised and promoted to the public, and the more the public recognizes it as the source of the business’s goods or services, the more valuable it becomes. A consumer who sees yellow arches on the side of a road instantly recognizes that hamburgers and fries are sold at that location. A consumer who sees a stylized man on horseback with a mallet on a shirt recognizes it as being made by Polo®. These marks are valuable because they create instant brand identification in the minds of the consumer of the goods offered under those marks. This instant identification should be every business’s goal.

Under trademark law, a mark begins to develop rights from the time it is first used in commerce. These are rights at common law. These rights may be strengthened through a state or federal trademark registration. However, the basis of trademark law is not to protect the rights of the business owner, but to protect consumers from being confused between goods or services sold under similar marks. The law does not want a consumer to intend to purchase one product but mistakenly purchase another. Similarly, a business owner does not want to lose sales because consumers seeking out his business are being confused by a competitor’s similar looking mark, and patronize the competitor instead. A business owner secure in his right to use a mark can seek to prevent others from subsequently using a similar mark for similar goods or services in a manner, which may cause consumer confusion and harm to his business.

Copyrights
Copyright protection is given to “original works of authorship” fixed in a “tangible medium of expression.” The rights are generally given to the creator or author. Only a minimal amount of creativity is required to meet the originality requirement. A work is “fixed” as soon as it stored in a medium from which the public can perceived, reproduced or otherwise communicate. Once the idea becomes tangible, such as when artwork is drawn, or music is recorded or written down, copyright protection exists. The copyright is owned by the author of the work unless some other agreement has been entered into between the author and a commissioning party who has caused the work to be created.

Examples of copyrightable materials a business may create include a unique layout for a brochure incorporating text and images. Photographs, television commercials, uniquely designed packaging, a Web site, advertising copy, even a one-page flyer are each protected under copyright law. Protection applies to two and three-dimensional objects. A unique three-dimensional building design is copyright protectable, as is a bottle design for a fragrance, or a business’s theme song. Web sites can be protected by copyright to ensure the design, text and images are not infringed by being copied by others and pasted into other Web pages. In the United States, if infringement does occur, and the owner has registered its copyright, the owner has the right to sue the infringing party. If the owner has a federal copyright registration in place at the time the infringement occurs, the owner may be entitled to statutory damages of up to $150,000 per infringement. Copyrights can be a valuable business asset.

Patents
Patents are monopoly grants from the government allowing an individual or entity the exclusive right to manufacture, use or sell an invention for 20 years from the date of filing the patent application, or 14 years for an ornamental design or appearance of an article. This monopoly gives a patent value. To be granted a patent, an invention must provide a beneficial use, be something new and not a replication of a prior work, and non-obvious to someone skilled in the particular field the patent falls under. Utility, patents can be granted to such things as machines, processes, manufactures, and composition of matter. For example, new drugs, new machines or new devices may be protected by patents.

Unlike trademarks which are created by use, and copyrights that vest upon creation, patents only obtain existence when they are granted by the government, thus registration is important. Patents cannot be filed more that twelve months after the first public use or disclosure. Similarly, copyrights must be registered by United States citizens and entities within five years of their first publication.

Too often a business does not adequately plan for or consider its Intellectual Property. These assets should be evaluated to determine not only what they are, but also to ensure they are being fully exploited and protected. Businesses can do this by having an Intellectual Property audit performed by an Intellectual Property Firm. When businesses enter into any agreements in which the business assets are considered, intellectual property should be part of that consideration. For example, when business owners want to dissolve a company that owns intellectual property, what happens to that property once the business is no longer in existence? These are questions that are often overlooked.

Businesses advertise, market and promote themselves through their Intellectual Property which often takes a considerable economic investment. The savvy business owner will ensure that his investment in these assets is not lost through failing to understand what these assets are, and then failing to protect them against the usurpation by a competitor. He will ensure he has conducted an inventory of his proprietary materials, identified how they must be protected and can best be used to gain value for the business, and then ensure they are properly protected. Successful businesses do not forget about their Intellectual Property assets. v

Laraine Burrell is an associate with the Las Vegas office of the international law firm, Greenberg Traurig, LLP and her practice focuses on intellectual property, entertainment law and cyberlaw. Her representations include Wynn Las Vegas, Station Casinos, the Bellagio, MGM Mirage, Del American, Christopher Homes and The Related Group, both in transactional and litigation matters. Laraine regularly appears as a guest professor at the William S. Boyd School of Law at the University of Las Vegas, NV.

Be sure to attend Laraine’s seminar in Las Vegas at the VDTA Show -- her class will be held Feb. 23 from 11:30 a.m. to 12:30 p.m. at the Las Vegas Convention Center, Room N107.

Reprinted from Floor Care Professional, February 2007