Intellectual property is a growing and increasingly important realm in the business world — but exactly what is intellectual property?
A short answer might be that it’s ideas and creations of the mind along with some confidential contracts. Intellectual property consists largely of patents that cover inventions; trademarks for such things as logos, corporate symbols and slogans; copyrights that apply to written works and music, and trade secrets that usually involve contracts that protect things like the Coca-Cola formula or development of a new product.
Intellectual property disputes — often contentious disagreements over who invented, wrote or created something first — are nothing new. But they are becoming more common in a digitized world made smaller by the Internet and mass communications.
Owning and leveraging intellectual property can represent huge bucks; neglecting or ignoring intellectual property issues can lead to major headaches and huge losses. Several Alabama lawyers say businesses and entrepreneurs need to understand the value of both protecting their intellectual property and leveraging it through marketing, contracts and other agreements.
Says Will Hill Tankersley Jr., an attorney at Birmingham-based Balch & Bingham: “I think it’s fair to say every business nowadays has more intellectual property than they know they have. And they also have more opportunities to unnecessarily end up in an intellectual property dispute.”
Such a dispute can be more than a nuisance.
India Vincent, an attorney with Burr & Forman in Birmingham, recalls a nonprofit organization that had to scrap its entire marketing/fundraising campaign about a year after it started because of a trademark infringement.
That nonprofit’s campaign title was the same as another’s, except for one word. And although the two nonprofits had different causes and were in different states, the infringing organization was forced to go to Plan B. It dumped a large portion of printed materials it had prepared for Plan A, redid its website and then essentially repeated a ton of branding work.
“They had to go back and do the brainstorming again — the selection of a new trademark, the logo, the colors, ” Vincent says. “The time and materials cost in the process was incurred again. They had to increase their fundraising to pay for the new work.
“Situations like that can be avoided with a relatively minimal investment on the front end, a couple of thousand dollars to be sure you do that clearance search first. But it can cost hundreds of thousands on the back end, depending on how far along you get in using the new name before you get that demand letter.”
|
Scott Brown, an attorney with Maynard Cooper & Gale in Birmingham, notes that businesses — especially retailers and others who buy and resell goods — can find themselves in intellectual property disputes even though they might be several steps from where the initial infringement occurs.
He recalls, for example, a situation in which retailers were sued by the patent holder of the store locator function on the retailers’ websites. In another situation, retailers were sued because of a copyrighted design that had been incorporated into clothing they were selling.
“It wasn’t the design of the clothing, ” Brown says. “It was actually a graphic design that was on the fabric of the clothing. So even though those retailers were two or three steps away from where the infringement took place, they were part of the litigation. Even if you think you don’t deal with intellectual property rights, you actually do if you are buying things to resell, or if you’re buying services.”
Because of that kind of risk, Brown says that businesses should pay close attention to intellectual property issues in contracts they have with suppliers. “When it comes to intellectual property, you have to be able to play offense and defense — to prevent others from infringing on your intellectual property and to ensure that you are not infringing anyone else’s, ” he says.
Though disputes attract attention in the field of IP, most of the disputes occur over things most people would never otherwise notice. Consider, for example, the University of Arkansas’ response to Hog Wine, which was part of a vineyard’s product line marketed primarily to sports fans of different universities.
“If you ever wonder why somebody would ever name something Hog Wine, the answer is, ‘If you’re an Arkansas fan, that is exactly what you want to have at your tailgate party, ’ ” Tankersley says. “Unfortunately, the purveyors of Hog Wine didn’t stop at a label that said ‘Hog Wine’. Their label looked a lot like the hog, the actual razorback that the University of Arkansas has trademarked.”
Arkansas, like the University of Alabama has done in similar trademark matters, took steps to protect its razorback trademark. “The truth is, the reason that brand has value is that the University of Arkansas has put value into it, and it just isn’t right that somebody else should be able to (benefit from a trademark) like that. We were able to resolve that situation, ” says Tankersley, who represented Arkansas in that matter.
Knowing whether to bob or weave isn’t always simple in this area, but some choices are better than others. “You can’t just use your intuition and really expect to get a good result to an intellectual property question, ” Tankersley says.
“The things that might make sense to you sitting in your chair trying to run a business or create something may or may not be consistent with the law, and the best thing you can do is not just roll the dice. It’s to get some help to make sure you’re doing something that’s reasonable.”
Avoiding IP Troubles
The realm of intellectual property (IP) is vast, and it can vary from deeply complex to exceedingly simple issues. Here is a short list of essentials that businesses and other organizations might consider, based on interviews with some of Alabama’s leading intellectual property lawyers.
|
Consider an intellectual property audit
This is done through discussions with an intellectual property lawyer that center on a company’s scope of work and marketing materials. “This helps determine what might be protectable and what we might file for registration — there are a lot of nuances in these things, ” says David Quittmeyer, an attorney with Hand Arendall in Mobile.
Establish an IP culture
Businesses should establish a culture that encourages the protection of ideas generated in the workplace. That includes training and the use of agreements with and incentives for employees to share their ideas with the company.
“That can be a challenge, because a lot of folks are pretty humble, ” says Frank Caprio, an attorney with Bradley Arant Boult Cummings in Huntsville. “Scientists and engineers, for the most part, aren’t braggers. They can solve a problem on the manufacturing floor and not think much about it when, in fact, their solution to a problem might not be innovative only to their company. It might also be a licensing opportunity to other similarly situated companies.”
Conduct IP searches
With a relatively small investment up front to conduct a patent or trademark search, businesses might save themselves a lot of money in the long run. Says Quittmeyer, “The search aspect is big in both patent and trademark law. There are different levels of searches, there are search companies that do this professionally and get into great detail about things, and there are databases available in a general way or by search that you can do yourself. The government databases themselves have really improved in the past 10 years or so and are great tools for doing searches.”
Think Internet
Even if you do business only in Alabama or only in one town, be aware that you might be infringing on intellectual property of businesses elsewhere — and vice versa. Says India Vincent, an attorney with Burr & Forman in Birmingham, “Before, you might have had a logo in Alabama, and somebody might have had essentially the same logo in Montana that you didn’t know about, and it was no big deal. But, suddenly, because of the Internet, it’s a big deal.”
Think online security
Always think about intellectual property when dealing with contracts related to your website’s security and other online issues.
Contracts and trade agreements
Always be sure intellectual property concerns are covered in all contracts, especially those with suppliers of products and services.
Don’t forget insurance
Consider insurance to pay for unexpected losses stemming from intellectual property setbacks.
Charlie Ingram and Art Meripol are freelancers for Business Alabama. Both Ingram and Meripol are based in Birmingham.
text by charlie ingram • photo by Art Meripol
