Calling all entrepreneurs, we both know you have “it” - that secret sauce that sets you apart from your competitors. This is your competitive advantage - the thing that will draw in your ideal customers and take you to the top of your industry.
Legally, your secret sauce is known as your intellectual property (IP).
When you think of IP, what comes to mind?
Most likely it’s patents, trademarks, and copyrights, and you’re absolutely right, but what you might not know is that those are only a few of the ways to protect what makes you and your business unique and special.
Taking action to protect your secret sauce a.k.a. IP must begin now.
In part one of this two-part blog, we set out some things you might not have considered when it comes to protecting your secret sauce to your employees, business relationships, and customers.
The first place you can protect your secret sauce is in your employment agreements. Employees are given unique access and insight into your IP, therefore each employment agreement should contain language stating that anything an employee creates while working for you belongs to your business and that they will keep your company secrets confidential during and after their employment with you.
Company Intellectual Property Policy
With business growth comes change and the need for more hands-on deck, so it’s a good idea to address IP at a company level as well. An IP policy makes it clear to employees how various types of IP are to be used, handled, and shared. This builds IP protection into the foundation of your business and makes it more likely your IP will be protected long term.
Written Customer Agreements
IP protections aren’t just for those who work within your business. They should also be considered when working with customers outside your four walls. A written customer agreement should include language about who owns the rights to the services or products offered under the agreement and language around confidentiality, protecting you on a wider scale.
Using Vendor/Supplier Agreements
Working with outside vendors is a common part of any small business but can also pose a risk to your IP. Vendor agreements should therefore contain provisions to make sure vendors are legally required to keep anything they learned that isn’t available to the public confidential, both during and after their work with you.
Sometimes it’s applicable to allow someone to use your IP. When that happens, it’s important to be clear about your expectations. You should therefore have a license agreement with them that explains how they can use your IP, how much they pay for that use, how long they can use it for, and the repercussions of not following the terms in the license agreement. This will give you some peace of mind as you grow your business.
Registering for a Copyright
Chances are you’ve already heard of this one but aren’t exactly sure how it protects your IP. A copyright gives the creator of original work (AKA you) exclusive rights to it, such as the right to use, display, copy, distribute, modify, sub-license, etc. This is usually the case for a specific period of time. Copyright may apply to a wide range of creative, intellectual, or artistic forms, or "works". It's important to note that you cannot copyright ideas and information themselves, only the form or way they are expressed. You do not need to register a work in order to have copyright, but you must register the copyright if you want to sue another party for infringement.
Using Copyright Notices
If you don't want to formally register for a copyright, you can discourage inappropriate use of your IP by placing copyright notices on things you create like your website, advertisements, materials, documents, presentations, etc. Copyright notices are a simple way to inform your customers, potential customers and employees what they can and can't do with something you created. Often it’s assumed that if this is on your content then your work is copyrighted, but it’s important to know that registering a copyright and using a copyright notice are two different things.
Filing for a Trademark
Here’s another common one! A trademark is a word, name, logo, symbol, device or combination used to identify the source of goods or services to prospective purchasers. Filing for a trademark provides notice to the public of the company's claim of ownership of the mark, and gives you legal presumption of ownership nationwide and the exclusive right to use the mark on or in connection with the goods/services listed in your registration. In other words, it protects your IP and allows you the sole use of that specific mark.
Designating Something as a Trade Secret
Trade secrets are much more commonly understood. Officially, a trade secret is a formula, practice, process, design, instrument, pattern, or compilation of information which is not generally known by the public and gives your company an economic advantage over competitors or customers. By making your IP a trade secret, your business gains protection as long as the information remains confidential and continues to function as a trade secret.
Filing a Patent
Our final method for protecting your secret sauce is a patent. A patent grants an inventor the right to exclude others from making, using, selling, offering to sell, and importing an invention for a limited period of time, in exchange for the public disclosure of the invention. To receive a patent, you would need to file a claim that meets the minimum requirements of patentability, which typically include novelty (originality) and “non-obviousness”. Sounds like secret sauce to us!
That concludes our two-part blog on how to protect your secret sauce! How many of these steps have you taken to protect your organization? Did any of these surprise you?
Failing to take steps to protect your secret sauce opens the door to competitors, employees and/or customers taking what you have worked hard to create and making it their own, either intentionally or unintentionally. If you want to take action to protect your secret sauce, we are here to help. Schedule a consultation with us here.