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From literary works to branding symbols, intellectual property rights help business owners protect their most important assets. — Getty Images/Ridofranz

Intellectual property (IP) rights are one of the most valuable assets to any small business owner. Why is it that so few take the appropriate steps to protect their IP?

In the last decade, global giant Amazon has grown its patent portfolio from fewer than 1,000 active patents to nearly 10,000. To drive expansion, Amazon acquires any IP that threatens or supports their business goals. Understanding your intellectual property rights allows you to protect your business from the outset.

What is intellectual property?

The World Intellectual Property Organization defines intellectual property as creations of the mind or intellect, including inventions, literary and artistic works, designs, symbols, names and images used in commerce. Patent, copyright and trademark law all fall under the umbrella of intellectual property in the United States.

Copyright law protects the expression of your idea. Patent law protects the process and method of your concept, and trademark law protects the actual name and branding of your creation. IP law fosters an environment where creativity and innovation are incentivized, protecting the exclusive control of an intangible asset.

[Read more: A Guide To Intellectual Property Laws]

Why is understanding IP important?

Two of the most precious resources for small business owners are time and money. IP doesn’t often make the list of top concerns by smaller merchants. IP is something big companies need to worry about, not the small guys, right? Wrong.

The U.S. Patent and Trademark Office receives half a million applications each year. SMEs need to utilize IP ownership at an early stage to ensure the safety of their products or ideas. Similar to actual property, the amount of "land" available is limited, so plant your flag as soon as possible. Owning your IP helps you protect your innovations, guaranteeing more commercial opportunities in the future. It can even create a new source of revenue for your business by allowing you to license your goods and services to third parties.

Patent, copyright and trademark law all fall under the umbrella of intellectual property in the United States.

How to purchase IP rights

Some types of IP rights in the United States are automatic, but it's worth registering to ensure ownership of your idea in all its glory.

Patent

Once you’ve determined that your product is patentable, you need to register your invention with the United States Patent and Trademark Office. Typically, this is done with the help of a patent attorney. The majority of entrepreneurs will apply for one of two types of patents:

  • A utility patent, which protects the technology behind an invention, including its functionality and structure.
  • A design patent, which applies to the look of an original design.

If you publicly disclose your invention without a patent, you have a grace period of one year to register under U.S. law. Patent protection lasts for 20 years from the date of filing. The fee for an application can vary from $300 to $660, and there are various discounts available for non-profit organizations and small entities. The creator or originator of this idea automatically owns the patent. Ownership can be assigned to a corporate entity after the license is approved.

[Read more: How to File a Patent]

Trademark

In the United States, the first party who uses a trademark commercially owns the rights to it. Trademark registration is, therefore, not a legal requirement, but it comes with certain benefits. Complete your application through TEAS. Calculate your fees on a per-class basis based on listed goods and services. A standard form costs $275 per class.

Copyright

For both published and unpublished copyright, no registration is required, but it's strongly advisable. To register, you must complete the application form for the United States Copyright Office. The average processing time for all claims is four months, and a standard online application costs $55. Any works created and registered after January 1, 1978, are protected for the life of the author plus an additional 70 years. Generally, the creator owns the copyright. In an employer-employee agreement, the copyright belongs to the employer.

CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.

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Published March 06, 2020