Are You Great at What You Do?

C- Level Magazine August 2014

Have you ever examined a timeline of a particular company’s corporate history? One of the things that always strikes me is the continuity of the company’s mission. There are many great examples right here in Arizona. Cold Stone Creamery, a franchisor, prides itself on providing a fun, bright, and energetic environment and a signature process for turning its customers’ “ice cream dreams” into realities. In fact, this company takes such pride in what they do, that they rate their ice cream an 11.5 on a scale of 1 to 10. Many people take tremendous pride in their own businesses. Indeed, this appears to be the rationale behind the expression that most business owners use: their business is their “million dollar baby.” A tremendous amount of time is often spent developing the business in its initial years. Businesses capitalize on these efforts by franchising or selling the rights to duplicate the business. One vital area to consider before undertaking that complex process is intellectual property (IP) protection.

Regardless of your business, when you excel over your competition, you may have a business you can franchise. Franchisors sell their expertise that is in the form of IP. To franchise, you must have IP that is well protected. While businesses differ in their products, services and company culture, one common element among all businesses is that they have some kind of proprietary element that distinguishes them from competitors. When a point of pride for the business involves any kind of proprietary information or creations, the first step is to build a strategic plan for identifying and appropriately protecting the great things that your business does. Viewed in this way, an IP plan is akin to a business plan that takes an objective look at the prospects of the proposed business and places it alongside of the business’s goals and mission.

Begin by identifying the intangible assets that your business owns. IP can include confidential information and trade secrets, trade names, trademarks, domain names, industrial designs, copyright, and a host of other intangibles that an IP attorney can help you identify and monetize. Next, have an IP attorney consider the status of your IP, including ownership of important proprietary assets, whether IP audits have been conducted, and whether IP assets have been registered. You can put your business in a strong position with a proper understanding of how various types of IP protection can be used. Depending on the assets that you are trying to protect, it may be best to secure trade secret protection over patent protection if you don’t want to tell competitors the details of what makes your business great. With this knowledge in hand, you can create your IP protection and enforcement plan. An IP enforcement and protection plan spells out the strategy for obtaining the right official registrations for each IP asset. The plan also identifies vulnerabilities of a company including threats from competitors, independent contractors, or distributors, and addresses how the business’s IP protections will function to prevent misappropriation. If a third-party misappropriates a proprietary asset, an enforcement plan outlines what the business will do to protect its assets and its position in the market.

Here is a quick example to show you how a strategic IP plan can be put into action. Assume the business produces and sells an electronics product that is both unique and designed to make consumers’ lives easier. The business’ strength may be the unique product features as well as the brand name associated with the product. Both of these components can (and should) be protected through different IP vehicles. Here, features of the product may be patentable, so you would be well-advised to seek patent protection to ensure that your product is not copied. Additionally, your brand name must be trademarked because it represents a distinction in the minds of customers, as a positive label for the experience they have when they purchase your product. Additionally, to protect your patent and brand, you may need to draft thorough distribution and employment contracts that specify who owns the IP and provides protection and quality control measures for everyone to follow. As a maker of electronics products, you may distribute your product through brick-and-mortar and digital platforms. The vulnerabilities to your product may manifest themselves at this level, where cybersquatters and counterfeiters may attempt to use your brand to drive traffic to their own website and distribute a knock-off product.

Your business may be something that you see as a million dollar baby that is eligible for franchising. If so, knowing your business’s point of pride and what makes your company great are important building blocks for beginning the IP auditing and planning process. After all, million dollar babies can bring million dollar problems, especially if your business has not properly identified and protected its proprietary assets. The right IP advice can guide you through this foreign territory.

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