“We all owe a fiduciary duty to the stakeholders of our companies to manage and harvest our intangible assets” – Andrew Sherman, Harvesting Intangible Assets
Rachel Rodgers, an intellectual property and business lawyer for digital entrepreneurs, visited Sloan to speak to students about protecting intellectual property and unleashing small business assets. Using Santiago from the Alchemist as an example, Rachel compared intellectual property as the hidden treasure that is right under your nose. In a world in which nearly 75% of business assets are intangible IP, it is more important than ever to uncover and capitalize on the intellectual property in your business.
Using a number of descriptive anecdotes, Rachel described four types of intellectual property and the way in which each can be protected.
- Trade Secrets – Using Carib Delights as an example, Rachel illustrated how a cheese spread recipe constitutes a trade secret. The issue that arises is if Carib Delights registers this recipe, it will then be public knowledge. Thus, they maintain their recipe as a trade secret, limiting the number of employees that know the complete recipe, and having all employees sign an NDA.
- Copyright © – All of us (artists, authors, architects, software developers and engineers) have works to copyright. In fact, 94% of small businesses use content marketing, meaning that thousands of hours and dollars creating content are at risk without IP protection.
- Trademarks – More obviously, brands with mass appeal such as Chanel and Apple need to protect their trademark to prevent copycats that capitalize on brand prestige and recognition.
- Patents – Lastly, Rachel used Dyson Vacuums as an example of the need for and exercising of patent protection for new, cutting-edge technology.
While this IP is truly valuable to small business owners, we live in a world where nearly $200-250 billion of IP is stolen per year in the US alone. Rachel then used five real-life examples to portray ways in which small businesses have or have not protected IP and the outcomes of each scenario. One of the most memorable success stories she described was Mixed Chicks, a hair product line for curly haired, biracial women. Unable to expand in time to meet the demands of Sally Beauty Supply, the small company was forced to turn down a large purchase agreement. Sally Beauty then launched a line of hair products with a similar chemical make-up and eerily similar packaging called Mixed Silk. Mixed Chicks took the case to court and was awarded a $8.1 million settlement for trademark infringements. On the flip side, Rachel also described another David and Goliath tale, but this time with Goliath (aka Burger King) winning. The “original” Burger King, was a small mom-and-pop burger restaurant. The now empire, Burger King, stole the name and immediately trademarked their name, restricting the expansion of the original Burger King, eventually putting the mom-and-pop store out of business.
While all these examples demonstrate that protecting IP is extremely important, the real question remains, how do small business owners go about protecting these valuable assets? Rachel went on to describe the process and benefits of:
- Officially registering IP
- Issuing DMCA Take Down Notices
- Blacklisting IP infringers on Google
- Sending a cease and desist order
With these simple and relatively cheap options, small business owners can avoid expensive lawsuits and prevent other companies profiting from your hard work. If protected correctly, your company’s IP can be an insurance policy,a retirement account, and a quality of life guarantee.
Rachel Rodgers is an intellectual property and business lawyer for digital entrepreneurs. Her one-of-a-kind practice, Rachel Rodgers Law Office, is run entirely online making her services accessible and convenient for small businesses with intellectual property and an online presence. Her secure online law office was one of the first of its kind. Rachel and her practice have been featured in Fast Company, MSNBC, The Washington Post, Forbes, and various other media outlets. Rachel co-wrote an entertaining business law guide for entrepreneurs called “Small Business Bodyguard: Cover Your Bases, Cover Your Assets, Cover Your Ass”.