By P.E. McQueeney

Intellectual property can be as useful for the small business owner as it is for the large business owner. Many U.S. companies have utilized their intellectual property to leverage their success. For example, Willis Carrier's company earned its success based on his invention for air conditioning in 1911. The Carrier name is still well-known today. Jacques-Yves Cousteau invented the aqualung and subsequently became synonymous with oceanographic research. George Eastman invented his hand-held camera in 1886 and Melvin Bissell invented his carpet sweeper in 1876. Even today, invention continues to propel companies into the public arena. The Segway human transporter was recently invented by Dean Kamen to help ease traffic problems.

Of course, not all business owners have to be inventors to be successful. Levi Strauss was a Bavarian immigrant who seized his business opportunity during the California gold rush. Originally intending to sell canvas for tents, he learned that durable pants were in short supply. The gold miners complained that his original canvas pants chafed, so he replaced the canvas with a French fabric from "serge de Nimes," which was soon Americanized into Denim. Over 150 years later and Levi's is still a very strong brand. Another non-inventive successful intellectual property concept is the Beanie Babies. A simple stuffed teddy bear became a Christmas season must-have simply from proper marketing.

You now understand that intellectual property can be an asset to your business. But what, exactly, is intellectual property? Intellectual property is the name given to several different intangible products that result from creative origins. Intellectual property includes copyrights, trademarks, patents and trade secrets. Each area of intellectual property has its benefits and detriments.

Willis Carrier, George Eastman and Melvin Bissell all utilized the patent system to launch their business enterprise. A patent is a grant by the Federal government of a limited monopoly for any new and useful process, machine, article of manufacture or composition of matter, or any new useful improvement thereof. Limited monopolies are great for business because you become the only source of goods or services. The downside is that patent protection costs approximately $10,000 and takes approximately 2-4 years to obtain. A U.S. patent is valid for twenty years from the filing date, if the maintenance fees are paid. In the United States, this limited monopoly is only available from the Federal government.

As we discussed above, you do not have to be an inventor to have a successful business. Levi Strauss sold pants, but built his company image through proper branding, or trademark, usage. A trademark is a word, name, symbol or device that is used in trade to indicate the source of goods or services. A business owner can benefit from a variety of trademark protection mechanisms. The first mechanism is known as common-law protection. This form of protection costs nothing, but only provides protection in the area in which the mark is used and requires more effort (and money) to enforce. The second mechanism is state trademark protection. The price of this form of protection varies from state to state (the government filing fee for Florida is currently $87.50/class). A registered Florida trademark provides the owner with trademark protection throughout the state of Florida, even if only using the mark in the Miami area, and provides the first two elements to establish infringement in a court of law (that the mark is valid and ownership). The third mechanism is Federal trademark protection. This is the most expensive form of trademark protection available in the United States (currently $335/class), but provides coverage throughout all fifty states and the first two elements to establish trademark infringement in a court of law. A business owner can own many marks in many forms (common-law, state and Federal) and can choose the form of protection desired based on the strength of the mark and the marketing plan associated with the mark (why spend the money on a Federal trademark if the product is only going to be available for one year?). Trademark protection can be extended into infinity, with the necessary maintenance requirements.

In addition to trademarks, many businesses use copyrights. Copyrights protect artistic expression. A photograph or painting provides two examples of copyright works. However, a web page or advertisement can also be copyright protected. There are two mechanisms of protection for copyrights; common-law and Federal. Similar to common-law trademark protection, common-law copyright protection costs nothing. Federal registration of a copyright provides an owner with the first two elements to establish infringement in a court of law (that the copyright is valid and ownership) and usually only costs $30. Federal protection also provides the potential to obtain statutory damages and attorneys fees if successful. The negative aspect of copyright protection is that it only protects against copying. A valid defense to an allegation of copyright infringement is independent creation. Furthermore, two identical works can obtain registrations from the Federal government. Registered copyright protection for works created after 1978 lasts for 70 years after the death of the author.

The final form of intellectual property protection is trade secret protection. Most people conjure up the image of the formulation for Coca-Cola when trade secrets are discussed. However, even small businesses may have trade secrets, such as client contact lists. The definition of a trade secret is any information, including formula, patterns, compilations, programs, devices methods, techniques, and/or processes, that derive independent economic value from not being generally known, and is the subject of efforts that are reasonable to maintain secrecy. Many states, including Florida, have adopted trade secret statutes. However, many businesses utilize employment agreements and non-disclosure agreements to further emphasize the statutory requirement of maintaining secrecy. Trade secrets are enforceable for as long as the secret remains secret.

"Wow," you say to yourself. "I just want to sell widgets. All this information is way over my head!" Actually, a lot of this information is basic and you subscribe to it everyday. You buy a certain brand of spaghetti sauce or gasoline based on name-recognition (trademark). You read a certain newspaper or watch a certain television program because you like its layout and expression (copyright). But as a business owner, you now have the job of making it work for you. Your first step is to protect yourself. Make sure all your employees sign employment agreements that require them to assign to your business any copyrights or patents developed within the scope of their employment. After that, let the creativity flow!