Intellectual Property – introduction

What is intellectual property?

For many companies, such as those in the pharmaceutical business, IP is much more valuable than any physical asset. Authoritative sources report that each year, intellectual property theft costs U.S. companies about $300 billion.

From a legal standpoint, there are four types of intellectual property. IP registered in one of those categories with state and federal agencies is protected by law, and if infringed upon or otherwise abused, the infringers can be prosecuted.

Categories

Patents

When you register your invention with the government – a process that can take more than a year – you gain the legal right to exclude anyone else from manufacturing or marketing it. Patents cover tangible things. They can also be registered in foreign countries, to help keep international competitors from finding out what your company is doing. Once you hold a patent, others can apply to license your product. Patents can last for 20 years.

Trademarks

A trademark is a name, phrase, sound or symbol used in association with services or products. It often connects a brand with a level of quality on which companies build a reputation. Trademark protection lasts for 10 years after registration and can be renewed “in perpetuity”. But trademarks don’t have to be registered. If a company creates a symbol or name it wishes to use exclusively, it can simply attach the TM symbol. This effectively marks the territory and gives the company room to prosecute if other companies attempt to use the same symbol for their own purposes.

Copyrights

Copyright laws protect written or artistic expressions fixed in a tangible medium – novels, poems, songs or movies. A copyright protects the expression of an idea, but not the idea itself. The owner of a copyrighted work has the right to reproduce it, to make derivative works from it (such as a movie based on a book), or to sell, perform or display the work to the public. You don’t need to register your material to hold a copyright, but registration is a prerequisite if you decide to sue for copyright infringement. A copyright lasts for the life of the author plus another 50 years.

Trade secrets

A formula, pattern, device or compilation of data that grants the user an advantage over competitors is a trade secret. It is covered by state, rather than federal, law. To protect the secret, a business must prove that it adds value to the company – that it is, in fact, a secret – and that appropriate measures have been taken within the company to safeguard the secret, such as restricting knowledge to a select handful of executives. Coca-Cola, for example, has managed to keep its formula under wraps for more than 117 years.

Protection Structures

There are many benefits to be derived from offshore owning intellectual property through a Trust, Foundation or a basic Company. TBA, in conjunction with specialist law firms, can arrange for patents, trademarks and copyright to be registered offshore.