Companies large to small are looking for ever-more competitive ways to succeed. By developing and incorporating creative and useful innovations into products and services, intellectual property (IP) has played a vital role in giving a range of tools to help companies grow and drive their overall success. In fact, studies show that today up to 80% of the value of a typical business is IP. And as of 2020, more than 84%—$19 trillion—of the S&P 500’s market cap is represented by intangible assets like IP.
Despite the critical importance of these assets, however, even the largest corporations aren’t always properly valuing or protecting their IP.
Without legal protections like patents, trademarks, and copyrights, your IP is at serious risk of being stolen by your competitors, hackers, and even your own employees, vendors, independent contractors, or clients. Worse yet, if you don’t take your IP seriously, you are likely undervaluing your greatest assets, not capitalizing on the most valuable part of your business, and staying stuck in a model of getting paid only for the actual hours you work, rather than for the ideas and value you create.
Understanding The Value Of Your IP
If even the biggest corporations aren’t properly protecting and leveraging their IP, we’re guessing that you probably aren’t either. If this is the case, this article is aimed at serving as a wake-up call for you to start taking your company’s IP seriously and implementing strategies to ensure these highly valuable assets are protected and leveraged to the fullest extent possible.
One reason business owners fail to protect their IP is that unlike more tangible assets like real estate, vehicles, and office equipment, most don’t understand how to properly value and protect their intangible capital. Many times, by overlooking your IP, you fail to pay attention to your business’ most valuable assets until something goes wrong. This might include receiving a cease-and-desist letter after another business claims your name, or a former independent contractor you used to work with begins selling services to your customers in competition with you, or you discover that you don’t actually own the source code of a website you paid someone else to create for you.
Protecting your IP can begin with trademarking the name of your company, registering for copyright protection for the copy on your website and in your advertisements, ensuring that all of the agreements you have with independent contractors and vendors include work-for-hire provisions and that all agreements with clients and customers have limitations-on-use provisions, ensuring your business owns what it creates.
Protect & Leverage The Value Of Your IP Assets
In order to ensure you are able to properly identify and protect your IP, you should have an experienced business lawyer like us perform an IP audit for your company. An IP audit is a comprehensive, systematic review that identifies all of your IP assets, and evaluates all of the potential risks and opportunities associated with those assets.
An IP audit can not only identify your IP assets, it can also help ensure you have all of the necessary IP protections, such as trademarks and copyrights, and that you own the full spectrum of rights related to your IP in all of your legal agreements. Moreover, the audit can allow you to fully leverage your IP to ensure you are getting the maximum value possible from each of these assets. At the same time, the audit can identify potential areas of risk related to your IP, such as instances where your company may be in danger of infringing upon another brand’s IP rights. From there, you will be better able to take the appropriate corrective actions, and implement more robust IP management strategies.
Finally, conducting an IP audit can also help ensure that these assets are not only protected and leveraged during your life-time, but that your heirs are also able to fully benefit from these intangible assets in the event of your potential incapacity or upon your eventual death. As with any tangible asset you’d seek to protect and pass on to your loved ones, you can achieve the same benefits for your IP by including these assets in your estate plan. And as your Family Business Lawyer™ firm, protecting and passing on your IP through estate planning is one of our specialties.
Maximize The Value Of Your Company’s IP
If you haven’t reviewed your IP and its value recently, schedule time with us at Truest Law to complete an IP audit. When combined with our proprietary Life & Legacy estate planning services, our IP audit will give you the peace of mind that your company’s most valuable intangible capital is not only fully protected and leveraged during your lifetime, but that your loved ones will be able to benefit from these creations for generations to come. Contact us today to schedule an audit for your company.