July 21, 2022
In business, services or products are sold. When you enter the market with a new offer, there are probably already people serving the clients you are looking for and generally serving a similar need. If your business is successful in attracting customers, you will also attract competition – who sooner or later will try to offer similar products. If the competition is established – it will probably benefit from greater purchasing power, economies of scale, more market penetration, better connections with distributors and access to cheaper raw materials that you do not have. This means that they will produce a similar or better product at a lower price – putting pressure on the innovator (which could be you) of the original product. Sometimes this pressure can bankrupt the innovator, particularly since he has invested significant resources in developing his new product while competitors benefit from what they call a ‘free ride’ on creativity and innovation; copy your proposal as much as possible.
Competitors may also attempt to capitalize on your access to customers by mimicking the marketing and advertising of your offering in some way. On the other hand, you may inadvertently do the same; even due to ignorance. For these reasons and others, the small and medium business should consider protecting their innovative and creative works with the mechanisms of intellectual property.
Many years ago – the assets of companies were focused on the tangible – buildings, machinery, equipment. That was a big part of the value of a company. Today much of the value comes from intangible assets – related to specialized knowledge, technology, creativity, and reputation. Within these intangibles is the intellectual property of the business.
If you have or plan to have a business, then you will have intellectual property or will face an existing one. In areas like:
• the trade name of the company,
• the name of the product, its image or commercial style
• presence on the internet and social networks,
• publications and promotional material,
• the technology behind products,
• software, designs, prototypes,
• business model and plan
• internal processes
• Internal information that gives you an advantage over the competition
What do we mean by intellectual property? Many things, but mainly four big areas. The best way to visualize these areas is knowing the legal protection for each one and its definition.
• Trademark laws protect- Words, phrases, symbols, designs, or a combination of these.
• Copyright laws protect – original artistic or literary works, musical works, works of art, computer programs, movies, maps and technical drawings, etc.
• Patent laws- protect inventions (utility and design). It provides the owner with the exclusive right to prevent others from commercially exploiting the invention for a limited time in exchange for disclosing it to the public.
• Trade secret laws – protect confidential business information from being used by competitors.
To the extent that you apply legal protection to the intangible assets of your company, you acquire certain exclusivity over the use of these assets to exploit them in your business, although in some cases for a limited time; which in itself can give you a competitive advantage. If the industry you operate in has low barriers to entry, you will be more vulnerable to competition that will find it easy to invade the market with few resources in a short time. Intellectual property will help you curb your competitors’ efforts to capture your market.
The process of taking advantage of intellectual property laws requires being proactive – identifying your assets, devising a plan to protect them, and executing it in a timely manner. This implies making a detailed inventory of these assets, deciding which law best suits the product and its cost-effectiveness. Some points of this action plan may include the following:
• Identify and Evaluate – the types of intellectual property used in the business and the value to your business;
• Decide – what intellectual property you are going to protect and how you are going to protect it;
• Take action- to assess the feasibility, availability and process to register it and if there is a possibility that others will register it-– avoid that the competition arrives before.
In the end it is always advisable to start by protecting at least the brand. It may not have much value initially, but the success of the product will immediately increase its value and will be a crucial part of the product’s image and identity.
The long-term profitability of your business will depend on maintaining a competitive advantage, and that competitive advantage comes from special knowledge, from doing things in a particular way, projecting yourself to the public in a certain way that is successful. Your business operates surrounded by competition – to the extent that the competition copies any of these things you lose advantage over others and even if they did not send that – there are laws that protect – but they work when they take advantage of them before the problem arises and it’s up to you to take advantage of them.
Copyright(c). You cannot copy content of this page.