intellectual property in business plan example

Intellectual Property Business: Everything You Need to Know

Intellectual property is a means by which you own your business identity, technology, works of authorship, logo, slogans, or trade dress. 15 min read updated on February 01, 2023

What is Intellectual Property Business?

Intellectual property is a means by which you own your business identity, technology, works of authorship, logo, slogans, trade dress , and any other practical expression of the ideas that drive your business forward.

Intellectual property is vital to all levels of your business. From your initial business plan to trademarks , patents, and copyright , having the right representation and knowledge to protect those things that make your business unique is essential to your success.

What Is the Intellectual Property-Business Connection?

Everything important about your business aside from the actual people that run it, is somehow tied up in intellectual property. You could say that your business is the sum total of all of the intellectual property that form and relate to your concepts, practices, goods, and services.

One important aspect of intellectual property is that it must have commercial value and be protectable by patent, copyright, trade- or service mark , or trade secret laws. Specific kinds of IP can include brand names, works of literature, paintings, discoveries, formulae, physical inventions, written information, registered design work and music.

Why Is Intellectual Property Important to my Business?

Intellectual property is the key to drive growth and competition in the market place. It's essential to your company—in many ways, its heart and soul. Your ideas and the way you express and use them are as (or more) important to your company than its physical assets.

In addition to protecting these assets, they help you to:

Build a brand identity

Analyze information from the IP of other companies to gain a competitive edge

Increase your revenue stream from limiting or licensing competition to use your IP

Increase the commercial value of your company

Increase market access

Gain financing and venture capital

Increase the value of your brand

Create strong business partnerships

Protect your freedom to operate , and reduce infringement risks

Preserve geographic market segmentation by restricting exports and imports

How Do I Protect My Intellectual Property?

Protecting your intellectual property is essential to maintaining your competitive edge in the marketplace, and is accomplished in one of four ways :

Trade Secrets

Abstract ideas are not subject to the above protections. In no case is an abstract concept or idea granted specific intellectual property protection . There must be some expression of the idea, which is what is protected.  

Copyright protects works of authorship. That includes literary, musical, dramatic, graphical, sculpted, photographic, recorded, filmed, architectural, and website works, as well as the interface, form and function of software, and the specific code used to make the software work.

Copyright provides the owner with exclusive rights to use, display, copy, exhibit, modify, and otherwise present and distribute the work. Such protection is automatic the moment a work is created, but can also be registered with the federal government for additional protections in court.

Trademarks are those things that make up your brand. Certain phrases, logos, unique words, and graphic design elements can be trademarked. Trademarks defend against confusion or dilution of the brand in the marketplace. Like copyright, trademark is automatic upon the first time you use such a mark in business, and mark it with a ™ symbol.

However, for stronger protection in courts, it is highly recommended that trademarks be  registered with the USPTO (U.S. Patent and Trademark Office). Registering such a mark carries a presumption of validity in court and allows you to use the ® symbol after the mark. In addition, after five years of constant use you can file for your mark to become incontestable, which adds strong additional protections.

Trademarks have to be distinctive in order to gain protection. You can't for example, just call a deli, "Sandwiches," and trademark that word. Even a derivative of the word, like "Sammiches," would be hard to trademark, as it's still simply descriptive of the product. The more distinctive the word is, the easier it is to trademark, but you still need to create a market identity, so finding a distinctive term that still evokes your product is a delicate balancing act. The mark's association with your business denotes its strength, which is vital if you need to defend your ownership of it.

The Difference Between a Trademark and a Copyright

The difference between a trademark and a copyright is what they protect. Trademarks are registered with the USPTO and last for ten years. They protect any name, symbol, or logo that is used for branding the goods of a business. Copyrights , on the other hand, are used to protect creative works. This can include films, books, songs, and many other works of art. A copyright is registered with the Library of Congress. It lasts for the lifespan of its original owner plus seventy years.

Patents protect your actual inventions—methods, processes and physical creations which are "novel" (unique), "non-obvious," and which solve a problem in a useful way. Patents last for 20 years, during which time you have exclusive rights to use, manufacture, ship, import, sell or make available for sale your invention.

There are three types of patents :

Utility patents , the most common, form, protect physical inventions, chemicals and processes. These are the type of patent that's usually referred to when someone talks about patents .

Design patents protect the unique form, appearance or design of an item.

Plant patents protect the development of a new variety of plant via asexual reproduction in a controlled setting.

The elements of a patent require that your work be "novel," or truly unique and previously unknown in the territory or country where the patent is held. It must be non-obvious, meaning that anyone with ordinary skill in the associated art wouldn't have come up with the same idea through a basic leap of logic. Finally, it must be useful, that is, offer significant use that is beneficial in solving a problem.

Patents protect physical inventions and specific mixtures of ingredients or chemical compounds, as well as those acts, methods and processes related to industrial or technical use. If it's a unique physical product or the process for producing a physical product, a patent can be sought to protect it. Obtaining a patent requires that you publicly reveal the object in full detail.

It can take up to three years (sometimes longer) to complete the process of a patent, so it's important to start the moment you have something that is patentable . It's also important to note that you have one year to file for a patent following the revelation that your invention exists, be it from a public demonstration or published description.

Trademarks, Business Name Registration, and Domain Names

Trademarks, domain names and business name registrations are three related but very different things. Trademarks protect your brand in court from use by another. Business names can be registered with your state to allow you to function as a corporation, LLC or other entity for tax purposes. Domain names are web address URLs. Each of these is mutually exclusive in terms of the legal protections it offers, and each must be pursued separately.

Trade secrets , finally, are those things which give your business a competitive edge, and which if they were known would harm your ability to compete in the marketplace. Legal protections for trade secrets are limited and are usually defined only through licensing and non-disclosure agreements which outline the penalties for violating the secret.

The down side of this protection is that once a secret is revealed, it can no longer be treated as a trade secret. Trade secrets also do not protect you from someone reverse-engineering or parallel development of the same process or formula.

On the up side, so long as you maintain your secret, you can gain exclusive income far longer than the 20 years offered from a patent. Some of the best examples of this are the secret formulae for drinks like Coke, Pepsi and Dr. Pepper.

IP Protection Strategies

Protecting your intellectual property does not stop at filing the right paperwork, but requires active work to defend. Make sure that your clients are aware of your ownership and make active use of non-disclosure agreements.

Keep an eye on independent contract workers. These can be some of the largest dangers for IP theft. They also may attempt to claim ownership of any IP they developed while working with the company, after their contract is up. Use contracts that clearly define the ownership of any IP developed in the course of the partnership.

Don't be afraid to make use of cease and desist letters or to contact potential infringers and advise them to stop their infringing activities. You may need to file a lawsuit if they fail to obey, but active legal protections are vital to maintaining your IP.

Do your homework. Always make sure that your IP isn't owned by someone else already when you pursue a new market. Also ensure that the new market's laws will protect your IP rights adequately. Transferring IP to the new market will carry associated costs, which you'll need to consider.

Above all else, remember that your IP is an asset to your business. Protecting it is a necessity, not a luxury. It is an essential part of your costs and budget, every bit as important as your employees.

Fallacies about Intellectual Property Business

There are a number of fallacies regarding intellectual property that can prove devastating to businesses, including:

It's not worth the time and effort to register IP: If you fail to register your trademarks, copyrights and patents, before you know it someone will produce knock-off products and it will fall upon you to prove that you had the property first. Even worse, if your competitor files a patent on your invention before you do, they legally own it!

Once I have a trademark, my property is safe: This may or may not be true. Even with a valid trademark, people can still challenge your ownership. The trademark ownership also doesn't stop other people from buying a domain using that trademark.

A patent automatically allows me to produce something: This is a basic misunderstanding in patent law . Patents don't give you the right to produce; they give you the right to stop others from producing. In addition, patents can and often are challenged in court.

A trademark or patent in the U.S. protects me everywhere: Again, this carries varying degrees of truth. In general, IP rights have to be gained country by country. There are certain trade agreements that offer limited protection across borders but these are by no means universal.

The myth of the Patent Troll : Coined in reference to a lawsuit between holding company NTP and Research in Motion, who market the Blackberry, over a wireless e-mail delivery patent, this myth dismisses those who collect patents as a business model as parasitic trolls out to hoard property and never let anyone have it except at a premium.

The truth is, many inventors are "idea people" who partner with others to produce their concepts. Thomas Edison was one such inventor. These people aren't generally out to stop others from using products, but to allow as many people access as possible through licensing agreements .

An Overview of the Business Plan

Your business plan is far more than a report you write to get funding. It's a detailed strategic document you will use to guide your business, engage in commercial practices, bring products and services to market and grow in the future. The elements of a good business plan are:

Company description, mission statement, objectives, status, and parties of interest (managers and shareholders)

Description of goods and services

Goals for future development

Discussion of target audience, market and clients

Discussion of competitors

Company marketing strategy, distribution channels and sales

Discussion of how the business will be organized, from supply and manufacturing chains to outsourcing and purchasing issues, to employees and technology partners

Financial planning outline, including pro-forma balance sheets, profit and loss projections, estimation of required funding and outline of available funding sources.

Business plans serve a dual purpose. Internally, they are valuable for guiding your decisions and defining your vision and objectives for commercial and technical development. They provide useful indicators and targets to manage corporate performance.

Externally, your business plan will explain your company to investors and partners to act as an important aid in fundraising and business collaborations. They will both raise interest in your activities as well as serve to demonstrate your plans for the future which are based on a solid understanding of your own assets and strengths. They serve to plant your business solidly inside a larger technology and commercial community.

The Intellectual Property-Business Plan Connection

Intellectual property is deeply entrenched in your business plan, which describes your assets, resources, and strategy for success. It is vital to include a strong IP management and protection policy to make sure that all of your practices are defended against misuse and corporate espionage.

Your IP will have a major influence on the business model you choose to operate. Your business plan will refer to this IP and the intellectual property rights you hold to describe what makes you unique from competitors.

It also outlines the resources you can access to establish positive relationships with partners, investors and clients. IP and IPR become a key factor of your how solid and valuable your business is in the marketplace, and will have an influence on the strategic position you hold.

IP Information and the Business Description

How you will handle intellectual property rights is a key part of your business plan. If you describe it and place the proper value upon it, it can add a great deal of value in turn to your company.

On the other hand, if it is not clear or detailed enough, it can actually harm the value of your company in the eyes of potential stakeholders. This is because your company and the goods and services it provides have inherent value, but only if they are properly protected.

It's important that you avoid uncertainty or a lack of clarity. Failure to do so can lead to exploitation of your IP by competitors seeking to undermine your business. Further, defining these issues in your plan helps to make sure they are not only clearly defined for you and your business, but that they are in line with your mission and goals.

Dealing With Technical Details and Specs

When drafting your business plan, you need to decide the level of technical detail and specifications you want to include. This depends on how detailed you need to be in order to make the technology you're using understandable to readers, as well as defining the value it adds to your target audience.

Ideally, you'll want to keep the focus on the "value added" level as your business plan is an outline of your strategy for success in the market. Focus on descriptions of what the product does, how it works and what value it adds. Avoid overly technical jargon in your descriptions. Instead, focus on readability and clarity.

Your business plan is generally considered privileged information and will remain generally confidential. As such you'll want to be careful who has access to the details within. This also means, however, that you can (and should) describe your products and associated trademarks as well as the brands you'll use to market them. Most successful businesses find it helpful to use a trademark for the overall brand, and then offer various modules and solutions under it.

Protecting IP Ownership Within the Business

Your business plan should be absolutely clear on how you will handle the ownership and commercialization of innovations and technology developed by various groups of employees, with involvement from researchers, designers and suppliers from outside the company.

The easiest way to handle this is that ownership is transferred to the business. In order to gain private investors , you may in fact have to adopt this option. If you choose to pursue shared ownership of the IP with the creators, you will need to have a default exclusive and long-term licensing agreement.

Investors and Intellectual Property

Investors focus heavily on IPR when they perform due diligence before offering any funding. They will check on the status of IPR the company owns, and consider all of this when they value the business. They will also review the extent to which the company's rights can be registered to restrict competition from copycats. The more exclusive your property can be held, the more valuable it will be come.

If you cannot register a certain IP, you will need to explain how the advantage offered by that IP will be maintained into the future. You could, for example, limit access to the IP to very specific people inside the company as a trade secret with binding non-disclosure agreements. For products like software packages with a limited lifecycle, a commitment to continual innovation and improvement can maintain a competitive edge.

Another important factor in maintaining your IP edge is to register web domain names (.com, .net, .biz, .eu and all variants) for all of your properties, even if you don't plan to use them. This will stop other people from gaining the domain and using it to create confusion in the marketplace.

Third Party Contracts

Any contracts you intend to keep with third party researchers, investigators, suppliers or other service providers need to be identified in the body of your business plan, with a clear policy for the development and maintenance of relationships with these partners, who become a form of stakeholder in your business.

Your partners need to have access to the necessary elements to fulfill their responsibilities to you, but not restricted in a way that they cannot themselves remain competitive. As such, define what access they will have to your IP for product development, but avoid overly restrictive or locked alliances.

Explaining your approach to partnerships in your business plan will allow you to create a roadmap for the future. It will define the parameters of your future collaborations and clarify any gray areas that might exist. Some options include:

No access to IP or proprietary information is required or involved in the agreement.

Specified patents are licensed to a partner, who may integrate the property into their own products within the country.

Collaboration and R&D agreements exist for all innovations which clearly define ownership of any new IP. If the IP is owned by the partner, the company has the right to negotiate for a first option on worldwide, exclusive sub-license on any resulting assets.

Sales Strategy: Global vs Local Markets

It is a common mistake for entrepreneurs to focus heavily on the global market potential of their product in their business plan, while ignoring the portion of the market that is immediately available and achievable. While having a big picture is admirable, it's vital to use your business plan to focus on the details of the small-scale operations and strategy of your company as well.

In order to meet the needs of an increasingly diverse marketplace, you will have to establish a range of partnerships, each of which has to be carefully reviewed and drafted to protect your interests. Failing to take care in these agreements can end up with you accidentally granting unlimited IP access to a partner who could later become a serious competitor.

Thus, when you define your sales strategy for the future, be as detailed and clear as possible in how you will handle:

Long-term relationships

Exclusive partnerships

Limited partnerships

Territorial partnerships

Contractual targets and milestones

Commercial Exclusivity

Never grant commercial exclusivity unless there is a specific need for it justified by your global strategy —a worldwide device manufacturer, for example, who can effectively fulfill your product manufacturing and distribution channels.

You will need to be sure the price of such exclusivity is reflected in the revenues you gather from the commercial agreement . All of this needs to be accounted for in your business plan.

Every partnership, for example, includes multiple arms. These could include (but are not limited to):

Product sales

Product manufacturing and distribution

Licensing agreements and fees

Fee-based services and transfers related to skills and competencies

Outsourcing of know-how and services

At the other end of the spectrum, be sure that any co-existing direct or indirect sales channels are organized in such a way that they don't jeopardize one another. Having a clear strategy and vision when it comes to commercializing your IP creates a very clear explanation of the roles each market segment and territory will play. These could include (but are not limited to):

Skills and services for equipment installation and operation

Access to specific designed commercial and/or industrial markets

Access to an established infrastructure for sales, distribution, marketing, fulfillment, maintenance support and customer service

Past licensing agreements of goods and services from other companies

IP in Your Financial Plan

The financial plan area of your business plan describes both your beginning financial status and your plan for maintaining and growing the business into the future from a financial standpoint. The more accurate and detailed your valuation of your company is, the more credible you will look to potential investors.

In order to properly know what goes into the logic supporting the numbers, and to be able to answer questions put to you, you will need to understand the value of your IP assets and IP-related revenues. Not only do your IP assets help in terms of getting investor buy-in, they can serve if properly valued as security against loans.

Use respected, well-known and clear accounting methods when you value your business assets and intellectual property. Keep your figures realistic and rooted in proven methodology and an understanding of the benefits and drawbacks of the method you choose.

When you negotiate with partners, investors or lenders you will likely have to further negotiate the values in question, as they are, in the end, only estimates. You will, however, have to incorporate a fixed value for your IP in your projected balance sheet.

Maintaining Realistic Expectations

It's important to keep the expectations for standard licensing agreements realistic and minimal. Clearly state them in formal collaboration agreements. Such standard rates can be found by doing your homework online, checking business databases and  performing internet searches .

If you expect that IP-based revenues will represent a large percentage of projected revenues, you may want to consider describing the global policy in your business plan. Consider include clauses in licensing agreements that, among other considerations, include:

Performance agreements

Pricing options and discounts

IPR, Market Potential and Analysis

Successful entrepreneurship requires keeping your eyes open for potential opportunities at all times. Your business plan should precisely describe not only chosen market segments to target, but how you will approach those markets in light of competitors and alternative technologies.

Searching patent and trademark registers can be vital to provide you important information about your competition. This will in turn, allow you to better map out your business' future and strategy. Not only does this information give you the freedom to market and use your technology, it gives you essential information about how to go about your marketing.

Market monitoring and analysis provides a clear understanding of your competition, which in turn lets you develop a strategy to place yourself in the market. This adds value to your business plan. Know the strength, strategies, weaknesses and market presence of all of your relevant competition, and summarize this information in a table within your plan.

Business and Trade Organizations

Various business organizations, trade groups and chambers of commerce can help you to better use and leverage your IP. They can advise and aid you in increasing your market competitiveness, provide leadership and guidance in economic issues, help you to attract new partners and customers, particularly if you are operating in a sector of innovation, and can offer new sources for income generation.

Another important source of help for any intellectual property issue is an outstanding IP attorney. The attorneys at UpCounsel carry many decades of combined experience in trademark, copyright, patent and all issues related to protecting intellectual property. Representing Harvard, Yale and other top law schools in the nation, they are among the top attorneys available in their specialized areas. Post your legal need in the UpCounsel marketplace to find the legal help you need to establish and protect the IP that's so vital to your business.

Hire the top business lawyers and save up to 60% on legal fees

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Intellectual Property: A Primer for Businesses

Issues surrounding intellectual property rights in the U.S. have a significant impact on the business community. Here’s what businesses need to know.

September 15, 2021

Key Takeaways

• Intellectual property law protects the unique work of companies, inventors, researchers, engineers, artists, entrepreneurs, and more.
• The three major types of intellectual property rights in the U.S. are trademarks, patents, and copyrights. 
• Unauthorized use of intellectual property is enforceable by federal law, and it can have serious consequences for businesses.

Intellectual property (IP) is a key driver of economic growth and innovation in business. In an increasingly competitive and crowded market, intellectual property protections offer incentives to keep pushing for new advances.

Just as companies, inventors, researchers, engineers, artists, and entrepreneurs depend on intellectual property law to protect their work, consumers trust IP to provide them with safe and authentic products . Not limited to creative fields, nearly every U.S industry produces or uses some form of intellectual property.

Here’s what businesses need to know to avoid IP infringement and protect their intangible assets.

What is intellectual property?

As the World Intellectual Property Organization (WIPO) defines it, intellectual property refers to “creations of the mind, such as inventions; literary and artistic works; designs; and symbols, names and images used in commerce.” The intangible assets that differentiate your business may encompass everything from your company’s brand name, logo, slogan, innovative technology, or even proprietary designs, recipes, and processes.

How to protect intellectual property

The three major types of intellectual property rights in the U.S. encompass trademarks, patents, and copyrights.

Trademarks protect the symbols, words and slogans that identify goods and services, such as your company name, tagline, or logo. Trademarks are designed to avoid confusion, prevent imitation, and allow brands to distinguish themselves.

In the United States, you obtain commercial rights to a trademark simply by being the first to use it. However, registering a trademark with the United States Patent and Trademark Office (USPTO) offers added benefits and protections.

Once registered, a business may use the ® symbol immediately following the mark. For example, Nike’s iconic tagline “Just Do It®” is a registered trademark of the brand. Therefore, others can’t use it without permission or license. The (TM) symbol used directly following a mark denotes an unregistered trademark.

Patents protect processes, methods, and inventions that are deemed novel, non-obvious, and useful. Patents give your business an advantage by granting exclusive rights to make, sell, and distribute the invention for a period of 20 years. Patent applications must be filed with the USPTO.

In a recent example of intellectual property at work, strong patenting norms enabled the development and deployment of three FDA-approved COVID-19 vaccines at record-breaking speed.

Copyrights apply to tangible and intangible creative works such as art, musical compositions, motion pictures, architecture, and other artistic expressions. Copyright exists from the moment you create the work, without requiring any official filing. However, federal registration of a copyrighted work deters others from duplicating it and also strengthens a business’ case in the event of an infringement.

Trade secrets

Additionally, while trade secrets are not registered with any government office, businesses can protect their commercially valuable confidential information, either by keeping it known only to a limited group of persons or through the use of non-disclosure agreements (NDAs) . Famous trade secrets include the Kentucky Fried Chicken and Coca-Cola recipes.

Each method has unique benefits, limitations and scope. This means the right type of intellectual property protection for an organization will depend on a variety of factors including the type(s) of work and core business objectives. In many cases, companies will recruit the help of an IP attorney to advise on protecting their interests.

What is intellectual property infringement?

IP infringement occurs any time a protected work is copied or otherwise used without the owner’s permission. Unauthorized use of intellectual property is enforceable by federal law, and it can have serious consequences for businesses, including financial penalties, damage to the company’s reputation, and in extreme cases, criminal charges.

How to avoid intellectual property infringement

Businesses of all sizes can take measures to prevent innovations from being copied or stolen. A successful IP management strategy also includes safeguarding your organization from committing IP fraud, whether knowingly or unintentionally. Here are some tips for protecting your organization from intellectual property infringement.

• Conduct an IP audit: ​ Conducting a thorough IP audit allows companies to identify potential IP assets, as well as any related threats, whether from their own side or by others.
• Take advantage of established IP protections: Register your patents, copyrights and trademarks to establish public ownership of your creative assets and innovations.
• Keep an eye on your competitors: Consistently monitoring industry competitors helps companies catch intellectual property theft early.
• Use media wisely: To avoid violating IP rights, businesses should create original graphics, content, and music for advertisements or use only royalty-free media. Alternatively, be sure to obtain a license as well as explicit, written consent from the owner.
• Educate employees: Create organization-wide awareness around the importance of respecting intellectual property. Educate your employees on best practices and available resources.
• Consult with an IP attorney: If you believe your organization’s intellectual property has been compromised, or you’ve been accused of IP theft, consult with an IP attorney immediately.

Additionally, special considerations should be taken for businesses entering foreign markets , or in the event of a merger or acquisition, since:

• IP rights are only valid for the country in which they were granted
• IP rights do not transfer automatically when a company gets acquired
• IP should factor into the selling price of a company

Intellectual property protections are not only vital to creating jobs and advancing economic growth in the United States, but also for saving lives and solving problems that impact communities across the globe. By understanding, using and respecting the different types of intellectual property, your business plays a vital role in supporting global innovation and economic growth.

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Intellectual Property: Why It’s Important To Your Business

Krista Walters - Guest Contributor

What is your intellectual property?

How can you protect your ip, ip protection in practice, learn how intellectual property applies to your business and why it’s essential to protect it..

NOTE: This article is intended to inform our readers about business-related concerns in the United States. It is in no way intended to provide legal advice or to endorse a specific course of action. For advice on your specific situation, consult your legal counsel.

Did you know that intellectual property theft costs the US as much as $600 billion every year? And it’s not just big corporations or government institutions that are targeted. Even small businesses feel the brunt of IP theft, and they’re far more vulnerable to the damage it causes.

Based on the enormous costs, it’s easy to see that protecting your business’ IP should be a priority, no matter what the size or scope of your venture.

Intellectual property (IP) is a legal term that covers a range of aspects of a business. IP can be something physical, or it can be intangible concepts that you've created. It’s essentially the elements of your venture that have been designed or developed, that make the business you own unique.

Because it’s part of what makes your business unique, it’s essential that your IP is properly protected . It’s the cornerstone of how you market your company, the foundation on which you’ve established your reputation, and possibly even why customers choose your business over a competitor.

Without proper protection, other companies can use your IP to their advantage, potentially taking away your unique selling proposition (USP).

Your intellectual property is something unique to your venture, such as a new product on the market. For example, perhaps you’ve created a new type of hard-to-scale security fence, or designed a brand-new type of bicycle that the business you own will sell. This product that only your business offers sets you apart from others selling something similar.

IP can also be more intangible, such as your business model. If you’ve revolutionized how people order fast food or are selling sunglasses in a way that no one else is, that methodology and practice is your IP. The way you sell is your USP, not what you’re selling. Customers will choose you for the experience rather than just the product.

Your IP includes elements such as your company name, logo, and slogan. It even covers your corporate identity (CI) , which includes fonts, colors, and the way you brand your business. If another company uses something too similar to your CI, especially if they’re a direct competitor, you could lose sales because of customer confusion.

There are many legal ways to protect your IP and ensure no other business can take your concepts or products and use them. The way you protect your business's IP will depend on what it is, and which laws it falls under.

1. Trademark

This is the most common type of IP protection for businesses. You can cover your entire CI through a trademark , including your company name, the design of your logo, and the way you brand your business. It can be tricky to trademark a slogan if the words or phrases are common in everyday speech, but it’s worth investigating if you think it’s unique to your business or industry.

If you have a particular product that you’ve designed or created, you can trademark the name and logo used for that product, too. This prevents people from copying the product and using the same name to potentially confuse customers.

A patent protects an invention. This covers the products or tools that your business has specifically designed and built. By using a patent , you’ll be able to prove that you invented the product you’ve made to sell or use as part of your business and that you’re the only one with the exclusive right to use it.

The invention doesn’t have to be unique for you to obtain a patent. However, you do have to show that you’ve improved upon the design of an existing concept, or done something to make your version unique. For example, you could patent a concept and plans for a new external hard drive for a computer or a new pair of running shoes. These products exist, but your particular plans are your own, and possibly superior to the other patents on those products.

3. Copyright

Copyright comes into effect in artistic fields to protect the works of painters, writers, musicians, and composers. You can place a copyright on a poem, novel, film, a piece of music (both written and a particular recording), a painting, or sculpture. These types of works belong to the person who created them, and the copyright allows them to claim ownership should someone else want to use the artwork for their business.

4. Confidential information

If there’s something about your business you want to keep secret from competitors, you can protect the information under this legal framework and should an issue arise, the law protects your interests. Confidential information can be anything from your business plan to your marketing strategy. It can also include your business process and internal software, or procedures that you use to make your business unique.

Prevention is definitely better than cure, so the saying goes. This also applies to looking after your IP. It’s much better to have protection in place beforehand than having to defend your right to your IP once an incident occurs.

Ensure documentation is up to date: The most important thing to do is ensure that you have all of your IP documentation in order and that it gets updated whenever related changes occur in the business. Out-of-date IP documentation will not protect you if someone tries to copy your work.

Use NDAs for employees: Threats to your IP can come from anywhere, including your employees. If you have proprietary strategies or procedures in your business, it’s essential that you include a protection clause in all employee contracts. This includes a non-disclosure agreement (NDA) that covers the period of employment, and for a defined period after they are no longer with the company. You should consider using this kind of agreement if you have any products, hardware, or software that you use as part of your operations that you do not want other companies to find out about.

Use NDAs with third-parties: Remember, if you’re looking to secure necessary funding from a bank or investor, you can request that an NDA be in place before presenting your concept or product. It’s always good to be able to tell the person giving you money what makes your company unique, but it’s not advisable to give away trade secrets in the process.

With the costs of IP theft already being incredibly high it just makes sense that as a business owner, you protect your interests. Doing so could be the difference between success and becoming a statistic.

Are you interested in becoming a guest writer for Capterra? Reach out to [email protected] for details.

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About the author.

Krista Walters has been an active editor and writer for 8 years. She typically covers topics around graphic design and UX research. When she’s not busy writing articles, she sometimes does illustration work for clients in need of creative flair.

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What Is An Intellectual Property (IP) Strategy?

Intellectual property is all about strategy.

It is a similar to a business plan but focused on your Intellectual Property (‘IP’) assets.  They include brand, trade secrets, data and know-how and are key operating assets in many businesses, driving growth and underpinning cash flows. Developing an IP strategy ensures that the overall business plan incorporates these key business assets. Businesses that have a robust IP strategy, designed to withstand investor due diligence, often grow faster and are typically more successful in securing lending and investment at higher valuations.

Who needs an IP strategy?

Every management team or executive board who wants a plan to build or improve the competitive moat around the business.

An IP strategy often begins with the development of a new or the refinement of an existing formal IP strategy document (often a ppt deck) that acknowledges, rates and showcases your IP assets, such as patents, brands, software, trade secrets and know-how. It will also summarize how you plan to increase the strength of these assets, fill any gaps in your IP moat and explain how that will help you accelerate the growth of your business and differentiate you from your competitors.

Key activities flowing from this IP strategy include:

• IP improvement  – the creation of an action plan of IP asset improvement activities, outlining the key activities, timetables and the anticipated outcomes and positive impact on the business;
• IP policy  – the review and refinement of relevant internal IP policies and processes, usually linked to IP creation and protection;
• IP training  – internal staff training focused on the recognition, protection and management of IP assets;
• IP asset deployment in joint ventures, partnerships and licensing  – these events often create valuable third party validation of the strength of your IP.  Its therefore important to both protect and exploit IP assets in these scenarios, whilst seeking to achieve a return on your investment; and
• IP reporting  – both internal and external reporting.  Typically focused on external IP counsel activities (if any), and internal reports on IP strategy progress to CEO, CFO, CTO, general counsel, and any other designated staff.

Of course the costs of developing the various forms of intellectual property needed in that competitive moat can vary considerably:   

• Trade secrets  may involve minimal expense to record and protect; whereas  
• Patents can cost many tens or even hundreds of thousands of dollars over their lifespans. 

Therefore, since many companies have limited budgets for IP asset creation, protection, and acquisition, it is essential that you have a clear and easily understood IP strategy and understand the true costs, risks, and benefits in of that strategy.

Learn more about intellectual properties today! We offer details on all facets of intellectual property including formal intellectual property , informal intellectual property , intellectual property licenses , and so much more.

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Intellectual Property

By Entrepreneur Staff

Intellectual Property Definition:

The ownership of ideas. Unlike tangible assets to your business such as computers or your office, intellectual property is a collection of ideas and concepts.

There are only three ways to protect intellectual property in the United States: through the use patents, trademarks or copyrights. A patent applies to a specific product design; a trademark to a name, phrase or symbol; and a copyright to a written document. All three methods have limitations--there's no one perfect way to protect an idea.

Copyright Protection

• literary works
• musical works, including any accompanying words
• dramatic works, including any accompanying music
• pantomimes and choreographic works
• pictorial, graphic and sculptural works
• motion pictures and other audiovisual works
• sound recordings
• architectural works
• computer programs (sometimes the graphical user interface) and websites

Copyright protection gives the copyright holder the exclusive right to copy the work, modify it (that is, create "derivative works"), and distribute, perform and display the work publicly.

Ideas or concepts do not have copyright protection. Copyright protects the expression of the idea, but not the ideas themselves. For example, if I ask you what a chair is, you get a picture in your head; the picture I get in my head is different from the picture you get in your head and probably also different from the picture Buffy gets in her head. These are the "ideas" of what a chair is. However, if you were to draw the chair you envisioned in your head or use words to describe that chair, it's an "expression" of the idea--and that's what's protected by copyright.

Generally, the only protection for ideas and concepts is through trade secret law and/or confidentiality agreements, which provide a contractual remedy for misuse or disclosure of the idea.

• Your work must be novel. This means it must not be known or used by others in this country, or patented or described in a printed publication here or abroad, or in public use or for sale in this country more than one year prior to the application for patent.
• Your work must be non-obvious. This means it must not be obvious to a person having ordinary skill in the pertinent art as it existed when the invention was made.
• Your work must be useful. This means that it must have current, significant, beneficial use as process, machine, manufacture, composition of matter or improvements to one of these. According to the Patent Office: "The word 'process' is defined by law as a process, act or method, and primarily includes industrial or technical processes. The term 'machine' used in the statute needs no explanation. The term 'manufacture' refers to articles that are made, and includes all manufactured articles. The term 'composition of matter' relates to chemical compositions and may include mixtures of ingredients as well as new chemical compounds. These classes of subject matter taken together include practically everything which is made by man and the processes for making the products."

Patent protection requires full public disclosure of the work in detail and therefore precludes maintaining any trade secret protection in the same work.

A trademark can be registered in three ways:

• By filing a "use" application after the mark has been used.
• By filing an "intent to use" application if the mark has not yet been used.
• In certain circumstances in which a foreign application exists, you can rely on that.

The (TM) mark may be used immediately next to your mark. The ® registration symbol may only be used when the mark is registered with the PTO. It is unlawful to use this symbol with your mark before receiving an issued registration from the PTO.

What qualities make for a strong trademark? The cardinal rule is that a mark must be distinctive. The more distinctive it is, the easier your trademark will be to enforce. This is why so many trademarked products have unique spellings.

Trademark rights last indefinitely if the company continues to use the mark to identify its goods or services. When the mark is no longer being used, the registration is terminated. The initial term of federal trademark registration is 10 years, with 10-year renewal terms.

Trade Secrets

Trade secrets refer to items such as recipes that are unique and provide a business with a competitive advantage, but which cannot be safeguarded under current forms of idea protection such as copyright, trademark or patent. The best form of protection for these items is to keep them a secret. One of the most famous and best-kept trade secrets is the formula for Coca-Cola.

The best way to secure the information for a trade secret is to restrict access to the secret and have individuals and companies sign nondisclosure agreements with you should you enter into a relationship with them which will require them to know some aspects of the secret. If someone independently develops or reverse-engineers your trade secret, there's nothing you can do. If someone does leak it, you can sue for theft. Suing, however, cannot stop the person from using the leaked information. So although you may get money from the suit, you lose the larger potential profits you could have made from the idea. Still, if your luck holds and your trade secret remains secret, royalty income from it can last significantly longer than the patent period.

More from Inventing

Exclusive legal rights that protect works of authorship, composition or artistry. A copyright protects the publication, production or sale of the rights to a literary, dramatic, musical or artistic work or computer program or to the use of a commercial print or label.

An object, process or technique that displays an element of novelty. In certain circumstances, legal protection may be granted to an invention by way of a patent.

A form of protection that provides a person or legal entity with exclusive rights for making, using or selling a concept or invention and excludes others from doing the same for the duration of the patent

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Intellectual property strategy: Your IP is a company asset

Intellectual property is an asset.

Intellectual property (IP) is a company asset and should be managed as such. An IP strategy is simply a plan—consistent with the company’s business goals—to acquire IP assets and leverage the most value from existing IP assets.

The definition of value is assessed in the context of the business goals . Even though IP assets may play a central role in the business strategy of a technology or biotechnology company, acquiring and owning IP will not overcome poor business strategy and make a company successful.

Strategy for acquiring and managing IP

There are usually drafting, filing, prosecution and maintenance costs associated with acquiring and managing IP.

A company should consider what their return on investment is for any money spent on IP , and take into account any cash-flow management issues. Potentially, depending on the overall budget, the money may be better spent elsewhere, such as monetizing a web-based technology product or service faster.

However, IP assets should also be considered from a long-term point of view. For example, if your biotechnology business depends on acquiring patent protection in order to attract outside investment, then that is money well spent.

Consider all types of IP

There are multiples types of IP—mainly patents , trademarks , copyrights and confidential information —which are all different legal tools designed for different purposes.

Patents are not the only kind of IP. While keeping in mind the business goal, consider all types of available IP protection. This is the only way to ensure you are pursuing the right type of IP strategy. Ask yourself these kinds of questions:

• Is protection as a patent, trademark, copyright, trade secret or industrial design/plant breeders’ right appropriate?
• What will the chosen type of IP protection help me accomplish?
• What am I trying to accomplish and will IP help me do this?

IP policies on acquisition, exploitation, monitoring and enforcement

A company will usually need to develop policies on the acquisition, exploitation, monitoring and enforcement of their intellectual property.

Acquiring IP includes managing the chain of title to company-developed IP. Employee agreements and independent contractor agreements should clearly deal with IP ownership issues .

Take stock and create an inventory list of your company’s existing and potential IP.

Exploiting IP is maximizing the acquired IP’s value. You may do this by protecting your company’s IP in the form of brands, technologies or secrets. But it may involve other commercialization and monetization strategies  .

Monitor the internal and external use of your IP. Again, this is not just limited to one specific type of IP; you must systematically monitor all types of IP in your portfolio.

Once IP rights are acquired, you must take more steps to enforce those IP rights ; if you do not, then there is no consequence to a potential infringer. Unfortunately, enforcing IP rights through litigation is costly and uncertain in outcome. Deterrence and negotiations may be viable alternatives.

Use the CIPO, USPTO and WIPO databases for your research

Canada, like many other jurisdictions, has online patent and trademark databases . It is possible to extract competitive intelligence from these databases.

Read and review the wares and services associated with trademarks for other companies. Examine the state of the art in a specific field of research by conducting patent database searches . In other jurisdictions, such as the US, there may be further caveats that need to be considered before conducting patent research.

A potential pitfall is that patent searching is complicated since any public disclosure from around the world may be relevant. For example, did you check the international patent cooperation treaty (PCT) applications?

On a practical level, you can do an ad-hoc analysis. However, a more thorough analysis requires the skills of a patent agent, patent searcher or patent lawyer.

Marketing value of sharing information and open collaboration

At times, information or processes developed by a company does not fit into a category of intellectual property or cannot be monetized through any traditional strategy.

Sharing that information through social media, or as a whitepaper, may demonstrate expertise in an area and can build goodwill in the brand; doing this may have advertising and marketing value. Of course, carefully analyze the implications of any disclosure before releasing the information.

Canadian Intellectual Property Office. (2009, November 16). Retrieved November 30, 2009 from www.cipo.ic.gc.ca United States Patent and Trademark Office. (2009, November 23). Retrieved November 30, 2009 from http://www.uspto.gov/ World Intellectual Property Organization. (2009, December 1). Retrieved December 1, 2009 from http://www.wipo.int

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Intellectual Property Issues: Valuing Intellectual Property in Your Business

Most companies that are worthy of raising venture capital have proprietary Intellectual Property (IP). In fact, the quality of the IP and the management team are often the two most important aspects of a venture capitalist’s investment decision. The challenge that many ventures face, however, is that most investors will not sign non-disclosure agreements (NDAs), and NDAs are critical to maintaining the proprietary nature of the IP. This article details the appropriate strategy for addressing proprietary IP in your business plan template in order to attract investor attention while retaining the confidentiality of your inventions. Focus on the Benefits of and Applications of the IP: The business plan should not discuss the confidential aspects of the IP. Rather, the plan should discuss the benefits of the IP. Remember that even the most amazing of technologies will not excite investors unless it has tangible benefits to customers.

The business plan first needs to discuss the products and services into which the IP will be integrated. It then must detail the benefits that these products and services have to customers and differentiate them from competitive products. When applicable, it is helpful to include non-confidential drawings and backup materials of the products and services in the Appendix. Focus on Customer Needs and the Relevant Market Size: The business plan must also discuss how the benefits of the IP fulfill a large customer need. To accomplish this, the plan needs to detail customer wants and needs and prove that the company’s offerings specifically meet these needs.

Secondly, the plan needs to discuss the marketplace in which the IP is offered and the size of this marketplace. Critical to this analysis is determining the relevant market size. The relevant market size equals a company’s sales if it were to capture 100% of its specific niche of the market. For example, a medical device’s market size would not be the trillion dollar healthcare market, but rather the sales of all competing medical devices. Focus on Competition and Competitive Differentiation: Your business plan must also prove that your IP is better than competitive inventions. In identifying competitors, note that listing no or few competitors have a negative connotation. It implies that there may not be a large enough customer need to support the company’s products and/or services. On the other hand, should there be too many competitors, then the market may be too saturated to support the profitability of a new entrant. The answer — any company that also serves the customer needs that you serve should be considered a competitor.

The business plan should detail both the positive and negative aspects of competitors’ IP and products/services and validate that your offerings are either superior in general, or are superior in serving a specific customer niche.

Prove that you can Execute on the Opportunity: As importantly as proving the quality of the IP and that a vast market exists for its applications, the business plan most prove that the company can successfully execute on the opportunity.

The plan should detail the company’s past accomplishments, including descriptions and dates when prior funding rounds were received, products and services were launched, revenue milestones were reached, key partnerships were executed, etc.

When a company is a complete start-up, and no milestones have been accomplished, the plan should focus on past accomplishments of the management team as an indicator of the company’s ability to execute successfully.

Getting Investors to Sign the NDA: If you are able to convince the prospective investor that the IP is integrated into a product/service which yields real customer benefits in a large market, then the investor will take the quality of the invention for granted when reviewing the plan. Later, during the due diligence process, the investor will review the actual technology. At this point, a discussion regarding signing an NDA would be appropriate.

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Intellectual property: What it is, how to protect it

Safeguard your company’s ideas, trade secrets, and branding.

As a business owner, you manage many assets on a daily basis, but you may be overlooking an important one: intellectual property.

Your intellectual property includes the intangible assets you create for your business, such as names, designs, and automated processes. And just like tangible possessions — such as supplies, equipment, buildings, and inventory — your intellectual property contributes to the value and success of your business. So it needs to be monitored and protected.

Here’s a breakdown of common types of intellectual property and tips on how you can protect these assets.

Trademarks are the words, phrases, and symbols that differentiate your brand from others in your industry. In order to qualify as trademarks, they must be distinctive and used in commerce to sell or promote a product or service.

• Company and product names
• Slogans and taglines
• Logos and symbols
• Brand colors

How you can protect them : Trademarks may be registered with the federal government or your state government. Federally registered trademarks protect your rights throughout the U.S., while state-registered trademarks protect your rights only within the state’s territory.

While you’re not required to register a trademark, having a registered trademark can make it easier to challenge anyone who infringes on your trademark rights.

The United States Patent and Trademark Office (USPTO) provides information on how to register your trademarks at the state or national level.

Federal trademarks last as long as you use them with the public to promote your goods or services. Trademark applications generally cost between $250 and $350 per class of goods or services. To see if your desired trademark is available, you can begin with a general internet search or by checking the USPTO website . A trademark lawyer can help you do a more detailed search to determine the availability of your desired trademark.

A copyright grants you legal rights to anything you create that expresses or embodies an idea. It gives you exclusive rights to copy, distribute, reproduce, display, and license the work.

• Architectural designs
• Graphic arts
• Video and sound recordings
• Books and blog articles

How you can protect them : Like trademarks, you have some rights to your original work even if you don’t register the copyright at the U.S. Copyright Office . However, registering can give you more leverage if a case ever goes to court. For instance, if an employee writes an article or takes a photo within the scope of their employment, the employer is the copyright owner automatically. However, an independent contractor who writes an article or takes a photo will be the copyright owner of that asset unless they transfer the copyright through a written contract. As with trademarks, registering them officially can give you more leverage in the event of a dispute.

A copyright empowers you to profit from your creative assets. You can sell your copyrighted assets and lease them in exchange for license fees and royalties.

A new copyright owned by an individual typically lasts 70 years after the death of the copyright owner. A copyright owned by a limited liability company (LLC) or other legal entity will last 95 years from the first date the work was used with the public. You can file to register a copyright with the United States Copyright Office . The current online application fee for basic registrations is $45 to $65.

Patents are granted for new, useful inventions, and they will give you the right to prevent others from making, using, or selling your invention.

• Utility patents : for tangible inventions, such as products, machines, devices, and composite materials, as well as new and useful processes
• Design patents : the ornamental designs on manufactured products
• Plant patents : new varieties of plants

How you can protect them : Patent applications can be filed in the United States with the USPTO , and internationally in the patent office of the applicable country or region. U.S. utility and plant patents have a term of 20 years, while design patents have a term of 15 years. Patents require a nonrefundable filing fee, along with issue, service, and maintenance fees. This can add up to thousands of dollars, but some small businesses qualify for discounts.

Before submitting your patent application, you can (but are not required to) search existing patents and published patent applications to see if your concept has comparatively novel features. A patent lawyer can help you do a more thorough search to determine the availability of patent protection for your concept. They can also help you investigate whether any third parties have patents that could prevent you from bringing your product or service to market.

Trade secrets

A trade secret is a piece of confidential business information whose secrecy gives you an advantage over your competitors.

• Methods, techniques, and processes

How you can protect them : Though trade secrets cannot be registered, they can be protected in other ways. For instance, to keep valuable trade secrets safe, businesses use a variety of methods, including internal policies that restrict access to the trade secret, employment agreements, and non-disclosure agreements. You can take legal action against those who misappropriate your trade secrets.

Get started: Put protections in your business plan

Intellectual property rights can help you establish your brand identity, profit off your unique assets, and prevent others from using your creations. Making them part of your business plan can help ensure nothing’s missed.

Start by listing all your intellectual property assets, then consider which assets need to be protected. Budget for the time and money you’ll need to properly secure the rights to your creations, and outline how you plan to protect your intellectual assets. Finally, set deadlines for research, filing, and finalizing these steps and work toward them as you would any other business goal.

As you build and protect your company’s value, Wells Fargo is here to assist. Explore our helpful products and services , and make an appointment today.

Sources: U.S. Patent and Trademark Office , U.S. Copyright Office Fees , U.S. Copyright Office FAQ

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Intellectual Property Explained

5 min. read

Updated January 5, 2024

Do you have intellectual property? A creative work or invention that could be legally protected and provide a competitive advantage for your business?

It’s worth taking the time to find out if you’re unsure. 

The worst thing you can do is not know if you have IP, fail to protect it, and lose it. 

Let’s explore the basics of intellectual property and how you can protect it.

*Disclaimer: This content is intended to be general information and does not constitute legal advice. Please consult an attorney before making any intellectual property or other legal decisions.

• What is intellectual property?

A thought or notion floating around your head may be a great idea for a future product or service, but it isn’t yet intellectual property.

In the simplest terms, intellectual property (IP) pertains to things you create with your mind; not the ideas themselves, but the expression of the ideas. Names, designs, logos, automated processes, software, books, articles, music, etc., are all potential IPs. 

For a business, IP is an asset. It provides tangible value like equipment, inventory, or other physical possessions. And like your physical assets, IP should be monitored and protected differently.

There are four primary ways to protect your IP:  

• Trademarks (including design rights)
• Trade secrets

Intellectual property mistakes to avoid

Avoid common missteps such as thinking you don’t have IP, falsifying dates, or believing that registering IP isn’t a big deal.

How to protect IP when outsourcing software development

You may need to work with outside vendors or partners to get your business up and running. But how do you protect your intellectual property if it circulates outside your business?

• What is a trademark?

A trademark is the words, numbers, symbols, or unique packaging that distinguishes your brand.

Once registered, you can use the registered ® logo to notify the public that you own the symbol or name.

In the United States, you can also mark a trademark with a TM symbol, which means you claim an unregistered trademark. 

If another company uses your trademark, you can sue for trademark infringement or take legal cease-and-desist action against them. If the trademark is not registered, the lawsuit will be more difficult.

Why trademarking is important

Learn the importance of conducting a trademark search, why different trademarks matter, and what it means if denied.

How to register for a trademark

Learn how to apply for a trademark on your own or with the assistance of an attorney.

Domain names and trademark law

You’ll want to review outstanding trademarks before selecting a domain name. Otherwise, you may unintentionally run into legal conflicts.

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• What is a patent?

Patents protect new inventions and cover how things work, what they do, how they do it, what they are made of, and how they are made. 

Patent protection is an act of the federal government and has to do with interstate commerce. Once a patent is approved, it provides you with exclusive rights to produce a product or use a process for up to 20 years.

If someone profits from claims to an invention you have duly registered with the U.S. patent office—your patent protection allows you to sue. 

Should you patent your idea?

Learn what qualities make an idea patentable and how to know if it’s the right time to file.

What to know before filing a patent

Become familiar with the patent application process before you file for a patent on your own.

How to profit from your patent

How do you make money from a patent? Starting a business is the obvious choice, but there are actually several other ways to use your patent for a payday.

Large corporation patent strategies to use

By paying attention to the market, exploring broader protection, and investing in internal legal roles—you can find the same success using patents as a large and established corporation.

How to file patents in multiple countries

If you’re selling internationally, you likely need additional patents to protect your business outside of the U.S. Learn the basics of filing for and landing patents in several countries.

• What is copyright?

Copyright protects original works of authorship like books, songs, movies, art, photographs, etc. 

Copyright protects the actual expression of ideas, not the idea itself. The copyright terms can vary but generally last at least 50 years after the author’s death.

According to the U.S. Copyright Office, a visual copyright notice should contain three elements:

• The symbol  ©, the word “Copyright,” or the abbreviation “Copr.”
• The year of first publication
• The name of the copyright owner
• What are trade secrets?

Trade secrets Protect confidential and proprietary information like customer lists, manufacturing processes, secret ingredients, etc. Trade secret protection lasts as long as steps are taken to maintain secrecy.

How to protect trade secrets

Physical security is essential if you have material qualifying as a trade secret or a prototype you are considering patenting.

Keep any sensitive documents like recipes or customer lists locked away in a safe or other secure storage option, not lying around on a desk for any enterprising thief to find. For any prototypes you may have, ensure that anything you don’t want stolen isn’t left in plain sight.

Additional legal steps to protect your business

Intellectual property can provide you with a competitive advantage when starting a business. So, don’t miss out on protecting your work, brand, or innovations by not knowing how to identify and register IP. 

Contact an attorney for professional guidance if you’re unsure about any part of the registration process. 

Want to learn more about how to legally protect your business? Check out these resources:

• Small business insurance guide
• How and where to obtain licenses and permits
• Understand your tax obligations

See why 1.2 million entrepreneurs have written their business plans with LivePlan

Kody Wirth is a content writer and SEO specialist for Palo Alto Software—the creator's of Bplans and LivePlan. He has 3+ years experience covering small business topics and runs a part-time content writing service in his spare time.

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What Is Intellectual Property?

Understanding intellectual property, special considerations, intellectual property infringement, avoiding intellectual property infringement.

• Intellectual Property FAQS

The Bottom Line

• Corporate Finance

What Is Intellectual Property, and What Are Some Types?

Investopedia / Daniel Fishel

Intellectual property is a broad categorical description for the set of intangible assets owned and legally protected by a company or individual from outside use or implementation without consent. An intangible asset is a non-physical asset that a company or person owns.

The concept of intellectual property relates to the fact that certain products of human intellect should be afforded the same protective rights that apply to physical property, which are called tangible assets . Most developed economies have legal measures in place to protect both forms of property.

Key Takeaways

• Intellectual property is an umbrella term for a set of intangible assets or assets that are not physical in nature.
• Intellectual property is owned and legally protected by a person or company from outside use or implementation without consent.
• It can consist of many types of assets, including trademarks, patents, and copyrights.
• Intellectual property infringement occurs when a third party engages in the unauthorized use of the asset.
• Legal protections for most intellectual property expire after some time but last forever for others.

Intellectual property is a category of assets that are intangible. This means that they cannot be held and don't necessarily have a physical presence. These assets are created using human intellect. Intellectual property can take many forms and includes things like artwork, symbols, logos, brand names, and designs, among others.

Companies are diligent when it comes to identifying and protecting intellectual property because it holds such high value in today's increasingly knowledge-based economy. Also, producing value intellectual property requires heavy investments in brainpower and time of skilled labor . This translates into heavy investments by organizations and individuals that should not be accessed with no rights by others.

Extracting value from intellectual property and preventing others from deriving value from it is an important responsibility of any company. Although it's an intangible asset, intellectual property can be far more valuable than a company's physical assets. It can represent a competitive advantage and, as a result, is fiercely guarded and protected by the companies that own the property.

Many forms of intellectual property cannot be listed on the balance sheet as assets since there aren't specific accounting principles to value each asset. However, the value of the property tends to be reflected in the price of the stock since market participants are aware of the existence of the intellectual property.

Some intangible assets, such as patents, are recorded as property because they have an expiration date. These assets are recognized by a numerical value through the process of amortization. Amortization is an accounting method that decreases the value of an intangible asset over a set period of time. This process helps the company to reduce its income by expensing a set amount each year for tax purposes as the useful life of the intangible asset winds down.

For example, a patent might only have 20 years before it's registered as public domain. A company would assign a total value to the patent. Each year for 20 years, the patent would be expensed or amortized by the same amount by dividing the total value by 20 years. Each year the amortized asset amount would reduce the company's net income or profit for tax purposes. However, intellectual property that is considered to have a perpetual life, such as a trademark, is not amortized since it doesn't expire.

Global patent filings increased in 2021 from the previous year by 3.6% to 3.4 million. Trademark registration jumped 5.5% during that same period to 18.1 million new filings.

Types of Intellectual Property

Intellectual property can consist of many types of intangibles, and some of the most common are listed below.

A patent is a property right for an investor that's typically granted by a government agency, such as the U.S. Patent and Trademark Office. The patent allows the inventor exclusive rights to the invention, which could be a design, process, improvement, or physical invention such as a machine.

Technology and software companies often have patents for their designs. For example, the patent for the personal computer was filed in 1980 by Steve Jobs and three other colleagues at Apple ( AAPL ).

Copyrights provide authors and creators of original material the exclusive right to use, copy, or duplicate their material. Authors of books have their works copyrighted as do musical artists. A copyright also states that the original creators can grant  anyone authorization through a licensing agreement to use the work.

A trademark is a symbol, phrase, or insignia that is recognizable and represents a product that legally separates it from other products. A trademark is exclusively assigned to a company, meaning the company owns the trademark so that no others may use or copy it.

A trademark is often associated with a company's brand. For example, the logo and brand name of Coca-Cola is owned by the Coca-Cola Company ( KO ).

A franchise is a license that a company, individual, or party–called the franchisee–purchases allowing them to use a company's–the franchisor–name, trademark, proprietary knowledge, and processes.

The franchisee is typically a small business owner or entrepreneur who operates the store or franchise. The license allows the franchisee to sell a product or provide a service under the company's name. In return, the franchisor is paid a start-up fee and ongoing  licensing fees by the franchisee. Examples of companies that use the franchise business model include United Parcel Service ( UPS ) and McDonald's ( MCD ).

Trade Secrets

A trade secret is a company's process or practice that is not public information, which provides an economic benefit or advantage to the company or holder of the trade secret. Trade secrets must be actively protected by the company and are typically the result of a company's research and development (R&D) , which is why some employers require the signing of non-disclosure agreements (NDAs) .

Examples of trade secrets could be a design, pattern, recipe, formula, or proprietary process. Trade secrets are used to create a business model that differentiates the company's offerings to its customers by providing a competitive advantage.

Digital Assets

Digital assets are also increasingly recognized as IP. These would include proprietary software code or algorithms, and online digital content.

Attached to intellectual property are certain rights, known as intellectual property rights. These are rights that cannot be infringed upon by those without authorization to use them. IPRs give owners the ability to bar others from recreating, mimicking, and exploiting their work.

• Patent infringement occurs when a legally protected patent is used by another person or company without permission. Patents filed before June 8, 1995, were valid for 17 years, whereas patents filed after this date are valid for 20 years. After the expiration date, the details of the patent are made public.
• Copyright violations occur when an unauthorized party recreates all or a portion of an original work, such as a work of art, music, or a novel. The duplicated content need not be an exact replica of the original to qualify as an infringement.
• Trademark infringement occurs when an unauthorized party uses a licensed trademark or a mark resembling the licensed trademark. For example, a competitor might use a mark similar to its rival's to disrupt business and attract their customer base. Also, businesses in unrelated industries may use identical or similar marks in an effort to capitalize on other companies' strong brand images.

Trade secrets are often protected by NDAs. When a party to the agreement discloses all or parts of a trade secret to uninterested parties, they have violated the agreement and infringed upon the trade secret. It is possible to be guilty of trade secret infringement when an NDA is not present.

Penalties for intellectual property infringement range from fines to prison sentences.

Infringement is often done unwittingly. To avoid being sued for infringement on intellectual property, make sure that your business is not using copyrighted or trademarked material, and be sure your brand or logo is not too similar to that of others that it could reasonably mislead somebody to think it was the other brand.

It's also a good idea to do a patent search to ensure that any ideas are your own. If not, you may be able to find ways to license them through the proper channels. There are IP lawyers who specialize in this process to make sure that you are not using anybody else's protected intellectual assets.

If you hire somebody to do creative work for you or your company, make sure the contract explicitly states that any creative work that is generated becomes the property of the company and not the person you hired.

Example of Intellectual Property

There was a widely publicized intellectual property case in 2017 in which a company called Waymo sued Uber over alleged stealing and implementation of technology relating to Waymo's self-driving car program.

The plans for the technology, although not yet completely viable, constituted significant intellectual property for Waymo. When they alleged that Uber had obtained their intellectual property, they were able to take action through the court system to attempt to keep Uber from utilizing the information to enhance their own self-driving car program.

What Are the 4 Main Types of Intellectual Property?

The four main types of intellectual property are patents, trademarks, copyrights, and trade secrets.

Who Owns Intellectual Property?

The creator of a work is generally deemed to be its owner. However, intellectual property ownership can be determined differently for different types of property and under varying circumstances. For example, if work is created for an employer, the employer is the owner of that intellectual property. Also, ownership rights can also be transferred to other parties.

What Is the Purpose of Intellectual Property?

Intellectual property can be used for various reasons, such as branding and marketing, as well as to protect assets that give a competitive advantage.

Assets come in many shapes and sizes. But some don't have a physical presence. Often called intangible assets, intellectual property holds just as much value for corporations as tangible ones. Logos and brand names, which can be patented and trademarked, help consumers recognize popular companies and their products. That's why it's important for companies to take the necessary steps to protect these assets so they aren't misused or infringed upon by others.

WIPO. " IP Facts and Figures ."

United States Patent and Trademark Office. " Patent Basics ."

Google Patents. " USDD268584 United States "

Copyright.gov. " What Is Copyright? "

United States Patent and Trademark Office. " What Is a Trademark? "

International Trade Administration. " How Long Does Patent, Trademark or Copyright Protection Last? "

Dennemeyer. " What Is Intellectual Property 'Theft' and How to Avoid It? "

LegalMatch. " Patent Duration ."

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Intellectual Property Business Plan Template

Document description.

This intellectual property business plan template has 15 pages and is a MS Word file type listed under our business plan kit documents.

Sample of our intellectual property business plan template:

[YOUR COMPANY NAME] 2010 Business Plan 1 | P a g e INSERT IMAGE/LOGO [YOUR COMPANY NAME] [YOUR NAME] [YOUR ADDRESS] [YOUR PHONE NUMBER] [[email protected]] Business Plan

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Intellectual Property Office Corporate Plan 2024 to 2025

The plan outlines our key activities in the first year of delivering our strategy and working towards our mission.

Creativity and innovation fuel investment and growth in the UK economy. The role of intellectual property remains crucial to increasing this investment and economic growth. It encourages and incentivises the UK to innovate and gives individuals, businesses, and organisations the confidence to create new ideas, products, and technologies, knowing their IP can be protected.

The IPO ’s new strategy, IPO 2027: IP for a creative and innovative UK, sets out the framework for how it will deliver its mission to help grow the UK economy.

This corporate plan sets out what we plan to deliver and focus on in the first year of this strategy. Our areas of focus for 2024/25 are to:

• launch our One  IPO  patents service for all customers
• unlock the value of our patents data through our new online  IP  search tool
• start to build our One  IPO  services for trade marks, designs and tribunal customers
• start our journey towards our future culture as individuals, teams, and an organisation
• create a strategic workforce plan for the organisation

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International Intellectual Property Law: Cases and Materials

This casebook organizes contemporary foreign, as well as U.S., case law and literature to equip law students with the knowledge they need to practice intellectual property law in both transactional and litigation settings in the current globalized environment. Carefully selected materials also expose students to the social, economic, and cultural considerations that underpin intellectual property law around the world. The casebook covers aspects of public international law, conflict of laws (private international law), and comparative law of intellectual property. Each area of law―copyright, patent, trademark, unfair competition, trade secrets, and industrial design―is introduced by a comprehensive authors’ note placing the field in its international and comparative law context, and extensive notes on the cases and materials fill in relevant details, including current and historically important topics. Materials on the major fields of intellectual property law are accompanied by materials on other related intellectual property matters, such as the protection of databases, plant varieties, geographical indications of origin, and internet domain names. A comprehensive teacher’s manual offers step-by-step assistance for teaching every case and doctrine, and also sample syllabi, final exams, learning outcomes and means of assessment.

Buy International Intellectual Property Law: Cases and Materials

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How to Write a Property Management Business Plan (Free Template)

If you’re looking to start a property management business, you’ve come to the right place. The success of property management companies—or any companies, for that matter—absolutely depends on first creating a well-researched and thorough business plan .

Luckily, this guide aims to help you do just that. First, we’ll explain what a property management business plan encompasses, why you need one, and tips for going about it the right way. Then, we’ll walk you through the recommended business plan outline step-by-step and share details of what to include in each section.

Finally, we’ll send you off with a free template you can download and update with your business’s own information. Creating a business plan was never so easy!

Let’s dive in.

Don’t see the form to download our free property management business plan template? Click here .

What is a property management business plan?

A property management business plan is a document that summarizes your property management business: its current operations, goals for the future, strategies for achieving those goals, and other supporting details.

While you’ll want to create your business plan before launching your businesses, it’s not a one-and-done document. Instead, you should update it yearly and after major company and industry changes.

Why do you need a property management company business plan?

Whether you’re looking to start a new property management company or grow your existing one, you’re probably eager to get started. But while it can feel productive to hit the ground running, a business plan is crucial to drive your strategy and decision-making . It will serve as a roadmap you can refer back to as you get started and grow your business.

Moreover, business plans are also crucial as tools to help sell your property management agency to potential partners, investors, and banks . There’s no point in asking for their support if you can’t show you know what you’re doing, and business plans are one of the best ways to do that.

Finally, beyond mere financial gains, a thorough property management business plan enables you to measure your success accurately and pinpoint areas for improvement . It empowers you to zero in on critical indicators like your budget, local market insights, and expansion opportunities.

How do you write a property management business plan?

Do your research first.

It’s easy to spot the differences between a well-researched business plan and one that was written haphazardly. And those differences will be just as easy to mark in the results your business sees once it’s up and running.

Tailor it to your type of property management business

Chances are, you’re going to start your business plan from a standard template. There’s nothing wrong with that. In fact, it’s recommended, and we provide a free property management business plan template at the end of this article, if you’re still looking for one.

However, as you fill in your information, be sure to tailor your plan to your specific business. For example, what type of properties does your business manage? Common types of property management include:

• Residential rental property management , including both single-family and multifamily residences
• HOA property management , which typically involves working directly with homeowners’ associations
• Commercial property management , including office, retail, and industrial buildings
• Vacation rental property management , involving managing vacation rentals such as Airbnbs for their owners

Remember your goals

You might wonder whether you really need to include this much detail in your business plan, but remember what you’re hoping to achieve. And we don’t just mean a successful property management agency, but the specific things you’ll use your business plan for.

For example, if you’re hoping to find a partner for your business, your prospects will certainly appreciate a high level of detail in your operations plan. Similarly, potential investors will want to see solid financials.

Use a property management business plan template

Finally, don’t make it harder for yourself than you have to! You’re already going to have to do a significant amount of research, calculations, and brainstorming. Make it easier for yourself by starting with a template you can input specifics to, like the one pictured below:

Don’t have a template already? Scroll to the bottom of the article to download ours!

What is the outline of a property management plan?

Business plans, whether for property management or other industries, tend to follow this standard format:

Executive summary

Company overview, market analysis, marketing plan, operations plan, management team, financial plan, growth opportunities.

Keep reading for more information on what to include in each section. Or scroll to the bottom of the page to download our business plan template for property management and get started.

What to include in a business plan for property management

Your business plan should begin with an executive summary. This section serves as an introduction to both your business plan and your business , and should include information such as:

• The type of property management you plan to do
• How far along your business is
• Your target market
• Your strategy for achieving these goals

Depending on how thorough you want to be, you could even include a brief overview of every section of your business plan. Your goal should be to give a snapshot of your business that compels your readers—whether they be potential partners, investors, or banks—to finish reading your plan.

Pro tip: Because your executive summary needs to sum up your overall business plan, it’s often easiest to write it last. That way, you’ll have all the details ironed out and won’t forget to include anything.

In this section, you’ll give an overview and analysis of your property management company itself.

To start, explain how your company got started and which of the property management niches we explained above you fit into. You’ll also want to share your legal business structure (for example, sole proprietorship, LLC, C corporation, or S corporation).

The majority of this section, however, should be devoted to your competitive differentiators. What core competencies are you bringing to the market?

A market analysis isn’t only an important addition to your business plan. It’s also absolutely essential that you understand your market inside and out before you even consider launching a property management agency.

To be as thorough as possible, make sure that your market analysis includes specific analyses of your industry, target customers, and competitors.

Industry analysis

Provide an overview of your specific niche of the property management industry. Include as much detail as you can to help you become an expert in your industry, such as:

• Market size (in dollars)
• History of the industry
• Prospected growth

Customer analysis

Who are your target customers? Start with your property management niche, and then get even more specific:

• Residential rental property management → Will you target single-family or multifamily residences? Apartment buildings or individual homes? Affordable housing or high-end residences?
• HOA property management → Do you have specific HOAs in mind?
• Commercial property management → Will you manage office, retail, or industrial buildings?
• Vacation rental property management → Do you want to work with a specific type of vacation rental property or owner?

Be sure to include your target customers’ specific needs, goals, and any other information you can find to build a robust profile. The more detailed you can be, the easier it will be to target them with your services!

Competitive analysis

This is where you analyze your competitors, both direct and indirect:

• Your direct competitors include other property management companies in the same niche as you. These companies will likely be located nearby as well.
• Your indirect competitors include other options your customers have outside of property management agencies. This might include property owners who decide to manage their properties themselves, in-house managers, and even automated tools that claim to take the place of property managers.

After identifying the competition, you’ll want to provide additional information about your direct competitors. Who are their target customers? What services do they offer, and how much do they charge?

Gather as much information as you can, and then perform a SWOT (strengths, weakness, opportunities, and threats) analysis to identify potential competitive advantages. Your goal is to determine how you’ll outperform your competitors—whether via superior or additional services, lower prices, greater efficiency, or something else.

Remember: If you can’t identify any clear competitive advantages, your customers won’t be able to, either.

So, you have superior property management services at competitive rates. But how do you plan on getting in front of your target customers?

This is where your marketing plan comes in. Think about what marketing channels you’ll use, prioritizing those which will best reach your target customers. Consider both online and offline marketing, including the following options:

• Business cards
• Advertising in local newspapers and relevant magazines
• SEO marketing
• Email marketing
• Social media marketing
• Paid advertising

Creating your business plan has forced you to set some specific goals. How do you plan on meeting them?

This is exactly what your operations plan sets out to cover, with details on both short- and long-term processes.

Your short-term processes will include everything involved in the day-to-day running of your property management business . Again, these tasks will vary drastically depending on your property management niche. However, the following questions are a good starting point:

• Who will be in charge of running the business?
• Do you need to hire any additional staff? If so, how many people and for which roles?
• How will you structure your team?
• What are your service standards?
• Which manuals will you need to develop?
• What property management software will you use?

Once you’ve defined your daily operations, take a step back and think long-term. At any point in your business’s trajectory, do you plan to:

• Hire additional employees?
• Reach a certain sales figure?
• Grow your portfolio?
• Expand to a new location?

Having these long-term goals documented will not only show potential partners and investors that you’re thinking about the future. It will also give you something to refer back to in order to measure your progress.

Your property management business will only be as strong as the team leading it. So, once you’ve assembled the dream team, you’ll want to highlight its strengths in your business plan, paying specific attention to each member’s background, skills, and relevant experience.

If no one on your management team has property management or real estate experience, or your team is lacking in any way, it might be worthwhile to put together an advisory board. This board consists of a handful of mentors who have the experience necessary to guide your business in the right direction (and reassure any potential investors).

And now for everyone’s favorite part: the financial plan.

Specifically, your financial plan should consist of a five-year financial statement. The first year of your financial statement should include monthly and quarterly projections, with the remaining years including annual figures.

What goes in a financial statement? Let’s break it down:

• Profit and loss statement: Also referred to as an income statement, a profit and loss statement subtracts your costs from your revenue to find your profit. As you can imagine, you’re going to be making a lot of calculated assumptions at this point. Try to be as accurate as possible when predicting your costs and revenue. Otherwise, your profit and loss statement won’t paint a very accurate picture.
• Balance sheet: A balance sheet details your business’s assets (what you own) and liabilities (what you owe) in order to provide a snapshot of its finances. Your assets might include office space or software solutions, whereas liabilities would include any loans you’ve taken out to start your business.
• Cash flow statement: A cash flow statement shows how changes in your income and balance sheet affect your cash flow—and your ability to operate in the short- and long-term. Its goal is to show how much money you need to run your business so that you don’t run out of cash.

If you’re just getting started, it may feel too soon to consider growth opportunities. But thinking about your business’s long-term goals and plans is essential to set yourself up for success. After all, you don’t only want to succeed now. You want to make sure you have what’s necessary to succeed for years to come.

On that note, analyze the property management and real estate market in your area to identify growth opportunities for your business over the next five to 10 years, such as:

• Upgrades to your tech stack
• Strategic partnerships
• Expansion plans
• Opportunities to take advantage of new market trends

If you have any supporting documentation that could strengthen your business plan, such as buyer personas for your target customers or more complete financial projections, feel free to attach them in the appendix. That way, the additional information is there for anyone who wants to see it, but it doesn’t clutter up your business plan.

Property management business plan example

Curious about what a business plan for property management looks like? We’re including a property management business plan sample (the company overview, specifically) below to give you an idea:

Want a customizable version? Scroll to the bottom of the article to download our free template!

Download our free property management business plan template

Ready to get started? We’re here to help!

Download our free template below and simply fill in your own information. Our straightforward guide includes all the details you need to cover before starting your new business.

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Business | Selling an asset? Don’t forget to plan before…

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Business | Selling an asset? Don’t forget to plan before you sign

What if you found out, after the sale, that instead of only a small amount or no taxes being owed, your tax bill was close to 50% of the profit? Because you did not consider tax planning before selling the asset, the proceeds you planned to spend on a new car, kitchen remodel, or vacation must now be paid immediately to the government instead.

Here are some cautionary examples of when assets were sold without planning for taxes and how to avoid these mistakes.

Outdated or incorrect advice

As a simple example, you have heard how capital gains tax rates are lower than ordinary tax rates, which is true. Long-term federal capital gains are taxed at 0-20%. However, to qualify for those lower rates, you must hold the asset for over a year. Otherwise, the sale is taxed as a short-term capital gain at 10-37% ordinary tax rates. Add in state taxes, and your tax rate can approach 50% if you did not hold the asset for more than a year.

Many other holding periods and restrictions can be found throughout the IRS Code. For example, if you want to take advantage of the exclusion available when you sell your residence, according to the IRS, you must have owned the home and used it as your residence for at least 24 months of the previous 5 years unless certain exceptions are met.

Since your primary residence is generally the largest asset you will sell in your lifetime, here is another common tax planning mistake. Even though it has not been true for some time, many still believe you will pay no tax if you trade up to a more expensive home. Also, the excluded amount on home sales is only $250,000. It is only $500,000 if your filing status is married filing jointly.

The cost of not qualifying for the $500,000 exclusion could result in an additional $100k in federal taxes.

Not documenting losses and costs

A married couple, both medical doctors, neglected to report their many rental property activities on their tax returns because their preparer said their high income prohibited them from writing off the passive losses they incurred. Therefore, they assumed there was no reason to include the income and expenses on their returns.

When they disposed of the properties, those passive losses they did not report could have been written off against the sale proceeds. Not keeping track of and reporting those accumulated losses resulted in the couple paying several hundreds of thousands of dollars in taxes they should not have owed.

Another mistake is that some do not report capital losses, generally on stock sales, because they believe the losses are limited to $3,000. While it is true that the losses are limited, any losses in excess of $3,000 can be carried forward on your individual return to offset future gains.

The same is true for charitable contributions and some forms of accelerated depreciation. You can carry those excess deductions forward to future years.

If someone says, “Don’t bother” to keep track of losses or expenses, seek another opinion. For instance, those capital improvement expenditures for your home can be used when you sell. In many cases, the documented improvements over the years, like roofs, patios, and pools,  can eliminate the gains on the sales of homes. Keep those receipts and use them later!

The danger of corporations

While the use of entities like LLCs and corporations can often offer asset protection, tax, and estate planning benefits, there are many tax ramifications when you eventually sell assets that are no longer owned by you personally.

For example, we often advise clients not to hold appreciable assets in their closely held corporations. Why? When you sell an asset held by a corporation but want to use the sale proceeds personally, the taxes will often be much higher than if the asset was held in your name or an LLC. Since the asset belongs to a corporation and not you,  you must somehow transfer that asset or the profit from the asset’s sale from the corporation to you as a shareholder.

One client put all her properties in several C-Corporations just before death and left it for her kids to figure out what to do. They would have paid no taxes had she not put the real estate in the corporation. The trustee also had to file unnecessary corporate returns and close the corporations.

Unfortunately, new business owners often elect to be an S-corporation without considering what will happen when they sell the business. (I also think clients assume that since the S stands for small and they are a small business, they figure they must be an S-Corporation. This is not the case.)

If, instead of electing to be an S-Corporation, they chose to operate as a C-corporation, with some other qualifying factors, they could pay little or no tax when the business sells five or more years in the future. One business owner could have saved $300k in federal and state taxes on selling $1 mil in stock. For more information, read about Sec. 1202 small business stock here- https://www.sba.gov/blog/qualified-small-business-stock-what-it-how-use-it.

Instead of using an online or do-it-yourself incorporation service, work with a qualified attorney and knowledgeable accountant and ask questions to avoid making costly planning mistakes.

A renowned tax attorney and educator of other attorneys with fifty years of experience offers profound insight: “Paying an income tax is a reflection that something good has happened, not something bad. As a result, the fact a tax related event has occurred is, almost always, a reason to celebrate.”

Just make sure to do some tax planning before the sale; then, the tax savings will be an additional reason to celebrate.

Michelle C. Herting is a CPA, an accredited business valuator, and an accredited estate planner. She specializes in succession planning, business valuations, and settling trusts.

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