6. Failure to Protect Intellectual Property
Liability: As your company’s internet presence grows, so does its reliance on its “intellectual” property. Whether it is trademarks, customer lists, proprietary technology or patents, companies doing business on the internet depend on their intellectual property to maintain a competitive advantage in the marketplace. Unfortunately, many companies do not fully realize or protect the value associated with their intellectual property. Mismanagement can cause your company’s intellectual property to move into the public domain. Without intellectual property, your company’s competitive advantage, and even your entire business could disappear overnight.
Solution: Due diligence is the first step. Work with a patent attorney to determine what intellectual property your company has and collect the documentation regarding ownership. Many items, such as the design of a website, are owned by the developer. This may be true even if your company dictated the parameters of the website and fully paid the developer for the time involved in creating the site.
If your company discovers that some of its intellectual property has been improperly transferred, work with your lawyer to immediately execute and file the appropriate paperwork with the appropriate entities to attempt to secure rights which became lost, or which remained with the owner after the “transfer.” A well documented intellectual property portfolio allows easy analysis and access to intellectual property transfer documentation.
It is critical to incorporate intellectual property transfer procedures into your company’s standard policies. Most importantly, you should always have your lawyer draft and execute appropriate transfer documentation well in advance of any use of intellectual property received from outside your company. While drafting and executing proper intellectual property transfer documentation before the transfer is relatively painless and straightforward, trying to effectuate a legal transfer after the fact can be outrageously expensive and time consuming. That is the good news. Sometimes, the attempted transfer is so botched, or the intellectual property so mismanaged that it moves in to the public domain and no amount of time or money can ever put the genie back in the bottle again.