Getting Started with Intellectual Property

Episode 245 Getting Started with Intellectual Property

Today I am continuing the series of Building a Wall of Legal Protection.  We are discussing Intellectual Property.   Intellectual property is your most valuable asset and understanding how to protect it is a necessary step in protecting what you are creating.

In this episode we will cover:

  • Why Intellectual Property is your most valuable asset.
  • Patents, trademarks, copyrights, and licensing.
  • Creating additional revenue streams in your business.

 

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The Legalpreneur Podcast is advertising/marketing material. It is not legal advice. Please consult with your attorney on these topics. Copyright Legalpreneur Inc 2022

 

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Episode 245: Getting Started with Intellectual Property Transcript

Andrea: [00:00:03] Welcome to the Legalpreneur Podcast. I’m your host, Andrea Sager, founder and CEO of Legalpreneur Inc. As a serial entrepreneur and someone that works exclusively with small business owners legally protecting their business, I’m dedicated to covering common legal issues faced by business owners, providing you with the business knowledge you need to catapult your business’s growth and showing you just how some of the world’s most elite entrepreneurs have handled these legal and business issues themselves. In true attorney fashion, the information in this episode is not legal advice. This is for informational purposes only, and you should always consult with your attorney before implementing any of the information in the show. Hello there. Welcome back to another episode of the Legalpreneur Podcast. We are continuing our series of building a wall of legal protection. This week, we’re going to be covering the overview of intellectual property. And last week we covered contracts. The week before that we did entities, and this week we’re going to start intellectual property. I think the best way to do this is to give a full overview of intellectual property and how it can. Protect your business and grow your business, and then we’ll break it down by trademarks and copyrights. Because you all know I’m not a patent attorney and I do not cover patents, so I will touch on patents very, very briefly in this episode. But I will not do an individual episode on patents because that is not my forte and. Really what we’re going to cover this week is. Using intellectual property to benefit you and your business. And then we’ll break down the ins and outs of trademarks next week and then the ins and outs of copyrights the week after. So let’s get into it now. Intellectual property. Whether you realize it or not, it is your business is most valuable asset. Very rarely is your physical products your most valuable asset. It’s normally intellectual property. And the way I like to illustrate this to people is think about Nike. Nike does not put their business at risk with physical goods. So if Nike had let’s just illustrate this. So if Nike had all of their products, this would never happen. But all their products in the world in one warehouse, and if something happened and that warehouse burned down one night and all of their physical merchandise was ruined.

Andrea: [00:02:40] Nike itself would not be ruined. Nike like, yes, they would have their physical property destroyed and they would have that merchandise destroyed and they would not be able to sell it. So you would think their whole business would be destroyed. You would think. But. Nike would still be $1,000,000,000 company if all of their merchandise that they had available. Was ruined. Because think about it. Nike still has their brand. Nike still has their intellectual property, their trademarks, their copyrights, their patents. All of those things are still in existence without having physical merchandise to sell. So even if they have no physical merchandise, if it all gets ruined, eventually they’re going to have more to sell and so they’ll be able to bring in revenue. But if. All was lost. They still have $1,000,000,000 business. But on the other hand, if they didn’t have their intellectual property, if they somehow lost their patents, their trademarks, their copyrights, then their business would essentially be ruined. Now they would be able to still sell their merchandise. However, the value of the company would be so much lower without their intellectual property. That. And I tell you all this because I want you to understand how valuable intellectual property makes a brand. It’s not the sales. Yes, the sales help, but. If you look at any business’s balance sheet. Most likely the highest asset is their intellectual property. It is an actual line item on the balance sheet and it is most likely the highest number on their.

Andrea: [00:04:41] What I would say is the intellectual property you have. You want it to be protected at all costs. And this is why because this is what builds the value of your brand. And if you ever actually look at your balance sheet and if you have if you have a business that has valuable intellectual property, most likely. It’s on there as goodwill. And that’s for accounting purposes. But a lot of times goodwill results from intellectual property and the value of your intellectual property. So how does this come into play? I’m going to break it down really quickly. Patents are inventions. There are new inventions that you create. And this is. Perhaps the biggest headache of intellectual property. It can be the highest value, but it’s also the biggest headache. So if you ever need a patent referral, if you’re questioning, Hey, do I have a patent in my eligible for a patent? Let me know. I can get you a referral. It’s just not going to be me that actually does it for you. Not my forte now, because for patents you actually have there’s a separate patent bar and you have to have a certain undergrad degree to even be eligible for a patent, to be a patent attorney. Not me, just not me at all. So my, my undergrad degree was business with an emphasis in accounting, definitely not any STEM degree, which is really what you have to do for a patent to be a patent attorney.

Andrea: [00:06:20] So trademarks, this is the identity of your brand. These are things that. Identify your brand in some way, shape or form. And I’m going to spout off a few things that can be protected with a trademark. But it’s not an exhaustive list. There are many, many things that can be protected with a trademark. If it is, I tell people if it’s a unique identifier for your business, it can probably be protected with a trademark. So trademarks can be your brand name, your logo, your slogan. A product name. A service name. Anything that has a unique name within your business, it can probably be protected with a trademark. Now we have copyrights as well, which are your creative work. Normally these are things that you’re consistently creating within your business. So for creative work, this can be your photos, your videos, your blog posts, website copy eBooks. Books. Their course content. Podcast Episodes. The easiest way to know the difference between trademarks and copyrights. One example I like to use is a podcast. The podcast name is a trademark. Podcast episodes are a copyright. So I like to tell people trademarks are typically one and done. So you do them once you come up with the name once and that’s it. And like a logo, you change your logo every once in every few years maybe. But for the most part it’s one and done or one and done every once in a while. But. So that is trademarks and then copyrights. It’s consistent, it is consistently being created.

Andrea: [00:08:06] So if you’re wondering like, okay, I have this thing within my business, is this something that I can create consistently? And it’s not always it’s not a hard and fast rule, but it’s just one way to think about it. So your brand name, typically you only come up with that once. But on the other hand, for copyrights, if you have an e-book, typically you’re not going to be creating an e-book every single day. Maybe in that e-book, you’re not necessarily going to be making changes every day. Maybe, but not necessarily so. It’s not really a hard and fast rule, but it’s one way to think about it. So intellectual property. This can legitimately. Create additional revenue streams within your business. And a lot of that is done through licensing. So it’s not necessarily sales like, absolutely, you’re going to have sales within your business and a lot of that is protected with your intellectual property. The fact that you can stop others from monetizing those products, those names. But there’s also another revenue stream, and that is through licensing royalties. So when you write a book, you get royalties from those book sales. I know I think I mentioned this on the podcast, but I had a client earlier this year that. Basically found somebody infringing on her name and it wasn’t the same exact name. It was a phonetic similarity. So it sounded the same, but it was spelled differently and. We basically got them shut down where they were selling and their attorney came to us and they’re like, Hey, can we coexist? And that essentially means can we both agree that we’re not infringing on each other? And I told my client, I said, you actually don’t have to agree to this.

Andrea: [00:09:54] And there they were. They were a much bigger company and they had a big law firm. But my client did what she needed to do from the beginning. She protected her business name with a trademark. And I told her, I said, you don’t have to agree to this. And you can also ask for a payment if. Which is a license fee if you want. If you do want to allow them to use it. And I told her I was like, You can ask for any number. Doesn’t mean they’re going to agree to it. She was like, No. She’s like, Actually, you know, I did what I need to do and I don’t want to share the name with anyone. It’s like, girlfriend, that is your right. So you do not have to do that at all. So I go back, tell the attorney thanks, but no thanks. Then they come back a few weeks later and wasn’t expecting to ever hear from them again. And their attorney came back and said, Hey, our client would like to pay your client $25,000 to use the name. And I was like, Oh, I wasn’t expecting that. So go to my client. And I was like, Hey, I know you said you don’t want to share the name, but they offered a payment of 25,000.

Andrea: [00:11:01] And I was like, You don’t have to accept it. You can also counteroffer or you can still tell them No. She’s like, Where do I sign? She was a small business, and even though she did things the right way, I mean, who doesn’t want a $25,000 check? So that’s just an example of what can happen when you do protect your business from the beginning. And I do not want anybody to interpret that as, hey, I’m going to go get a trademark and make $25,000 from somebody else using the name. Do not interpret that, but it’s just an example of what can happen like that’s happened multiple times when clients do get paid for a license. I have one client who license her brand. She does collaborations with other people that want to use her goodwill with her name brand, and they use that to make products. And the other business is the one selling the product. So my client doesn’t have to do anything. She’s just giving him the right to use the name and she gets royalties on every single purchase. So these are just things that happen. When you are proactive and legally protect your business. And a lot of times when you protect your intellectual property, you actually get those registrations when you go to sell the business. A lot of times investors or people, buyers, they will only purchase because you have the registrations. And I’ve seen so many deals lost because they did not actually protect their intellectual property. Like we know you have this intellectual property, but now there’s questions, now there’s issues because you did not actually protect it and get those registrations.

Andrea: [00:12:50] So this was just a high level overview of intellectual property and what it can do for your business. Next week we’re going to deep dive into trademarks. The week after that will deep dive into copyrights. And of course, if you need a patent referral, let me know. But I just want to leave you with this. If you are questioning if you have a business, if you’re questioning if you have an intellectual property. You most likely do. And if you want to be what I want to call a quote unquote real business owner, you have to take these necessary steps. You have to protect what you have. You maybe you are great at making money, but you’re not going to be able to keep what you earn if you’re not protecting it. That’s what all this is about is protecting what you are creating. All right. You all have a wonderful week and I’ll see you in a bit. I am so excited to share with you that from now until the end of the year, you can sign up for the Legalpreneur membership for almost half off. It is normally $349 a month or $3499 for the year, but from now until the end of 2022, you can sign up for $199 a month or $1999 for the year. You get all access to your own attorney. Unlimited emails, 130 minute phone call, a month, document review, access to.

Andrea: [00:14:09] All of our contract templates, plus a discount on additional services. And once you get started, we get you rocking and rolling with a business audit, which is where we outline exactly what protection you currently have and what protections you still need. We lay it all out for you. That way you can get.

Andrea: [00:14:25] Started working with your attorney, knowing exactly where your relationship is going. Get signed up. The link is in the show notes and we are so excited to serve you and the Legalpreneur membership.

Andrea: [00:14:41] Here at Legalpreneur. We’re committed to providing a supportive legal community for all business owners. I know how scary the legal stuff can be. If you found this information helpful, I would be so grateful if you could share it with the fellow business owner. And quite frankly, it doesn’t cost anything to rate, review or subscribe to the show. Your support helps me reach more listeners, which allows me to support more business owners in their entrepreneurial journey. Have any questions or comments about the show? Feel free to drop me a line on Instagram. I promise. I read all of the messages and comments, and if you want to be a guest on the show or know someone that would make a great guest, simply fill out our application form and a team member will reach out if we think it’s a good fit. I’ll see you in the next episode.

 

Episode 245 Getting Started with Intellectual Property

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