On January 6th David was honored to be a guest on the nationally syndicated The Small Business Advocate® radio show.
On January 6th David was honored to be a guest on the nationally syndicated The Small Business Advocate® radio show.
On January 6th David was honored to be a guest on the nationally syndicated The Small Business Advocate® radio show. Jim Blasingame and David discussed “Intellectual Property Mistakes to Avoid in 2020.” Use the players below to listen.
Quit Ignoring the Fine Print in Contracts, Eventually It Will Bite You
Assume all contracts are negotiable. I believe the single biggest IP mistake of small businesses has nothing to do with protect your inventions, or failing to register a trademark to protect your brand, it is… signing “boilerplate” contracts without even considering the associated risks.
Small businesses that blindly agree to the “Terms and Conditions” of their larger business vendors, customers, and partners are suckers. Additionally, small businesses that do so are NOT respected by the larger business vendors, customers, and partners.
While every company wants to be viewed as one that is “easy” to do business with, do it by exceeding expectations NOT by accepting risks that could sink your business. Small business owners must develop a radar for filtering our non-risky legal garble in contracts, while identifying high-risk language and obligations.
Non-IP Example: A cleaning service company signs an Agreement with a manufacturer of auto parts to clean the offices and plant every night. I suspect that the “standard agreement” would have the cleaning service company for any damage that may be done to the manufacturer’s equipment by an employee of the cleaning company, YET it would probably also say that the cleaning company could not sue them for any injuries incurred by a cleaning company employee while in the manufacturer’s facilities.
Scenario: Employee spills mop bucket and takes out the manufacturer’s server… cleaning company liable. While, if a part flies of a piece of equipment and breaks the leg of one of the 3 cleaning company employees… agreed not to sue and had accepted the risk.
Do you know your potential exposure? I have yet to meet someone that has done their research and says “yes, we know what is out there and feel confident that we aren’t stepping on other’s IP.” More commonly the response is “huh, what?”
Small businesses often have an inferiority complex… guess what; you would be at the contract signing stage if they didn’t want to work with you!
Quit Ignoring the Fact That Every Business has Intellectual Property & You Should Want to Know as Much as Possible About Your Competitor’s IP
This mistake is particularly prevalent with service businesses.
We have discussed this topic several times so I would just emphasize that intellectual property is not limited to great inventions. This may include something as simple as the most efficient delivery route b/t the major grocery stores in the south, a client list, or that one vendor that saves you 20%.
Monitoring your competitor’s IP is easy to do and you can learn so much – not just risks to avoid, but you can often get an early indication of new products and services coming down the pipe.
Quit Believing Someone Will Buy or Invest in Your Company if You Have Done Nothing to Protect Your IP
Not protecting your IP that is akin to leaving the front doors to your office unlocked. Why would someone invest in a company that is so careless?
Similarly, quit failing to recognize that your own employees can be your greatest risk. Ignoring patents and trademarks, can a key employee walk out your door with all your trade secrets on a thumb drive the day they are offered a 10% bump in salary from your bitter rival?
Having weak or non-existent partnership and employment agreements with your co-founders and employees. You must recognize at the outset that co-founders and key employees will come and go; and you must prepare so that it does not destroy your business. If someone is going to steal from your small business, it is most likely going to be one of your employees, and they are most likely going to be stealing intellectual property, not physical assets. Planning can dramatically decrease this risk.
Likewise, investors are careful not to invest in potential lawsuits. Investment deals fall apart every day because the company seeking an investor has not done the due diligence before the potential investor does.
Successful small businesses recognize that preventative intellectual property planning is an investment NOT an expense. Just like preventative maintenance on your fleet of vehicles or the roof of your building. Are you investing more in preventative fleet, or roof, maintenance than IP?