On September 9^th David was honored to be a guest on the nationally syndicated The Small Business Advocate® radio show. Jim Blasingame and David discussed “Entertaining Intellectual Property Blunders & Lessons to Avoid IP Mistakes.” Use the players below to listen.

A few of the intellectual property goals that we discuss include:

In the first segment we discussed the importance of understanding what you own or are attempting to acquire. In the past Jim and I have discussed having your “IP house” in order long before trying to exit your business, and how the same is true when looking to acquire a company.

Even as a small business without a ton of IP, having one’s IP house in order is often easier said than done; but mistakes occur – and it is a lot less painful to learn from others’ mistakes.

The most common IP blunders center around trademarks and trade secrets. Sure, mistakes associated with inventions and patents occur, but businesses tend to play more “fast and loose” with trademarks and trade secrets, which leads to problems.

Did you know, trademarks go back to ancient times when stone cutters would leave their mark in Egyptian structures (as early as about 4000 BC). Trademark laws, however, are much more recent. In England in 1862, the Merchandise Marks Act made it a criminal offense to copy another’s mark “with intent to defraud or to enable another to defraud.” In 1870 the US enacted its own trademark law, which was struck down as unconstitutional; however in 1881 Congress tried again and was successful.

Simply put, trademarks are about protecting the public from confusion over competing goods and services that are using the same or similar designations. Trademarks are meant to protect consumers.

On the other hand, trade secrets may be anything that:

1. a) is a process, invention, or information that has economic value;
2. b) is actually “secret,” i.e., not generally known in the industry, & not readily ascertainable by others;
3. c) the owner has taken reasonable steps to maintain its secrecy.

Small business owners need to carefully review what information your company has which, if it fell into the competitor’s hands, would be a problem. Then take the right steps to protect it. It may be vendor lists, customer lists, recipes and processes, are just a few examples.

Most businesses slip up on this last point by failing to take protective measures such as making ever plant visitor and employee sign a Nondisclosure Agreement (NDA). The importance of employee signed NDA’s cannot be overstated – after all, it is pretty compelling to provide an employee leaving the company with a copy of their previously signed NDA during an exit interview. Keep in mind that NDA’s are generally enforceable, while the validity of noncompete agreements varies depending on the state and the scope of the agreement.

In the second and third segments we discussed the stories of “how BMW stuck it to Volkswagen regarding Rolls Royce” and “how a 30 year old settlement agreement can come back to haunt you.” We didn’t even get to a great story about how after acquiring the Sea World parks, Anheuser-Busch learned that the trademark “Shamu” was not owned by the seller.

Unfortunately we ran out of time and did not have a chance to dive deep into trade secrets and how taking the appropriate precautions and prove to be very valuable (and don’t be fooled into thinking they are only relevant to high-tech innovations); particularly in an era when a single thumb drive can copy decades worth of company records. A few key steps ever small business owner should take to protect their trade secrets include:

1. limit access to only those that need to know the secrets;
2. use secondary high security areas of your computer network to store trade secrets;
3. require password access to the files
4. have employees sign NDA’s
5. monitor network activity for bulk file copying / transfer

Think this isn’t serious stuff… just last month a former Google engineer was charged with stealing self-driving car technology from the company shortly before he joined Uber’s efforts to catch up in the high-stakes race to build robotic vehicles.