Cashing in on Your Intellectual Property

There's money in your patented or protected ideas
By Greg Brown Every small business that suddenly grows big is based on an innovation of some kind. What's less common is that the actual innovator has the focus or financial reach to turn the idea into cash. Learning how to protect your big ideas can mean later turning know-how into a business unto itself. Here's a quick primer on how to make sure your secret recipe or better mousetrap doesn't end up lining someone else's pocket.

Do you own what you intend to sell?

It's easy to get caught up in the notion that your intellectual work is inherently valuable. But first, figure out if you actually control what you intend to sell.
Try:  The U.S. Patent and Trademark Office (USPTO) has a good frequently asked questions page for those starting out, including the difference between copyrights from patents, directions on forms and basic advice.

Get thee to a decent lawyer

For copyright, it's easy under U.S law. Publish and you're done, although most creative works are still marked with the telltale "C" and the date and you can, technically, register a copyright. Trademarks, like brand names or slogans, should be registered and patents - actual products or processes - are very complex and require close legal review.
Try:  Copyright basics are explained by the Library of Congress. Trademarks and service marks are registered electronically with the USPTO, which also maintains a database of active patent attorneys. Creative Commons, a Web entity that seeks to simplify copyright in the rapidly growing and hard-to-trace digital world, offers several means to control your work online.

Know the basics of licensing

To make money, you have to sell the rights to use your intellectual property (or conversely, limit access to it), but doing so is fraught with - gasp! - paperwork.
Try:  The World Intellectual Property Association maintains a site just for small and medium-sized businesses that covers copyrights, patents, trademarks and licensing. Consulting operations like Dennemeyer and Consor can help develop and protect your company's protected property. eCoach has model licensing contracts online.

Understand your own business plan if it involves a well-known brand

Want to sell Brie in Brooklyn or hybrid hatchbacks in Hollywood? Find out who really controls what, first or you'll end up getting a sackload of cease-and-desist letters.
Try:  The World Intellectual Property Organization maintains international databases on patents, trademarks, copyrights and names of origin (like Bordeaux wine and Parmesan cheese), among others.

When too much control is bad for you

There is a raging debate among economists about the importance of protecting ideas. The much-debated "open source" model for software, such as Linux, is already being copied by, among all things, brewers. In a nutshell, an army of brains across the Web can vastly improve upon your good idea, so you might as well publish your process and invite them in.
Try:  OpenSource.org is a good distillation of the notion from the perspective of software, where open source began.

• Patent searches and legal billing hours are not cheap. Make sure your idea is truly novel and clearly lucrative before hiring a patent attorney.
• If you run an organization of any considerable size, put employees under a general confidentiality agreement that gives you control over what they invent or innovate on your time.
• International enforcement is sketchy at best. If you find a foreign company selling your intellectual property or brand, probably better to entice them with an offer to become a reseller than go at them with a big stick.
• Patents and copyrights do expire. Understand who in your family will gain control upon your death of these assets and inform them on how extend those rights to their legal limits.