Intellectual Property Infringement: What Real Business Owners Need to Know

By business.com editorial staff,
business.com writer
| Updated
Jun 01, 2020
Image Credit: Gajus / Getty Images

Your guide to copyrights, patents, trademarks and intellectual property infringement.

  • Finding ways to ward off intellectual property infringement is a topic that is commonly discussed among small business owners.
  • Intellectual property infringement is defined as anything that breaches or violates intellectual property rights.
  • The four types of intellectual property are patents, trademarks, copyrights, and trade secrets.

Intellectual property infringement is a hot topic among small business owners. Throughout the active business.com community, lots of entrepreneurs discuss strategies to avoid violating intellectual property laws and how to protect their own businesses by using such laws. To make the topic a little clearer we created this FAQ guide to intellectual property infringement, inspired by questions from the business.com community.

What constitutes intellectual property infringement?

According to Lexology, intellectual property infringement is defined as anything that breaches or violates intellectual property rights. In other words, if you have work that is protected by IP laws and it has been copied or otherwise used in an inappropriate manner without your permission, this is what constitutes intellectual property infringement.

IP copyright infringement can range from things such as piracy, copy reproduction, materials that are illegally distributed and in violation of copyright laws, and more.

If you are wondering what the different types of intellectual property are, according to the Innovation Asset Group, they are as follows:

  • Patent: One of the most common types of intellectual property involve patents. Patents are used to protect innovative ideas and processes that are nonobvious and useful. This is the concept that most often comes to mind when you think of intellectual property. Additionally, patents are also used to protect species and strains of plants that have been newly genetically engineered.

  • Trademark: Another type of intellectual property is the trademark. Unlike a patent, trademarks protect words, phrases, sounds, smells, symbols, color schemes, etc. Trademarks are considered assets to companies in that they serve as a means of identifying well-known brands, their products and affiliates.

  • Copyright: Another type of intellectual property is the copyright. The copyright does not protect ideas, rather, they protect the way in which ideas are expressed. This includes things such as written works, music, art, architectural drawings, programming codes for software, and more.

  • Trade secret: Lastly, a trade secret is a term used to describe things such as systems, proprietary procedures, devices, strategies, formulas or other relevant information that is considered confidential and exclusive to the companies that are using them. These are protected because they serve to give competitive advantages to businesses.

What is covered under the category of intellectual property?

Intellectual property can be a written work, a work of art, a discovery, invention, logo or anything else that can be protected by patents, trademarks and copyrights. To learn more about protecting your intellectual property check out our articles on patent filing FAQs and how to apply for a copyright online. For information on filing for a trademark, visit the U.S. Patent and Trademark Office's website.

How can I seek out partnerships and collaborative opportunities without someone ripping off my idea?

First and foremost, consult with a lawyer. Do not leave anything to handshake deals or verbal promises. There are several ways to protect your business ideas during the collaboration phase, including patents, provisional patents, trademarks and nondisclosure agreements.

If you're outsourcing the production of a product, especially overseas, take extra precautions. In addition to doing heavy-duty research on the legitimacy of the production company, consult with a lawyer who specializes in helping protect American companies that produce overseas.

What is a confidential disclosure agreement?

A confidential disclosure agreement (CDA) may also be called a nondisclosure agreement (NDA) or simply a confidentiality agreement (CA). A CDA is a contract between different parties who wish to share information with each other but want to restrict the sharing of such information to a specific group of people or organizations.

How can I get investors to sign a confidential disclosure agreement?

There's a lot of buzz about CDAs in the business.com community. One common question is how to get investors to sign a CDA, but perhaps a better question would be whether you should ask investors to sign a CDA in the first place.

If you are seeking investment from legitimate investors and established VCs, you may face some backlash if you ask them to sign a CDA before even hearing your pitch. Active investors hear lots of pitches and asking for a CDA can be a bit like asking someone for a prenup on the first date; it implies not only that you think your idea is better than anything they've ever heard but also that they might be people who would steal your idea.

Do your homework on your investors before you get to the pitch, make sure there are no potential conflicts of interest, and when in doubt, ask your attorney for their opinion.

If you're working on producing a written work and you want to include quotations or passages from other copyrighted pieces you are not necessarily violating copyright laws, but there are parameters. The right to quote is what allows individuals to incorporate quotations within their work; however, to do so legally, the quotations cannot make up the majority of the work – there still has to be original content that brings value to the work. Additionally, any quotations you include must be properly cited.

There's also something called fair use law, which is what allows creators to produce parodies, criticisms and other derivative works without asking for permission from the original creator. It should be noted, though, that including images or audio clips, as well as written words, is a completely different ball game from exclusively using quotations.

If you're at all concerned about infringing on a copyright, consult a copyright lawyer before you shop your work around to publishers. 

business.com editorial staff
business.com editorial staff
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