one major difference between a creative enterprise and a business that doesn't produce anything artistic or unique lies in the value of its original ideas. creative material is known as intellectual property (IP), and according to the guest speakers at this week's NxLevel class, isn't something to be considered lightly.
intellectual property, that which is created in the mind of someone or a group of people, is still property. and just as people whose homes have been broken into and had their possessions stolen feel violated, people whose intellectual property has been taken feel no less violated. with technology making it increasingly easier to share (and steal) information, the new economy of IP is forcing entrepreneurs to rethink their property rights.
what kinds of things (i.e. ideas) do people have a right to call their property? to what kind of compensation are they entitled if someone takes that property? these questions are not easily answered. luckily we had the expertise of steve replin and dave ratner of replin, rhoades & roper to discuss the importance of protecting creative ideas and assembling the right team of experts to achieve our business goals.
replin's firm specializes in intellectual property legislation and law for the creative arts. and, as he explained in class on tuesday night, the importance of using the right attorney for creative law is akin to selecting the appropriate doctor for a patient's specific injury. for example, you wouldn't go to podiatrist for a broken arm, so why would you go to a divorce lawyer for intellectual property protection. makes sense to me.
now you'll be able to find better and more accurate information on intellectual property law from more qualified sources than this blog, so i'll skip the whole idea of trying to explain the intricacies of IP protection here. however, i can recount what we discussed in order to give you direction in case you were motivated to research these topics on your own.
both replin and ratner covered areas concerning entity formation (sole proprietorships, LLCs and corporations), copyright protection (for original works), trademarks (indicating the source of a good or service), contract specifics, employees vs. independent contractors and the importance of keeping accurate books and records. collectively these areas comprise a large portion of the legal concerns an entrepreneur needs to familiarize herself with.
the most obvious reason a creative entrepreneur should protect intellectual property is that they could lose it to dishonest employees or to competitors if they don't. additionally, if you develop said creative ideas while employed by your own corporation and fail to reserve their rights, the corporation may actually own the ideas. if the corporation ends up selling its assets, or is forced to relinquish its assets by court order or creditors, one could find that their copyrights, patents, proprietary information and other intellectual property belong to a third party outside the organization. ouch.
... just another reason to identify ownership of IP in all written agreements and contracts - even if you're a single-shareholder corp. - our attorney friends recommended.
confucius say people gain wisdom in three ways: "first, by reflection, which is noblest; second, by imitation, which is easiest; and third by experience, which is the bitterest." the same might be applied in enterprise. while businesses strive to reflect and pursue the heights of creativity and/or innovation, it is critically important to secure intellectual property lest competitors achieve greater innovation through idea "imitation." obviously this would create quite the bitter experience that could have been prevented by ensuring that the intellectual property was secured to begin with.
like our NxLevel textbook says, intellectual property protection is an extremely complicated subject in a constant state of flux. "the services of an (IP) attorney are essential and well worth paying for. and now, more than ever, you will want an attorney who makes a point of keeping up with the latest domestic and international developments in this evolving field."
don't take my word for it... research IP on your own. your ideas are worth it.