Intellectual Property: 5 Problems You Should Expect

This article is a reprint of Wise Bread's contribution to OPEN Forum from American Express -- where small business owners can get advice from experts and share tips with each other.

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Every business owner deals in intellectual property, whether you're selling licensed products or you're just writing copy for your websites. There are plenty of problems that can come up when you're dealing with your intellectual property — you can avoid many of these problems, but it requires having a strategy for handling concerns an some help from an expert in intellectual property law.

1. Earning From Your Intellectual Property

One of the biggest possible problems that a small business owner can face is finding that someone else has been earning money from products that infringe on your own, taking money out of your pocket. Maria Brophy has run into this problem time and again when licensing Drew Brophy's art. She describes the problem: “We run into the issue of infringement from other companies. They see how well his artwork on products sells (i.e., boogieboards) and then will copy his style and his art, but change it just enough so that they cannot be sued. It causes confusion — as many people see these sub-standard products and think that it's Drew Brophy art on it."

Such situations can do more than harm your own product line. If you've licensed an image or a product to another company, your licensees can wind up with trouble as well. Brophy has had licensees decide not to renew contracts due to infringing products. In situations where the artwork has been changed at least somewhat, Brophy finds that suing is not an ideal option: "...our attorney advised against suing, stating that we had a slim chance of winning because they had changed the art just enough to get away with it."

2. Borrowed Copy and Other Materials

Gisela McKay's copy is very popular. She knows that for a fact because she gets routine notification from Copyscape (a tool that alerts you when someone uses materials from your website) that yet another website has copied her materials. "We're a small business and we are constantly finding our content all over the web. From one-man shows liberally helping themselves to our marketing copy, to large industry associations borrowing a paragraph here and there, our Copyscape report is forever identifying new people who have copied and pasted — very rarely even altering a word...there is the person in India who liked our content and concept so much, that he borrowed the entire website, altering a few minor things, like the logo (still clearly inspired by ours, though) and registered Wellergise.com — to our original Wellergize. After a cease and desist across the ocean, his content is mostly changed, but you can still tell the influence."

It's not always a stranger taking McKay's copyrighted materials. She says, "My favorite Copyscape report, though, when we learned that a former business partner of mine had copied, word for word, our new 'advertise with us' content, without even bothering to alter the statistics contained on the page. It's not bad enough that she is still using the copy I wrote on our joint business website (when she promised to have a new website developed over three years ago), apparently, she has decided that my new company and staff should write the content for her new website in development (now locked down behind a password)."

When you're working with a partner, it's good business sense to lay out who owns intellectual property at the end of the contractual relationship.

3. A Lack of Understanding

A more common intellectual property issue these days is a lack of understanding that there are laws governing a variety of different types of intellectual property. Many people simply assume that if something is online — like an image — it's free to use. Luckily, such situations are typically easy to resolve with a letter from a lawyer. It's more a matter of educating infringers than anything else.

But when you're dealing with someone based in another country, especially one with very different intellectual property laws, a simple “cease and desist” letter may not be enough. It can be very difficult to assert your ownership of a particular piece of material when you're dealing with not only a lack of understanding of the law but also cultural and language differences.

4. Accusations of Infringement

Not all intellectual property problems come down to dealing with people and businesses infringing on your work. You may find yourself on the receiving end of legal action regarding intellectual property. Even when it seems that you've done nothing wrong, it's worth consulting with a lawyer. Intellectual property laws are not necessarily obvious. What may seem like a perfectly legal step can cause more problems than you might expect.

Just because there is an accusation, however, does not mean that legal action immediately follows. Depending on the truth of the matter, you can settle or, in some cases, even counter-sue. Because of the complexities of such cases, maintaining control of your intellectual property is crucial. That can include filing the correct paperwork for a copyright, patent or trademark, as well as defending your intellectual property against even minor infringement.

5. Small Problems Made Worse

Working with legal counsel — and heeding your lawyer's advice — is important, no matter what you feel your position is when it comes to a piece of intellectual property. Ben Wright worked as general counsel for a software company that held several patents. "Our CEO believed that a competitor was violating the patents, but he made a mistake. He told the competitor that the competitor violated the patents, and he said this in the presence of a customer. The competitor sued our company, saying in effect that we had called the competitor's integrity into question and the competitor was entitled to clear its name. Our company was not prepared for this lawsuit...We quickly settled the suit on unfavorable terms."

Wright suggests that the best way to handle a situation where a competitor seems to violating your intellectual property is to leave the matter to a lawyer. Certainly, no public accusations should be made before you're actually ready for a lawsuit.