Understanding IP: What Is It and Why It’s Important For Your Enterprise

| November 8 2022

Your company’s intellectual property (IP) is its most valuable asset—but are you doing enough to protect it? If someone challenges your ownership, will you be ready and able to respond quickly and decisively with proof that your team developed an idea, design, or process?

That’s what our latest Guide is about, and that’s what we’re breaking down in this blog series. Today’s post is the first of three blogs that will discuss:

  • why IP is critical to business success and how IP can be legally protected, 
  • where modern IP data is located and why it’s so difficult to manage, and 
  • what companies can do to protect their IP. 

Let’s start by first considering why IP is a company’s lifeblood.

 

Why Is IP So Important?

Corporate juggernauts like Nike, Coca-Cola, and Apple dominate the market because of their intellectual property (IP). As the U.S. Chamber of Commerce puts it, “IP is a key driver of economic growth and innovation.” But why is that? 

The short answer is that companies depend on IP law to protect their innovations, ideas, and efforts, and customers depend on IP law to ensure they can trust brands to meet their expectations. 

For example, customers recognize the Nike swoosh trademark and expect a specific shoe type and quality to be associated with it. Nike loses a great deal if its unique designs or manufacturing specifications are stolen and potentially used by a competitive company. At the same time, if someone stole Nike’s logo and put it on subpar shoes, customers would be disappointed in the poor quality, and Nike’s reputation would suffer. 

But to reap the benefits of IP protections, companies must be able to prove ownership of their ideas—and that’s becoming an increasingly difficult task. Today’s engineers and designers can’t just point to their hard copy notebooks in which they sketched out designs or wrote product notes. Instead, the proof of their creations and ideas might be scattered across a dozen web-based apps. Extracting that proof and presenting it to a court is a challenge for which many companies haven’t adequately prepared. 

Before we go too far, let’s take a step back to clarify what IP is and how it’s protected.

 

What Is IP?

According to the World Intellectual Property Organization (WIPO), intellectual property “refers to creations of the mind, such as inventions; literary and artistic works; designs; and symbols, names, and images used in commerce.” That broad definition covers the various aspects of a company’s brand, from its name, logo, brand colors, and slogan to the designs, technologies, and processes it uses to create its products. 

IP protections fall under four major categories

  • Patents give the inventor the exclusive right to build, use, and sell a product or design; 
  • Trademarks protect the logos, designs, slogans, and brand marks that differentiate a company and its goods; 
  • Copyright covers creative arts such as literature, music, and paintings; and 
  • Trade secrets are the nuggets of insider information—generally protected through nondisclosure agreements—that companies use to create their products. 

 

For example, KFC’s famous “11 herbs and spices” to make its original recipe for fried chicken is a trade secret—though not necessarily a very well-kept one

Or consider the case of American Superconductor, a company that contracted with Sinovel, a Chinese manufacturer, to build wind turbines using proprietary technology. Soon after, Sinovel started refusing to pay for shipments—to the tune of $70 million—and American Superconductor stock plummeted. What had gone wrong? An employee had been bribed into providing Sinovel with the essential source code that controlled the wind turbines, rendering American Superconductor superfluous. That IP leakage “nearly killed” American Superconductor, causing it to lose almost a billion dollars in equity. 

The key to protecting your company’s IP is proving that you own a product, feature, or design because your people developed it. And that proof depends on data. 

Where do we find that data? That’s what we’ll discuss in our next post in this blog series. 

Eager to find out right now? We’ve got you covered! Check out Protecting Your Intellectual Property: A Guide to Your Company’s Most Valuable Asset to learn more. Or visit hanzo.co to see how we can help you start protecting your IP today.

2022_q4_blog_1_understanding_ip_1200x627

DOWNLOAD THE GUIDE

Related posts

Enterprise Challenges to Protecting Your Company’s Most Valuable Asset, Intellectual Property

Enterprise Challenges to...

It seems like it should be easy to prove that your company owns its intellectual property (IP)—but these days, it can ...

Read More >
Hanzo & ACEDS To Speak on Collaboration Data Benchmarking Report for Ediscovery Day

Hanzo & ACEDS To Speak on...

We've come to that part of the calendar year known as the "holiday season." Yes, there are the traditional holidays we ...

Read More >
Compliance Update: Unauthorized Messaging Apps Lead to 1.8B in Fines

Compliance Update:...

According to a recent press release from the Securities Exchange Commission (SEC), sixteen Wall Street firms were fined ...

Read More >

Get in Touch to Learn More

Hanzo’s purpose-built, best-in-class solutions can help your readiness to respond to the next discovery request, investigation, or audit. Contact us to learn more.

Contact Us