What should I do if my business faces an intellectual property lawsuit?

Business owners need to take steps to protect their creations. This goes far beyond setting up a business structure like a corporation or partnership to provide liability protection. You also need to protect your intellectual property.

What is intellectual property?

Intellectual property is a broad term that can encompass inventions created by your business. It can include goods as well as services. It is important to take steps to protect these creations, so they are not stolen by competitors.

The right type of protection will depend on the intellectual property. Copyrights are available for original artistic works like music, literature, software, and architecture designs. Trademarks are great for marketing material that is related to your business-like symbols or a catchphrase. Patents work to protect inventions and trade secrets protect proprietary information like a formula or plan.

Any good business owner knows that these protections are only helpful if the one holding the protection is willing to use it.

What are some common situations that can leave my business open to allegations of intellectual property theft?

A business owner may find themselves accused of intellectual property theft. There are many different situations that can result in these allegations but some of the more common include:

• New websites. Make sure to get intellectual property rights for anything created for your business. In addition to the goods or services created by your business you should also protect things created by a vendor. Examples include a website created for your business. When it comes to use of a vendor, make sure the contract states that your business owns the final product.
• Social media posts. Social media provides a great marketing platform, but it can also lead to allegations of misuse of another’s intellectual property. Make sure you have the right permissions before using any symbol, phrase, or photo.
• New hires. New employees may have information from their previous position. Depending on the information they have and how they use it, their former employer could claim the worker illegally used protected information. You can reduce this risk by addressing it during training.

Allegations of a violation can result in a lawsuit. This can lead to steep financial penalties, a court order to stop whatever you are doing that allegedly rises to the level of a violation, and damage to your business’ reputation.

What should I do if my business is accused of IP theft?

There are defenses to these allegations. It is possible the intellectual property owner failed to renew their protections and the protections no longer exist, that your business had permission to use the material in question, or that the situation is one that qualifies for fair use. The right defense may be one of these, a combination, or another strategy all together. It is important to discuss these and other options with legal counsel experienced in this area of the law to better ensure you tailor a defense strategy that is best for your specific situation.

It is important to take the allegations seriously. The penalties noted above are serious and, in extreme cases, can also include criminal implications.