Intellectual property (IP) rights are often the most valuable asset possessed by a California company.

As we previously discussed here, almost every aspect of your business has legally protectible and valuable IP characteristics including:

• Your business name;
• Distinctive packaging;
• Logos;
• Source codes;
• Sales literature;
• Website design;
• Client lists;
• Formulae;
• Confidential processes; and
• Aesthetic designs.

These are the things that distinguish your products in the marketplace and give you a competitive advantage.

IP Inventory

 There are four main types of Intellectual Property:

• Trade Secrets;
• Trademarks (including internet domain names);
• Copyrights; and
• Patents.

Trade Secrets

 Trade secrets are often the key to business success and are protected under the California version of the Uniform Trade Secrets Act (“UTSA”). See Cal. Civ. Code §§ 3426, et. seq. The UTSA prohibits theft of your trade secrets. In addition, under some circumstances, stealing trade secrets can be punished as a crime. See Cal. Penal Code §§ 499c, 502.

To be entitled to protection under the UTSA, you and your company must take active steps to actually keep the information a secret. In other words, you must prevent disclosure, accidental or otherwise, of the secret(s) to anyone not otherwise entitled to the know the information. Some of the steps you must take to establish a trade secret are:

• Label documents/disks/flash drives/devices containing the secrets and limit the number of copies;
• Secure where the trade secrets are stored (e.g., locked cabinets, offsite storage, security guards);
• Maintain secrecy with employees, non-employees and third parties via confidentiality and non-disclosure agreements; and
• Train your staff to identify and protect trade secret materials.

The final two are particularly important. If any outside vendors or potential investors have access to the “secrets,” then a court will be unlikely to deem the information “secret.” Thus, it is important to have confidentiality and non-disclosure agreements ready to be signed as stand-alone agreements and as part of all of your vendor, financing, licensing, and sales agreements.

Similarly, you need confidentiality and non-disclosure provisions in all of your employee contracts and in all employee handbooks as well as having written company-wide policies that maintain the secrecy of your information. Further, your employees will need training on what is required to maintain the secrecy of the information and on how to avoid accidental disclosure. An experienced business attorney like Michael J, Leonard, Esq., at San Diego Corporate Law can help draft such agreements and employee handbooks.

Trademarks

 Having unique and easily recognized marks and logos helps capture and maintain marketshare. For new companies, it is best to register, at minimum, the name of the company and the name that will be used as the domain name for the company’s website (assuming that the names meet the requirements for registration).

Internet Domain Names

 Domain names are considered a different category of IP than trademarks. Trademarks are about use of a mark, logo, or brand in commerce. However, domain names are not about business use. Trademarks are registered through governmental agencies – the US Patent and Trademark Office for federally protected trademarks and the California Secretary of State for state registered trademarks. By contrast, domain names are registered through the Internet Corporation for Assigned Names and Numbers (“ICANN”) which is a private, non-profit organization formed specifically to control registration, use, and management of domain names.

There is an interplay between registering your company name as a trademark and protecting your domain name. Under ICANN’s rules, a trademark owner can prevent another from using a confusing or deceptively similar domain name if your company has trademarked the company name and/or the domain name. Sadly, domain name theft has become an increasing problem in recent years.

Copyrights

Copyrights protect any creative work that is used for your business. Examples include logos, product designs, one-off slogans, graphic designs, moving images, audio signatures, etc.

Patents

If your company has a new process or invention, then patent protection is available. As with trade secrets, a new invention is often the key to business success. The process for obtaining a patent is complex and many specific legal requirements must be met.

Contact SDCL Today

 If you need legal advice related to your company’s IP, call corporate attorney Michael Leonard, Esq., of San Diego Corporate Law. Mr. Leonard was named “Best of the Bar” in 2017 by the San Diego Business Journal. To schedule a consultation, email or call (858) 483-9200.

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