Leverage Your Intellectual Property
Intellectual property sounds like an obscure corner of law that most of us contractors can forget about. Not so. If you ignore patent and copyright, you may be missing out on a major revenue stream. And minding your patents and copyrights can help you avoid deal-breaking disputes with clients, or perhaps even litigation.
To put intellectual property on your radar screen, we've picked the brains of a couple of attorneys who know their stuff when it comes to patent and copyright. Of course, this article does not offer professional legal advice, and you should consult your own lawyer.
Patent Your Idea or Process
What is a patent, anyway? Patents help inventors reap the value of processes, machines, designs or other elements of a product. "A patent gives its inventor the right to prevent others from making, using or selling the patented subject matter described in words in the patent's claims," writes attorney Richard Harroch in Small Business Kit for Dummies.
Engineers and software developers often receive patents on their innovations, and even management consultants and executives are obtaining patent protection for business methods they've developed. A familiar example from the Internet world is the one-click ordering method patented by the folks at Amazon.com.
Consultants and their clients can get into trouble when they haven't clearly defined where the consultant's expertise ends and the work done for the client begins. "The agreement needs to clearly point out the difference between tools and the work produced," says Jeffrey Kuester, a partner with Atlanta-based intellectual property law firm Thomas, Kayden, Horstemeyer & Risley LLP.
"If you come up with a contribution on a project you're working on, you need to understand who owns that," Kuester says. If you don't, "the situation can explode on you down the road," he warns.
For more information on patents, refer to the US Patent and Trademark Office or the primer from Nolo.com.
Copyright Your Creation
What if the work you create is a training manual, a graphic design, even a musical score? Before you enter into a contract with a client, you need to think about whether you want to sell them all rights to the work for an indefinite amount of time or instead license your creation with tight restrictions on when, where and in what media your client may use it. If you engineer software, you also must consider whether copyright or patent offers the best protection of your work.
"A copyright gives the owner the exclusive right to make copies of the work and to prepare derivative works (such as revisions) based on the copyrighted work,” Harroch says. You need not register your work with the US Copyright Office in order to copyright it.
And Kuester adds, "A copyright exists as soon as the work is made tangible" by writing it down or saving it to a hard drive, for example. But he advises you to register your copyrighted work, because doing so may make it easier for you to recover damages from an infringer, or better yet, to discourage infringement before it happens.
If consultants don't want to give away all rights to their work, they should consider licensing it, Kuester says. The several copyrights -- copying, reproduction, distribution, performance, display and making derivative works -- can be unbundled, he points out. "You can negotiate for these separately."
Unlike patent, the ownership of copyright can pass automatically from the consultant who produced the work to the client, if the contract describes the relationship as "work for hire." "If you don't want the arrangement to be work for hire, don't sign an agreement that says so," Kuester cautions. This may require you to adopt a tough negotiating position. But in a tight labor market, you just might get what you ask for.