I deal with a lot of businesses, including many small businesses and golf businesses. This gives me an opportunity to observe many amazing things. For instance, most companies have a written procedure regarding who may approve Purchase Order over a specific dollar amount. Further, almost all employees know who within any given organization is authorized to sign contracts. BUT, I estimate that over 50% of companies to not have a formal process regarding the creation, protection, and enforcement of intellectual property, whether it’s patents, trademarks, copyrights, trade secrets, customers lists, marketing strategies, etc… This is particularly true in companies that have annual revenues of less than $15 million.

This post provides a brief outline of some basic procedures that are often incorporated into a systematic, proactive approach to intellectual property (IP) protection. The small business owner may include as many, or as few, of the procedures found below as needed.

#1: Form an Intellectual Property Committee

An IP committee consists of people within the business who are responsible for identifying and rewarding innovation, making decisions regarding potential IP issues, and writing the procedures that form the backbone of the business' IP protection system. The committee should have at least one decision maker (i.e. an officer or high-level manager) and a patent attorney. The committee's greatest responsibility is to train other employees to raise awareness and foster innovative thinking.

#2: Review the Employment Agreement

The detail of an employee agreement can be extensive; however, from a patent, trademark, and copyright perspective, the employee agreement should contain an automatic assignment from the employee to the employer for all types of intellectual property. In addition, the employment agreement should contain requirements that employees automatically and promptly disclose inventions and provide full and complete cooperation in the development and pursuit of IP protection.

#3: Create an Invention Disclosure/Submission Procedure

A purpose of the invention disclosure procedure is to provide a means for capturing and reviewing employee innovation. To capture employee innovation, the IP committee members should institute an employee awareness program regarding invention development. The awareness program should introduce an invention disclosure form (i.e. a standard question and answer form that inventors fill out) and explain how and when invention disclosures are reviewed. All invention disclosures should be reviewed by the IP committee on a periodic basis. If the IP committee determines that an invention may have sufficient business impact, the company can pursue a patent, trademark, or copyright application, or create documentation for trade secret protection.

#4: Establish an Invention Award Policy

One purpose of the invention award policy is to give notice to employees that they will be rewarded for their efforts. For example, the invention award policy may establish a cash award if a patent application is submitted, another cash award if a patent issues from the patent application, and, possibly, another cash award calculated based on a percentage of sales of the patented invention over a period of time. Any invention award policy should be promoted to employees by the IP committee.

#5: Create A Publication Review Procedure

One purpose of the publication review procedure is to prevent employees from publicly disclosing an invention. Public disclosure of an invention may prohibit a patent from issuing from a patent application filed after the public disclosure. More significantly, public disclosure may invalidate a patent granted without knowledge of such disclosure. Therefore, the IP committee should review the substantive content of all proposed publications prior to public disclosure.

#6: Promote Invention Record Keeping Procedure

A purpose of the invention record keeping procedure is to establish a set of guidelines for entry of information into laboratory type logbooks. Information entered may be "the" determining factor if problems, for example, with inventorship or a prior art reference, develop prior to, or during, prosecution of a patent application. This procedure is targeted mainly at employees, such as scientists, engineers, and designers, who have a primary responsibility for developing inventions for the business.

#7: Setup An IP Infringement Notification Procedure

There is a two-fold purpose for setting up an IP infringement notification procedure. The first purpose is putting employees on the "offensive." In other words, the IP infringement notification procedure should include training for officers, sales people, field service technicians, or anyone who has regular contact with a competitor's products. The substance of training should be on how to identify and gather information on a competitor's potentially infringing products. In addition, while on the offense, employees should know what not to say to customers and competitors regarding potentially infringing products. An inadvertent word may trigger litigation. The IP committee should notify and work closely with patent counsel to evaluate a competitor's products for infringement.

The second aspect of the IP infringement notification procedure is "defensive." That is, the IP infringement notification procedure should identify potentially harmful patents, published patent applications, and patent pending products so that the business does not inadvertently engage in infringing activity. As a side benefit of a good defense, the procedure may provide opportunities to engineer around patents, thus possibly making better products. Therefore, the IP committee should regularly search for and review patents, published patent applications, and gather "patent pending" products introduced by the competition.

#8: Review Purchase Order Language

While purchase orders (POs) are largely ignored in day-to-day operations of most all businesses, their language can be critical in IP litigation. The IP committee should review their company's PO language and establish a procedure for dealing with their suppliers’ POs. The tiny, densely-packed typeface should contain an IP clause that distributes infringement liability between the buyer and the seller.

#9: Review or Create Visitor Agreements

The purpose of the visitor agreements is to put a visitor on notice that what they see or hear may be confidential. The visitor agreement may be a Confidentiality or None Disclosure Agreement (NDA). Furthermore, the visitor should be made aware that disclosure to others of the business’ confidential information will be considered actionable. That being said, the IP committee should take action to keep vendors from walking into company facilities without an escort. Make visitors sign in, and require confidentiality each time they sign in. If they walk through the facilities, the escorts should know to avoid trade secret areas and materials. Finally, the IP committee should mark sensitive areas with "Restricted Area" and "Authorized Personnel Only" signs.

#10: Document Security Procedures

While having other valuable functions, document security procedures should be in place to prevent employees from giving away or stealing business IP. In addition, installation of unauthorized software is a problem primarily at businesses which do not have procedures in place. Unauthorized software may trigger expensive (many times treble the market cost of the software) copyright infringement problems. Of course, document security is difficult in the age of email and compact data storage, but it is necessary. At a minimum, the IP committee should have some oversight of the document security procedures. An often neglected portion of document security is the retention policy. The IP committee should develop a procedure for secure disposal of confidential material, and then enforce it to the letter.