What New Entrepreneurs Should Know About Intellectual Property
By Hunter Amato — Guest Writer, Inland Empire Business Journal
Delving into the world of entrepreneurship can be a daunting task. The independence and freedom that entrepreneurship offers open up significant opportunities that cannot be found in a more standard workplace, but with more independence comes more responsibility. As an independent business, it is crucial to sort out the important legal aspects that companies have to deal with on a regular basis. Intellectual property law definitely falls into that category: complex, scary to some, but absolutely vital for entrepreneurs. Here, we break down some intellectual property basics, and how they affect you as a new entrepreneur.
Intellectual Property; What is it?
According to the World Intellectual Property Organization: “Intellectual property (IP) refers to creations of the mind, such as inventions; literary and artistic works; designs; and symbols, names and images used in commerce.” Obviously, “creations of the mind” is an extremely broad term, but IP law is actually a very broad field by necessity. As we will cover later, there are many different categories of IP that require different types of protections.
Physical property laws are pretty straightforward. If someone steals physical property, the victim suffers a loss and can claim damages. Intellectual property, on the other hand, is more complex. Theft of intellectual property doesn’t necessarily mean that the victim loses what they have. If someone steals your logo design, you still maintain possession of it.
In this case, however, intellectual property theft lessens the value of what you already have. Duplicate logos on the market can confuse customers and lead to brand incoherence. Copyright infringement can undercut the licensing profits of a creative artist. Stolen inventions undermine the research and development payoff of entrepreneurs, driving down incentives via competition.
IP violations can often be hard to prove as well. Most legal frameworks for protecting intellectual property require thorough documentation and disclosures of the work done since it is impossible to determine legally when someone had a mental breakthrough or initially thought of a concept. Even the boundaries between improving upon an existing invention and violating a previous patent can be hazy.
In the entrepreneurial field, intellectual property is one of the most valuable assets of any company. Startups exist because someone at the helm created or invented something useful and wants to manifest it into the market. Good ideas are what separate good companies from bad ones, and so it’s crucial to incentivize those ideas and protect them. That is where IP law and IP protections come in.
IP Law Categories
A broad range of intellectual property requires a broad range of IP laws. Let’s take a look at the four main categories of intellectual property in the United States: copyrights, patents, trademarks, and trade secrets.
A copyright grants protection to creative works of the mind. This can include writing, music, paintings, and other creative endeavors. Copyrights last for a long time—70 years after the death of the holder—and allow litigation in cases of infringement. This also enables the copyright holder to license their work for use by others and collect a royalty. Of course, fair use exceptions enable the use of copyright material for some not-for-profit purposes, including education.
Patents are the most significant category for new entrepreneurs. A patent allows a company to be the sole producer and seller of a specific invention or process for up to 20 years. This essentially grants a monopoly during that time span. Patents are crucial for entrepreneurs and inventors because they enable a realistic timeline for production and development, and ensure a good chance at a profit once the product is brought to market. Without patent protection, small businesses might never make any returns on their investment and are at risk for predatory companies copying them and even beating them to market.
Trademarks serve as brand identifiers. Trademarks can encompass features such as logos, brand names, slogans, and even jingles. Registered trademarks are required for any branding disputes across state lines, and given modern reliance on e-commerce, that applies to almost all businesses today.
Finally, trade secrets, as their name might suggest, encompass confidential information that aids in the competitive market success of a company. From supplier lists to secret recipes to drug testing protocols, these trade secrets can all be strengthened legally under IP law if there has been a reasonable effort made to ensure their secrecy (via confidentiality agreements and the like).
Entrepreneurship and IP
Much of what makes IP law important is directly applicable to entrepreneurship. New entrepreneurs should be well aware of how IP can help and hurt their business.
In today’s market, brand identity and name ID is more crucial than ever for capturing consumer attention and loyalty. Online reviews and ratings are a prominent part of e-commerce that develop consumer brand association. This is why trademarks are vital for new entrepreneurs; a good brand name and logo, without confusing imitators, can go a long way in leading to the success of that brand. Head to the official government page for trademark info and application instructions for your next steps.
As an entrepreneur, make sure to identify which of your internal mechanisms may count as trade secrets. This means examining what information or methods provide a benefit specifically by remaining secret. Then, implement confidentiality agreements and contract clauses to legally ensure that they stay that way. This enables recourse under intellectual property law later on if trade secrets are divulged by employees or stolen by competitors.
Entrepreneurs who develop any of their own public creative work should review the copyright protections and licensing opportunities available to them. U.S. law applies the principles of copyright to any creative work that is manifested in recording or release, but possessing a copyright filed with the U.S. Copyright Office can grant much better recourse and IP protection in the legal system. Of course, every business should be very aware that it is not itself infringing upon the copyrights of others and risking penalties.
Out of all the IP law types, patents are by far the most significant for entrepreneurs. Since many entrepreneurial ventures are based around inventing something new or making a substantial improvement upon an existing process, patenting should be a primary goal quite often.
The United States Patent and Trademark Office outlines the requirements that should be met in order to be eligible for patenting, which are extensive. One eligibility requirement is being sufficient novel, or unique and new. In order to determine this, a very thorough patent search is necessary. A patent search can illuminate both whether your idea is indeed new, and what that niche in the market looks like (if it is heavily saturated with related patents, for instance).
Processes and production methods can also be patented, as can nonfunctional design and aesthetic elements. This enables companies to protect their novel contributions to a preexisting market where a patent may have expired.
According to J.D. Houvener of Bold Patents Chicago, many entrepreneurs are at risk for missing deadlines or waiting too long to get sufficiently informed about IP options. “The same go-it-alone attitude that makes many entrepreneurs successful can also lead to overlooking of key things like the one-year patent filing deadline from the first disclosure or offer to sell an invention,” says Houvener.
As a new entrepreneur, you are most likely juggling hundreds of responsibilities trying to run or start a business. Intellectual property might seem like something to put off until later, and can be daunting at first glance. However, IP law can be crucial to the success of any new venture.
Entrepreneurs are valuable because of their intellectual contributions to projects, and those contributions can be governed and protected by IP protections as outlined in this article. Copyrights, trademarks, trade secrets, and patents all have their place in any new business, and many should be implemented as soon as possible.
Make sure to consult a qualified legal expert to see whether your company might be ripe for a patent or copyright. A patent attorney or law firm can point you in the right direction and potentially influence the way you approach your business strategy.
For more like this, head to our blog!
Hunter Amato is a content contributor for the Inland Empire Business Journal. Email: firstname.lastname@example.org
Supply Chain Delays and Strains to Continue through 2022
By Hema Dey, IEBJ Content Contributor
Managing Price Increases
From the start of the pandemic in 2020, businesses have been absorbing ongoing shocks that impacted operations and the bottom line. The supply chain delays and strains everybody hoped would resolve in 2021 seem set to continue through 2022; while the backlog of ships waiting for berths at the ports of Los Angeles and Long Beach fell to a low of 43 mid-March, experts expect a new surge of goods shipped from Asia after the Lunar New Year to drive those numbers up again. After that, the situation is unclear—the latest lockdowns in Shenzhen threaten to cut off supplies of parts and products when U.S. businesses are already starved from ongoing shortages.
At the same time, the war in Ukraine and sanctions on Russian oil are driving already-high fuel prices even higher around the world. While experts disagree on whether we can expect gas prices to keep climbing or that they’re near their peak, it’s clear significant relief is unlikely soon. That additional expense is unwelcome news for businesses of all kinds.
Knowing the current difficulties will be part of the landscape for the foreseeable future has brought many companies to the unavoidable conclusion that they have to raise their prices to stay in business. If you’ve delayed making changes in the hope that things would pass, you’re certainly not alone—but if you’re coming to the realization that you can’t wait to adjust your prices to reality anymore, then you’re not alone there either.
The Right Way to Handle Raising Prices
When raising your prices is a necessity, how you approach it can make a significant impact on minimizing any negative fallout. Your customers are naturally not going to be happy about seeing their costs go up. Anticipating such dissatisfaction is one reason why businesses put off making price adjustments much longer than they should. However, postponing the inevitable can harm your business and won’t change the factors that make an increase necessary. Here’s what you should be doing to manage price increases wisely.
The first thing to remember is that price increases don’t happen in a vacuum. Beyond simply considering the pressures on your business in terms of your growing costs, you need to know what your competitors are doing, and you need to find out fast. If your proposed price increases are wildly out of line with what the rest of your competition is doing, you could easily lose market share. We can assist in getting an up-to-date view on the moves your competitors are making to help you factor in this critical angle.
Next, you shouldn’t delay price increases, but you should also keep them realistic. Deferring the inevitable will weaken your business’s financial position and increase the pressure to put even higher prices in place when you finally do act. At the same time, you must keep in mind that your customers are almost certainly experiencing the effects of increased fuel costs and higher shipping rates just like you are. When clients feel like a business is taking advantage of a general atmosphere of inflation to boost their own profits at the expense of their customer base, they’re rarely quiet about it. Stick to doing what you have to do to keep your business healthy, and don’t be tempted to pad it.
Finally, this is absolutely the time to revisit your marketing strategy. When prices go up, buyer behavior changes. Review all your keyword searches to understand how these fluctuations may be affecting traffic to your website. Repositioning your business accordingly can help avoid unexpected hits to your sales and leads, and may even lead to new opportunities.
Trying to adjust to the current economic challenges can feel overwhelming for business owners. You don’t have to go it alone when you’re contemplating significant changes like raising your prices—calling in an expert consultant can give you confidence that you’re taking the right steps for the long-term good of your company and your customers. If you need benchmarking assistance, contact Iffel International here. We can help you take the right steps down a difficult road.
Q&A Session with Black Cooperative Investment Fund Executive Director—Kaine Nicholas
Q&A with Kaine Nicholas, Executive Director of Black Cooperative Investment Fund
By Josaline Cuesta, Small Business Majority, Senior California Program Manager, and IEBJ Contributor
Why is financial literacy important for small business owners? What are the pillars of financial literacy?
Financial literacy is the comfort level one may have with topics related to money and its management. Financial literacy is critical to success, and it’s where everything begins for small business owners.
At the beginning of a business venture, an entrepreneur can be cash-challenged and relatively inexperienced in practical business versus theory. It is important that while learning the business terrain, entrepreneurs have at the very least, a baseline of financial literacy to question documents and do calculations or have support to negotiate effective business terms. Any terms that are negotiated at the beginning of a venture can significantly affect the projections or the valuation of a business. These effects can vary widely, depending on the comfort level of financial literacy.
The pillars of financial literacy are banking, budgeting, saving, credit, debt, and investing. What matters most to small business owners is budgeting, banking, and credit, and we recommend focusing on that order for small business owners. Understanding the numbers, having the assets with banking partners that can offer solutions, and building business and personal credit are all imperative to small business owners. BCIF and its trusted partner, AmPac Business Capital can help everyone gain a firm awareness of these pillars.
What’s needed to create a strong financial plan?
What is needed to make a strong financial plan is the actions that happen alongside writing the actual financial plan. While one may be uncertain of the “hockey stick” or optimistic revenue, what people can control is the cost. Know those costs and how they change in a good, better, or best scenario to keep you prepared.
No one likes surprises. There is security and comfort in knowing that costs are consistent and predictable. Spend time conducting the research and use due diligence so that you and the financial partners understand the financial plan and financial statements.
What’s in a business plan, and why is having one essential for a small business owner?
A business plan is a document that, at its most basic level, can help small business owners navigate the who, what, where, why, and how to generate income with a product or service. The business plan tells the reader that this “document” is your prototype on paper. The business plan also helps readers understand the basic valuation of your business.
If your business plan is on paper, does it articulate the vision, or is it a requirement for a loan program? The business plan is important because it represents as the creator of the business. Thinking business out on paper can reduce mistakes in real-world execution.
What’s the best way to document and share major changes to a business plan with your financial advisor and employees, such as becoming a corporation or expanding to another state?
Ensure the establishment of company meetings and hold them routinely, preferably with quarterly updates. This allows stakeholders to receive firm-wide public information and establishes communication between leadership, management, and employees.
What are some tips for thinking strategically about cash flow?
One tip is to understand what is in the pipeline and/or accounts receivables and monitor subscriber trends to your products or solutions. When I ask business owners how their business is doing, they usually respond with, “it’s going well.” And I always ask myself, what does that really mean, and is the owner aware of the items that support healthy cash flow?
Is a personal credit score relevant to small business success? What defines a “good credit score” and how can you maintain one?
Personal credit is relevant to businesses at the earlier stages of a business. If used correctly, one should leverage good credit and create business credit as soon as possible. Personal credit and business credit are created differently and operate differently. That difference can be critical to accessing capital. Unfortunately, a “good credit score” is not universal. We recommend owners investigate the potential creditor by asking what numerical score and credit history on the credit report will produce a favorable outcome. A credit score and credit report are two components that contribute to a sizable credit decision. With that information, the small business owners have a credit “road map.” What is most important is that the business owner is proactive in the credit conversation. One can maintain and learn more with one of BCIF’s trusted partners, AmPac Business Capital.
What are the top three easy-to-navigate business loans for a startup business? Do the types of loans that are needed change in your 2nd or 3rd year of business?
The top and the easiest loan is a zero-interest loan based on an alternative way of evaluating personal credit and traditional risk models. If one can find a small business loan that targets a certain demographic or type of business, that should be extremely helpful. Third, look for a small business loan that can be forgiven.
The types of loans that could change in your second or third year of business can be tricky. Business success and loan/funding gaps require careful consideration, but most important, predictability.
How will I know that a financial literacy resource is proven and credible?
Financial literacy is a journey. One way to affirm credibility is to compare it to your financial situation. Always have a backup resource for validation.
How can the average entrepreneur improve their financial literacy?
This is an important and critical question that I will answer in an alternative, more direct way. I strongly recommend these three words as ways to improve personal and business financial literacy:
Start with opening your mail and being curious about the words that you do not understand in your statements. Call the service number and ask the person to explain what these words mean regarding your account. It sounds simple, but it truly is a free lesson that benefits your personal or professional situation. The information is memorable because the asker is learning even when configuring the question. (Do not forget your tax person or accountant. They are your resources).
Humility helps your behavior when you ask a question, and you partially know the answer, but you ask questions to attain mastery.
Lastly, you must be disciplined and determined when you call the service line or account representative when you do not fully understand a financial term. Do not feel like you are wasting their time asking basic questions. If they have chosen to do business, service your needs, or hold your money, you are only using your mutual rights within the relationship.
What is the best way to stay abreast of COVID relief funds and resources in the Inland Empire area?
Contact the Black Cooperative Investment Fund (BCIF) at www.bcifund.org, 310-904-6336, reach out to our partner, AmPac Business Capital at www.ampac.com, or visit Venturize: https://venturize.org/—Small Business Majority’s free online resource hub for small business owners who need help accessing tools and resources to grow their businesses.
City of Ontario adopts updated Housing Element to help address housing – and affordability – crisis across Southern California
The Ontario City Council Tuesday night adopted an aggressive plan that would position the City to lead the Inland Empire in addressing the housing crisis.
Ontario’s updated Housing Element lays out a series of planning and zoning changes that would allow the building of more than 20,000 housing units over an eight-year period ending in October 2029, including nearly 9,000 units for low-income and very low-income residents.
Those numbers represent Ontario’s allocation under the state-mandated Regional Housing Needs Assessment (RHNA) – a process governed by the state Department of Housing and Community Development (HCD) and updated every eight years to address the housing shortage across California.
No Inland Empire city had a higher RHNA allocation than Ontario – testament to the City’s standing as one of the most dynamic economic and population centers in Southern California. Across the six-county SoCal region, in fact, only three cities – Los Angeles, Long Beach and Irvine – had higher allocations.
“Our updated Housing Element reflects the City Council’s commitment to Ontario as a complete community and a destination for individuals and families looking for a better quality of life,” said Mayor Paul S. Leon.
Under state guidelines, Housing Elements do not require a city to build their allocated number of housing units. That is ultimately determined by market forces, point-in-time demand and the ability of homebuilders themselves to meet those needs at the appropriate price points.
What HCD does require is that cities establish a framework that would allow that level of production if those other factors were met.
The updated Housing Element approved by Ontario’s City Council was built around several priorities:
- Addressing the needs of existing Ontario residents for quality and affordable housing at all income levels.
- Ensuring that the city’s housing stock matches the type, price and tenure needed by Ontario’s residents and workforce.
- Creating, preserving and (where needed) improving the quality and identity of Ontario’s distinct neighborhoods.
- Assisting residents of all ages and backgrounds to allow them to live, work and enjoy themselves and their families in Ontario.
- Obtaining financing for affordable housing as tax credits become more competitive and make it more difficult to obtain financing for affordable housing.
The plan also takes into account job growth and the City’s commitment to supporting business and employment opportunities. During Tuesday’s meeting, the Council certified the Environmental Impact Report for the South Ontario Logistics Center, which will create hundreds of new jobs on more than 200 acres of commercial and industrial space.
Other major economic development efforts in the City include the Downtown Renaissance, which, when completed, will include nearly 600 new residential units, 13,000 square feet of commercial space, a 450-space parking structure, breweries and tasting rooms, and college satellite campuses.
“The vision and leadership of our Council and City staff have made Ontario a model for business growth, career opportunities and livability. The future has never been brighter,” said Mayor pro Tem Alan D. Wapner.
Business2 months ago
Business Activity Continues To Surge In The Inland Empire; Growth Will Moderate Now That Region Has Surpassed Pre-Pandemic Levels
Business2 months ago
Second Annual Inland Empire Education & Workforce Summit Hosts Sold-Out Event to Discuss Education’s Role in Post-Pandemic Job Recovery
Career & Workplace2 weeks ago
City of San Bernardino Names Nathan Freeman as Director of Community and Economic Development
Education2 months ago
Defining Moment: Match Day 2022 for California University of Science and Medicine Inaugural Class
Business2 months ago
Sunitha Reddy, Prime Healthcare VP of Operations, Named to Modern Healthcare’s Top Emerging Leaders List
Education2 months ago
Think Together’s Hernan Sanchez Named Among 2022 Next Generation of Afterschool Leaders by National Afterschool Association