Whether you are aware of it or not the environment your business operates in and must safely navigate through is mined with intellectual property rights. It does not matter what product your business makes or what service it provides. Your business is almost certainly using and creating IP rights regularly. If you are blind to the IP rights that surround your business you could be on a collision course for disaster.
The Very Real Danger To Small And Medium Sized Businesses Of An IP Rights Infringement Lawsuit
Most small and medium size businesses can't afford to pay for unanticipated legal expenses of $250,000 - $5,000,000. Certainly none want to. Yet that is the range of median costs that a business faces if it must fully litigate a lawsuit for allegedly infringing intellectual property rights. Do you think such a lawsuit can't or won't happen to your business? Think again.
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In fiscal year 2017 there were 10,768 intellectual property infringement lawsuits filed in the U.S. courts. Many of those lawsuits were filed against small and medium sized businesses who probably didn't know they were doing anything wrong and perhaps weren't.
Do you think you don't need to worry about IP lawsuit expenses because you have business insurance? Think again. Because of the very high costs of IP infringement lawsuits many standard business insurance policies provide no coverage or inadequate limited coverage for such lawsuits.
Do you think your business can't be sued for a product it sells that was acquired from somebody else? Think again. Businesses can be sued and are held liable for infringement because of products or services that they acquired from someone else (e.g. an original manufacturer of the product) for resale or use.
Do you think an owner can always just shut down and walk away from the business if it is sued for IP infringement? Think again. If a small or medium sized business is a corporation or LLC it is not at all uncommon for the business owners or executives who actively participate in the operating of the business to be personally sued for the IP infringement allegedly done by the business.
So one of the greatest dangers faced by any small or medium sized business, and its owners and executives who are actively involved in running the business, is an IP infringement lawsuit. The best protection against such a lawsuit is early detection and effectively addressing the IP rights issues that affect your business. This is how a business can best avoid a lawsuit to begin with and be in as strong a position as possible to end a lawsuit quickly and cost effectively.
The Danger Of Losing The Financial Value Of Your Business
Aside from the threats of IP infringement lawsuits studies have estimated that today 80% or more of the value of a business is often found in the intangible assets of the business such as its patents, trademarks, copyrights, trade secrets and goodwill. Acquiring and maximizing the value of intangible assets requires early detection and protection.
For example, the value of trademarks and copyrights can be substantially diminished by failing to register them early. Likewise, a business can lose valuable patent rights if an application is not filed on time. Failing to execute the right agreements at the right time can also result in the business losing valuable IP rights.
Any business that is concerned with attracting investors, financing, or finding a purchaser needs to be concerned about acquiring and maximizing the value of its intangible assets. This requires the early detection and protection of IP rights.
Conduct A Periodic IP Rights Audit
It should be clear from the above that being unaware about current IP rights issues affecting your business is a very dangerous thing to do: You greatly increase the risk of expensive and potentially catastrophic lawsuits. You also increase the risk of substantially reducing the financial value of your business enterprise.
Be smart: Make it a practice to take the steps to avoid catastrophically expensive IP infringement lawsuits and protect the financial value of your business through early detection and protection. If you haven't done so recently (or at all) have an IP rights audit done of your business by a qualified intellectual property professional.
U.S. patent attorney David M. Kleiman has been helping businesses succeed with IP rights for 20 years. Among the legal services offered to small and medium-sized businesses are cost-effective IP rights audits. In an IP rights audit conducted by Mr. Kleiman, he will review all aspects of your business and carefully advise you concerning important IP issues affecting the health of your business. You will learn what important steps you should be taking to strengthen your business against possible claims of infringement. You will also learn how you can effectively use intellectual property laws to protect and increase the value of your business.