Brian Hall - November 11, 2019 - Fractional General Counsel, Outside General Counsel Law
General Counsel – including Fractional General Counsel – serve a vital role in protecting and enhancing the value of a company. This is particularly true in the realm of intellectual property, the entire existence of which is largely dependent upon its legal protection and enforcement. General Counsel is equipped to handle the immense value of IP, whether in day-to-day business or when a conflict arises. The following are top intellectual property issues and responsibilities that face General Counsel.
Intellectual property rights exist to allow an owner to enjoy the fruits of its mental labor without others taking the benefits while doing none of the work of creation. Stealing intellectual property without investing in its creation is appealing to thieves who can gather, or copy, this protected information and profit from it. Stopping intellectual property theft requires that General Counsel are mindful of the company’s intellectual property, including patents, trademarks, copyrights and trade secrets. This means identifying, with particularly, what IP exists, oftentimes as part of a maintained IP Schedule. Thereafter, proactive monitoring, both within the four walls of the company as well as from outsiders, for such unauthorized use is the best way to mitigate against problems and the potential invalidation of such IP.
While such infringing uses can be stopped with a cease and desist letter or an injunction as part of litigation, this can still cause undesirable damage to be done and be far more costly than implementing preventative measures. Additionally, for trade secret information, once control of the information is lost, the intellectual property loses its value entirely. General Counsel must carefully draft contracts for dealings with those who have access to a company’s intellectual property to make it more difficult for this kind of theft to happen. In other situations, General Counsel must advise a company that is dealing with the intellectual property of another in handling that information so that it is not leaked, and its value is not damaged. Additionally, in the digital age, where hackers can remotely take documents and information, General Counsel can navigate the emerging cybersecurity laws to pursue litigation against the bad actor, and make sure that the company’s security systems comply with federal and state regulations for information security, as weak security itself, even without a breach, can open a company up to liability.
As much as General Counsel must go on the offensive to protect the IP rights of a company, it must also monitor the activities of the company to defend from suits from third parties claiming infringement. General Counsel can share best practices with their company, including its employees who may have a need to use third party IP, and advise on using potentially infringing material in order to protect from liability if another entity claims that an infringement of their rights has occurred. Where applicable, General Counsel can ensure the necessary permissions are obtained (e.g. licenses). Most General Counsel would agree that even if a third party claim is weak, going into avoidable litigation can rack up fees and waste valuable time. Anticipating these kinds of issues before a conflict happens is well worth the effort, especially when one can be liable for accidental infringement, so to speak, or the infringement of others that are under one’s control.
Often, the intellectual property generated by a company is going to come from the creative and inventive efforts of its employees and independent contractors. While the law places the IP rights from these endeavors in the hands of the entity ultimately funding the creative process in the case of employees, written agreements, potentially with “work for hire” language, or other assignment language is needed for independent contractors. General Counsel should generally ensure that employment agreements signing rights to the employer are properly constructed and that hiring practices clearly demonstrate an expectation of IP generation. When an idea or invention is made by an employee while on the job, a missing clause in the employment contract or a lack of clarity in the duties of the position can cause the employer to lose the value of the intellectual property into which they have invested time and money by paying that employee. Moreover, proper attention to how third-party usage of the company IP is memorialized is typically a top concern for General Counsel.
While registration is not necessary in US trademark and copyright law to have rights in intellectual property, it is highly advisable as registration confers a number of benefits that can improve the value of intellectual property. In a court of law, it strengthens an owner’s claim to the IP in question by creating a presumption of ownership. Rather than having to show evidence that one has rights in any particular IP, registering IP shifts the burden to the opposition to prove that the registrant does not, in fact, have a claim to that mark or idea. This is because the claim of ownership has already passed the scrutiny of an examiner at the proper office, and the claim is therefore supported by the registration.
Registration makes it more difficult for infringers to defend themselves, as well, as the act of registering legally puts everyone on notice of ownership. This is especially useful for trademarks, as this nationwide notice can establish one’s priority of use, allowing for a broad geographic reach for one’s claim of ownership. The benefits of registration contain a great deal of intangible value, and a prudent General Counsel will encourage a company to register its intellectual property quickly to make the most of their property. This tends to be even more important when it comes to patents and the potential for waiver of certain rights without registration.
Rights in a variety of intellectual property can prove to be some of a company’s most valuable assets. The rights to control the use of a patent, trademark or copyright is what gives intellectual property its immense value. However, these rights are not policed by the different organizations that can, for instance, provide registration for a mark, design, or idea. IP rights must be enforced through diligent monitoring of and pursuit of litigation against possible infringers. A consistent pattern of policing and infringement enforcement by a company’s General Counsel ensures that the company’s rights are protected. It may even deter people who have yet to infringe from making that mistake in the first place. Where warranted, General Counsel may have to maintain the value of IP through litigation.
Ultimately, no different than HR and compliance responsibilities, IP responsibilities require the attention of General Counsel. As such, by being mindful of the creation, protection and ultimately monetization of company IP, General Counsel can help mitigate against issues and truly derive value from what is typically one of a company’s most valuable asset classes.
To learn more about Traverse Legal’s Fractional General Counsel services – which can be catered to your company’s particular needs and budget – visit TraverseGC.
This blog post contributed, in part, by Traverse Legal Virtual Law Clerk Scott Pehoushek.
