IP Enforcement Program: Marshaling Intellectual Property Assets

Registering Intellectual Property Assets to Combat Knockoffs and Infringement

This is the third installment of a 7-part series providing comprehensive analysis of designing, implementing, and optimizing an intellectual property (IP) enforcement program that stops loss of market share and profits due to knockoffs, piracy, and other forms of IP infringement. This program stresses the importance of intellectual property rights in protecting market share.

At Step 1, we discussed quantifying the harm (monetary or otherwise) currently being suffered to establish a baseline against which the IP-enforcement program can be measured. In Step 2, we will marshal all of the intellectual property assets and potentially register new IP to be used offensively to stop the knockoffs and infringements.

Before we discuss how to identify and register IP assets, here’s a short summary of the entire series, which provides step-by-step guidance on developing and implementing an IP-enforcement program:

Step 1: Identifying and Quantifying Losses Caused by Knockoffs and Infringement

Step 2: Marshaling Intellectual Property Assets to Combat Knockoffs and Infringement

Step 3: Designing the IP-Enforcement Program to Increase Market Share by Stopping Knockoffs and Infringement

Step 4: Implementing the IP-Enforcement Program

Step 5: Optimizing the IP-Enforcement Program with Metrics

Step 6: Growing Future Market Share through Proactive IP Strategy

See our initial post, Importance of Intellectual Property Rights: Increasing Market Share Through Stopping Knockoffs and Infringements for a complete overview of the series.

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Trademarks, Copyrights, Patents, Domain Names, and Other Intellectual Property (IP)

The goal of Step 2 is to develop intellectual property (IP) assets to thwart knockoffs and infringement as well as competitors. The major types of intellectual property are:

Trademarks — Trademarks function as source identifiers such as McDonalds® (products) and Netflix® (services) that connect a product or service to the public through the goodwill associated with the trademark.

Patents — A patent is an intellectual property right that is granted by the USPTO (United States Patent and Trademark Office) to an inventor and protects the inventor’s invention by the right to control who uses, makes, offers for sale, and sells the invention covered by the patent.

Copyrights —Copyrights protect the creative expression of an idea and commonly are used to protect creative works such as photographs, books, website copy, software, novels, and screenplays.

Domain Name Registrations — Domain name registrations provide the registrant with use of a URL (www.mcdonalds.com) to host a website, email server, and other functions. Domain name registrations can be stolen and squatted upon by unscrupulous third parties.

This is not an exhaustive list of the different types of IP. See our post on 11 Different Forms of Intellectual Property for a more detailed discussion.

Registering Current IP

In Step 2, the various trademarks, patents, copyrights, and domain name registrations are registered with the appropriate administrative entity such as the U.S. Patent and Trademark Office, U.S. Copyright Office, and a domain registrar. In most cases, both copyrights and patents require registration before assertion. Common law trademark rights can be asserted without a federal registration. However, federal registration provides additional benefits that usually justify the cost and effort. Additional information on trademark registration and patent registration can be found at our posts What’s the Trademark Registration Process and What Does It Cost? and Have an Invention – What are the Next Steps to get a Patent?

Chain of Title, Ownership, and IP Holding Companies

Before moving to the next step, it is important to consider the ownership strategy of the IP assets. IP is commonly owned by the operating company, which makes assertion of the rights relatively straight forward—the operating company is owner plaintiff in the enforcement action. One concern with this approach is that operating companies can incur liability to third parties due to their commercial operations. To safeguard IP and other intangible rights, some companies will own the rights in a holding company. In this situation, the holding company may be the plaintiff or co-plaintiff. The holding company typically licenses the IP rights to the operating company for use.

Regardless of the ownership decision, care should be taken to ensure that the ownership of each IP asset is owned by the proper entity before assertion. A best practice here is to trace the chain of title of each asset from filing through the present, paying particular attention to the records at the USPTO and Copyright Office. Even though filing of an assignment for a patent, trademark, or copyright may not technically be required, the IP-enforcement program will flow more smoothly if the governmental records match the rights asserted.

Where is Infringement Occurring Now and Likely in the Future?

As a check on the registering IP step, we should consider where infringement is currently occurring and also where infringement is likely to move in the future if the program is successful. Are the current IP assets sufficient to thwart the bad actors or are there holes that still remain? How about new types of infringement? Did we consider where an infringer or competitor will need to go in the future to steal market share?

Registering Strategic New IP

Based on this analysis, we are in position to develop and register additional intellectual property assets. As discussed above, trademarks protect brands and other source identifiers. Copyrights protect the creative expression of ideas. Patents protect inventions such as machines and systems. Ideally, multiple forms of IP can be combined to create powerful moats against infringement and competition.

For example, in the case of a software product, a business can obtain a patent on the process carried out by the software program. This will empower the patent owner to prevent others from making, using, offering for sale, or selling a competing software product covered by the patent. The business can also establish a strong brand associated with the product to develop goodwill over time through a trademark, which can be used to stop infringers and competitors from using a confusingly similar name or brand. The source code of the software can be registered as a copyright to prevent third parties from copying the code. Finally, the business can use a software licensing agreement to establish boundaries for the authorized use of the software such as preventing reverse engineering of the code.

Next Step – Designing the IP-Enforcement Program to Increase Market Share by Stopping Knockoffs and Infringement

At this point, we have identified the various intellectual property assets and registered new ones to defeat infringers and protect market share. We have also analyzed the potential for future infringements as well as creating moats to fend off competitors in the future. We are now ready to begin the initial design of the IP-enforcement program. This will involve analyzing the steps required to identify the infringement and infringers, an initial model for a flow of actions to stop the infringement, and the ROI and other goals for the program. See IP-Enforcement Programs: Designing the IP-Enforcement Program to Increase Market Share by Stopping Knockoffs and Infringement for our discussion of the next step in the process.

Coming Soon -- Access the E-Book “Increasing Market Share Through Stopping Knockoffs and Infringement”

We have condensed the six steps into a graphical E-Book that provides a summary of developing effective IP Enforcement Programs along with tips, techniques, frequently asked questions, and mistakes to avoid. You can access a complimentary copy of the E-Book by clicking here.

You may also be interested in the following posts on the importance of intellectual property in enforcement programs:

For more information about IP-enforcement and anti-counterfeiting programs, see our Anti-Counterfeiting and Luxury Brand pages. You can access additional information on our Brand Protection Strategies and Resources page.

About the Author

Through prosecuting over 1,000 intellectual property (IP) enforcement actions, Darin M. Klemchuk advises clients on proactive IP and an anti-counterfeiting programs to stop diverted sales, market place erosion, and other harms faced by businesses. You can learn more about Darin’s practice and view his curriculum vitae at his bio page. If you want to send Darin a message, then visit our contact page.

This post has been provided for informational purposes only and is not intended and should not be construed to constitute legal advice. Please consult your attorneys in connection with any fact-specific situation under federal law and the applicable state or local laws that may impose additional obligations on you and your company. © 2022 Klemchuk LLP

IP-Enforcement Programs: Marshaling Intellectual Property Assets to Combat Knockoffs and Infringement