Power of Intellectual Capital

Copyright and Intellectual Property in The Idea Economy

The first hundred years of American economic history were structured around a quest to create the largest, most cost-effective agricultural and farming operations. The instruments of economic growth were considered to consist solely of land, labor, and capital. The second century brought about the industrial revolution and our focus changed to factory production, automation, and efficiency. Today, we are in the information age and our knowledge-based economy thrives on the influx of innovation and creativity. The currency of today is new ideas-and that currency is enhanced and exchanged by creating strong business and product brand identities.

The legal protection of intellectual property and capital such as new inventions, successful business methods, and brand identities is replacing land, manufacturing facilities, and other physical assets as the predominant instruments of wealth creation. With lower structural barriers to competition, maintaining a competitive edge in an “idea economy” requires effectively guarding your intellectual property through patent, trademark, and copyright law. At John Rizvi, P.A., our practice is limited to intellectual property matters. We are The Idea Attorneys®

Being First is No Longer Enough

Traditionally, the first company to capitalize on a new idea enjoyed a lead-time advantage in setting manufacturing, marketing, and distribution channels in place. This head start often provided the originator of a new product or service with the opportunity to perfect commercial development of the idea, cultivate brand recognition, and begin building consumer loyalty.

It is prudent to capitalize on the first-to-market advantage. However, many inexperienced businesses and entrepreneurs fail to recognize that the advantages of being first are only temporary. Success is an open invitation to the competition. Without adequate legal protection of your intellectual property, it is only a matter of time before competitors will enter your market, steal your idea, and drive down prices.

Expected Lead Time Advantage

The amount of time an innovator has before competitors enter the field depends upon the nature of the new idea and the barriers to entry. Without patent protection for the technology or novel business methods developed, an innovator’s lead-time advantage is severely limited. For example, it may be possible for a competitor to reverse-engineer or copy an unprotected Internet-based business method within a matter of days. Traditional manufacturing-based inventions, on the other hand, may take longer to duplicate due to the need for special moldings, parts, machinery, and equipment.

In either case, the first-to-market advantage is short-lived. To make matters worse, competitors entering a market after the initial product release are often able to improve upon the original concept by studying the development and marketing mistakes made by the first-entrant in the field.

Strong Protection For Business Names and Brand Identities

The value of your brand, or its brand equity, continuously increases as your products or services gain recognition and consumer loyalty. Over 90% of Yahoo!’s market capitalization is based on their brand equity. Other companies including BMW, Nike, Apple, and Ikea all have brand equity valuations that exceed 70% of the company’s market value. Not surprisingly, the trademark rights to Coca-Cola have been valued at over $80 billion dollars. By obtaining adequate trademark protection on their brand identities, these companies can prevent others from using their mark without permission.

Inexperienced entrepreneurs often overlook the importance of properly securing trademark rights during the early stages of business development. Mistakes at these early stages of choosing and protecting names can be very costly.

Conclusion

In an idea-based competitive business environment, the potential success of a business lies to a great extent in its ability to secure exclusive rights to creative and innovative business methods and technology, and retain rights to its unique brand identity. As companies with similar technology and business methods compete to “outspend and under-price” each other, proprietary legal protection has become a necessity.

The recent slow-down in the venture funding environment is evidence of the realization that a great idea without any barriers to entry is an open invitation for competition. Today, savvy investors and venture capitalists are asking for start-ups to demonstrate an ability to maintain their competitive advantages. Being first in the market with a new idea and a unique business identity is an extraordinary accomplishment. It is important, however, to protect your intellectual property to prevent copycat competitors from stealing your innovative ideas.

Board Certified Attorney

Florida Bar Board Certified Intellectual Property Attorney

Under Florida law, only lawyers that have been Board Certified as experts are legally permitted to identify themselves as specialists or experts in an area of law. Board Certification was established to assist consumers in selecting specialists in various areas of law.

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