Intellectual Property (“IP”) is one of those legal terms that is often misunderstood, misidentified, and, frankly, simply missed. Many businesses don’t think of themselves as having IP, but in fact every business has and uses IP regularly. Trademarks, patents, copyrights, trade secrets – regardless the form, it is important to realize that IP protection is crucial at every stage of business. You just have to know where to look.

Business Formation

At formation, one of the most important tasks is identifying who owns the company’s IP—and that will depend on how the IP was created. Even if work was created specifically for the company’s use, that doesn’t automatically mean that the company owns the property outright.

The business may own the IP if was created by employees acting within the scope of their employment, or by independent contractors or third parties with a written “work for hire” and/or Invention Assignment Agreement.

By contrast, the business may not own the IP if it was created by founders prior to business formation, by employees acting outside the specific scope of their employment, or by independent contractors or third parties without an agreement as described above.

Business Operations

During business operations, IP issues relevant to the company’s products will inevitably arise. For example, can you obtain – and do you need – a patent, which may give you a competitive advantage but which also will require you to disclose your technology and potentially give your competitors a recipe to compete? Or are you better served by trade secret protection, which permits you to keep your technology secret but which also requires you to maintain strong confidentiality procedures and nondisclosure agreements?

How is your business providing its services? Do your sourcing agreements – with vendors, independent contractors, employees – actually provide you with the rights you need to honor the obligations you make to your customers?

Of course, the entire business brand – from the logo to packaging design – may be protected by trademark, but that protection requires continual and consistent usage in commerce by the business and/or its licensees. Obtaining a registered trademark from the U.S. Patent & Trademark Office is often only half the battle – the trademark owner must also make reasonable efforts to police infringement or risk a court considering the mark abandoned.

Many businesses also have copyright issues to address—everything from who owns the copy in marketing brochures and training materials, to text and software code for the firm website, to even the text of the company Twitter feed.

Mergers & Acquisitions

During mergers and acquisitions, one simple but true fact overrides everything: The buyer can only buy what the seller actually owns. Because of this tenet, a selling business must handle IP issues carefully, and a buying business must perform due diligence to make sure the seller really owns its IP. Conducting an IP Audit – to really dig into what IP exists and how it is being protected and utilized (or not!) – can be a very valuable exercise.

There are truly countless ways that IP pops up in the everyday operations of a business, which is why you need someone looking out for your interests. Send a message or give us a call at (314) 454-9100 when you’re ready to learn more about protecting your business’s intellectual property at every stage.


Peter Salsich AEGIS Missouri AttorneyPete Salsich III has been General Counsel for Coolfire Studios, LLC (an entertainment content creation studio), Coolfire Solutions, Inc. (a mobile software development studio focused on the military and commercial enterprise), and MedAware Solutions, Inc. (a mobile software platform company focused on the healthcare industry).  Since joining AEGIS, Pete continues to serve in this capacity.