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The Oval Table
The Oval Table

Episode 36 · 4 months ago

Bruce Needham - Are You Ignoring One Of Your Most Valuable Assets?

ABOUT THIS EPISODE

Patents, Copyrights, Intellectual Property. If your eyes are glazing over, you really need to listen to this episode. You’re going to get thousands of dollars of consulting on why this can be your most valuable asset that you don’t own.

Bruce Needham is a Partner at Kunzler, Bean and Adamson specializing in Trademark and Intellectual Property Law. We discuss what is included in Intellectual Property, how valuable it is, and the fact that once you patent or copyright it, IT’S SALEABLE. In fact, for many companies, that’s the part that makes up most of it’s saleable value. Think of it: you can monetize your ideas and processes as well as your products, infrastructure, and customer base. Bruce takes us through the steps. #intellectualproperty #patent #copyright #trademark #domain #theovaltable #bruceneedham #carlwalsh #douglasbowers

Contact Information for Bruce: 

KBA.law

BNeedham@KBA.law

801-994-4646

Most of the value of companies is intellectual property, and so if you don't protect it, if you don't take the right steps to protect your intellectual property, you're creating a situation where people can steal it from you and people can just go out and compete with you legally. And, for example, if you have some invention that that kind of thing, you never get it patented. Well, if you don't patent with any year in the United States, then it just goes into the public domain and anybody from competeing and and so people are missing out on a great opportunity to build the value of their company if they're neglecting their intellectual property. Hello everyone, him Rishi cats, and welcome to the Oval Table, where we discuss all things related to helping those who live and work within your business how to survive, thrive, avoid pitfalls, have more fun and become successful faster. Getting advice and input from someone outside of Your Business can make a big difference, and that's what we seek to do for you each and every week here at the oval table. We believe that every voice matters and we want to model how that works. Often, the advice that makes the difference comes from where you least expect it, we seek every week to provide a lens for a different way to do business. So much more as possible when everyone's ideas make it to the table. Let me introduce you to our co hosts, Doug Bowers and Carl Walsh. Welcome to our oval table today, Carl, and I thought we would do something a little different. We want to bring you a subject matter expert to have him view and introduction to something we think is not only very important but often overlooked by those who operate in the closely held space. Today we're going to be talking about intellectual property. Inside a business, there are essentially three kinds of property. Real property, which are the buildings and the things that are attached to the land. Tangible property, something you can touch but will but move at will, things such as machinery, equipment and, oddly enough, elevators. Why elevators, you ask? Because they are not attached to the ground even though they are inside the building. Then there is an intellectual property, those things that exist but you can't touch them, are not equipment and are not attached to the ground. Examples are copyrights, trademarks, patents, and sometimes we find nearly every business ignores and should not, and it's easy to overlook the value of intellectual property. But in some businesses the law artist component of value is the intellectual property. Today we bring you an attorney I have worked with for over thirteen years. Before any of my content was released to the public, I worked with him and acted on his wise council. We consider him an important member of our team here at the oval table. A good ip attorney needs to have a diverse background to not only be a good attorney but also to understand the technical aspects of what he is trying to protect. Bruce, our Needham, is a partner with Kuncilor being and Amandson. Is a registered patent attorney with a strong technical background, with more than fifteen years of engineering experience prior to law school. Is a licensed professional engineer, which is fairly rare. His clients range from fortune five hundreds to enter our preneurs. His practice focuses on patents, trademarks, copyrights and licensing. Bruce earned his bachelor of science degree and all Google Engineering from Brigham Young...

University and an MS in electrical engineering from the graduate Georgia Institute of Technology. Bruce graduated from S J Queeney College of Law at the University of Utah in two thousand five. He joined K B and a in the spring of two thousand and three. However, prior to his legal work, bruce joined Rockwell International in nine as a designer of the power system for the International Space Station, focusing on power electronics system design and analytical modeling. During his time at Rockwell he developed working models of the overall space station power system, developed a method for determining power system stability and published several papers on the topic. Bruce, after that joined spectrum engineers as a project engineer. N It was made a principle in the firm. In his duties include electrical, electronic and lighting design and project management for construction projects. We go through his work experience so you will know the depth of his background and what it takes to be a good ip attorney. With all that, Carl and I welcome to our old table Bruce, our needum. Thank you very much. Why don't we start with a discussion of what is intellectual property and with the various kinds of it? So there are a few different types and one thing to keep in mind is that if you look at the comparison of intellectual property versus real physical property. Both of them can be owned, both can be bought and sold, both can be licensed and you can both you can exclude used by others and both can be passed onto their errors. And so in every sense of the word, intellectual property is property, and so that that's an important thing to keep in mind. So what are the different types of the intellectual property? One type that a lot of people think of our patents. Patents are widgets and gadgets and and also processes and things like that, something that is invented. Another very, very important part of intellectual property. Another type are trademarks. Well, not every company has a patent or patentable material. Pretty much every company has a trademark. The trademark is anything that identifies a source of goods or services, and so you think of a company, name, company logo. You can also have other things such as sound or particular color. For example, if you see pink insulation, you know it's from Allen's corning, and certain logos on cars and things like that. Those are all trademarks, and so when you see a trademark you know where the source of that product or services from. And another important aspect of intellectual property is copyrights. Copyrights are given to anything that is created, any expression of in the form of like books or paintings or sound recordings, even software code, and so when you have a copyright on something, it prevents other people from copying once you create something, anything that would fall under the realm of copyrights, you automatically have a copyright on that. But which you don't have is a federally registered copyright, and we can talk about that later as far as what the what that means, but federally registered copyright gives you additional rights and and it's very important in certain circumstances. Other forms of intellectual property, for our trade secrets, for example. You know a lot of people have heard about the all of the secret spices and everything in the chicken of KFC or the formula...

...for Coca Cola. Those are supposed to be supposedly trade secrets, and but there's many other things that are afflickable to business or trade secrets, things like customer lists and methods of manufacturing, and those are things that, if treated properly, if treated like a secret, it treated like a treat secret, then they there are certain rights associated with those and then it kind of a new entry to intellectual property our internet domain names. That's an also very important form of intellectual property. So those are the primary types of intellectual property on the Internet side. The domain names. That's interesting. What when someone, say, hacks an email account and they start sending out emails under that person's account? Is that a legal issue or are you just, you know, out of luck? That's certainly a legal issue in a way. It's intellectual property associated, but it's more in the area of fraud kind of thing. The main thing that's kind of intellectual property was is if you buy a particular domain name and the shorter it is, the more valuable it is. I mean there's some of them, like three letter domain names can be very valuable and some domain names are worth millions of dollars. That's actually a case. I'm talking about is where a person has purchased a dome main name, that's what they send their email under and it gets hacked and now that person is sending email out under your name, under your domain, and that can be a problem and there are ways to deal with that. And that also kind of falls under under trademark claw because if you're using a particular trademark, and what do you call what we call cyber squatter goes in and buys the trademark, buy or not the trademark, buys the domain name and then start using it. And this happened in the early days of the Internet when, you know, somebody would buy Ford Dot Com and then start using it for their things and then try to sell it to the company. Well, now there are rules against that and there's a proceeding that we can go through to capture that domain name back and it's an arbitration proceeding and it's in the neighborhood of, you know, five to seven thousand dollars to go through that process. And so oftentimes the cyber squatters will buy a domain name and then they wait for somebody to want to use that and then they'll try to sell it to you and they know that you know if it's they know about how much it's going to cost to get it back. Sometimes they will it's cheaper to just pay them the two thousand dollars or three thousand dollars to buy that from them because they legally purchased it. But if you're using it as a trademark can go through and you take it from them, and so they know that and so there they have their own strategies on kind of what price point is before they just kind of give up and it is possible to get the domain name back. What about somebody copies your product? They had a client once where we were trying to develop some uniqueness of the product and get copied in six months anyway. So what is the point? It depends on the type of products. If it's something that is falls in the realm of copyrights, then you can certainly go after them for copyright infringement. If they're just, you know, copying, let's say an art piece or if they lift a section of text from a book or something like that. If it's some kind of a gadget and they're copying that, then that would fall under the realm of patents, and if you file the patent and you have a patent on that, then you have rights to go after them. If you don't have a patent on it, than it's fair game. And so it really kind of...

...depends on the nature of the copying as to whether it falls under copyrights or patterns. Is there any recourse on that situation. I have a friend in New York that I won't go into the specifics. I don't want to, you know, triple over any legal issues here. But he created something, a household item, designed it, created it. He got a phone call from an attorney who said, you know, I work for this company, we think we'd like to buy your product. Could you send us the design and the spects? And of course he did. You know, he was working up the money to get it patented, because it isn't an expensive process. Next thing he knew that company had filed a patent on his product, that that he developed. Is there any recourse for something in today's world? There is, since the American Events Act came along back in I think it was two thousand twelve, I can't remember the exact data. That it's been around for quite a while now. There is recourse on that. So the first thing that this person would have to do to go out and first of all file a patent application. That's important part of it. Then if they can show that the other person, that the other party, stole that from them, that they had the opportunity and they actually took it from them, there are laws now on the books that they could get the patent pack and essentially canceled the other patent and and go through with their patent. But there is recourse for that and that's something that's one of the great features of the American Events Act. I'm sure he'd like to go after the the attorney to who committed from absolutely and you know, I've heard of that happening and I've heard it happen of happening and I had one client where that happened to in China and that's a little tougher. Yeah, of course, in China. I know New York is a shark tank and people have to be really, really careful and guard their property very that what I would recommend to somebody in that situation is first and foremost to file a patent application first, and there are different forms of the patent application. There are two types, primarily there's a non provisional patent application and there's a provisional patent application. A provisional patent application is kind of a placeholder and so once you file the provisional then you have to follow that up within one year with the full non provisional application. Now provisional application can be anything from inventor's notes all the way up to a full patent application. For some companies and universities that I work with we file a provisional application, that is a full blown patent application, and the reason that they do that is because if there's anything that comes along, any improvements to the invention within the next year, they we can update the patent and then file that non provisional with those approvements. But oftentimes what happens is I get to the end of the year and they say, okay, there's nothing new, and so we just refiled the same patent as non provisional application. Now, on the other end of the spectrum, you could file inventor's notes and slap the cover sheet on it and file that for very cheat, which I believe he did. As a matter of fact, he was in the process of going after a patent. Yeah, and so, for example, and we do that like for a what's called a small entity, the costs would be a hundred and fifty dollar file length fee plus if you have some somebody like me help you, there's a little bit of money there. If you're qualifies a micro entity, which a lot of people would, and that's if they have been an inventor enter on more than four other applications, so...

...they're kind of a novice in this process, and also that they meet the income guidelines of making less than about two hundred and six thousand a year and not under an obligation to assign it to some of the company. Then they could qualify as a micro entity and all of the filing fees are half what they are as a small entity, and so that's something that we want to look at. But the thing that is important, though, is to understand that a provisional patent application falls under the same laws as non provisional application court and so it has to stand up to the same scrutiny. So if it's inventors note, the chances of that holding up in court are pretty low. It depends on how good of a job and that kind of the thing is. So you know, sometimes what we will do is, if somebody really wants to do that, maybe we'll take a look at it and make some suggestions and then they can put that together. But they have a pretty comprehensive right up and some good figures and things like that. Yeah, I mean there's there's a chance fairly good chance that'll be okay. One of the things that we do is we put together a provisional application and we put together some claims and which are kind of really the heart and soul of the patent. I mean that's what is litigated. Then we put together some drawings, and they might be informal, and they will put together the detailed description section of the application, and that's really the most important part. And we do kind of a half now half layer approach, and so we'll we'll charge about half of that. We use the same kind of methods that we would use for a full, uh, non provisional application and then that way that we're able to offer something that's going to get pretty good have pretty good protection for a lot less and and then the inventor can kind of move forward to have something that looks like a patent. You know, one of the important things of the patent is that a lot of people think the patents are really good for buying an expensive lawsuit. Well, we find that that's really not the major use of a patent application. Probably the most common use of a patent application is it's an asset for the company and it's also used for going out and getting funding. And so if you have a good quality patent application, a good provisional you can go out and you can show it to investors and then you know that aids a lot in getting funding. In fact, as part of our business we work we have a corporate side. They do a lot of mergers and acquisitions and sometimes we'll be asked to evaluate patent portfolios of companies that are speaking funding, and I can tell you that for the most part, if there is no analectical property, if there are no patents in that kind of thing, those companies are really not considered H and so. But if they have good, solid patent or or patent portfolio, then they have a lot higher chance of getting fund right, and you hear that all the time on the TV show shark tank. You need to have proprietary property that that nobody else can infringe upon. Listen write about now. I think some of our listeners are probably thinking, I need this guy. How do I contact him? They'll do it again at the end, but how do people contact you? Well, there's a couple of different ways. You could go to our website and find me there, K B A dot law. You could also send me an email at b need him at Kba dot law, and that's B n e e d h a m at K B A dot l a w or you can call our office eight Oh one, six, four, six. Al Right, thanks. Let's say I'm a mostly held...

...business and I've been operating for a while in a Pacific area that I'm pretty good at, and I've figured out that there is a better way to do something. You know what other people do. So I can either be smart and say maybe I should call be what's going on with this, or I can be dumb and say everybody knows that it's nothing special and it's just routine thing. What should a smart co operator do at that point? Probably first and foremost is to contact somebody like me and just to fixplore the opportunities to protect the inventions and the other proprietary items in the company, and so we offer a free initial consultation of half an hour. I think a lot of attorneys do that as well. But the key is to figure out what you can protect and what are the different ways to protect something. So if you have some kind of proprietary process or or something like that that potentially could be a patent application, or if you especially if you've got a product that is unique that's potentially patentable, keep in mind that if you disclose that to the public, you immediately lose all foreign patent filing rights and you have one year to file in the United States. So it's really important to keep that secret and to get the patent going on it. If you have discourse that are sold it, to get that patent, file within a year if you just want to file in the United States. But not everything is patentable. I mean there's a lot of things, a lot of kind of business, what we're called business methods, that are not patentable. Unfortunately, that's how it is in the patent system. And so okay, what do you do in that kind of situation? And what we recommend are some other techniques. First of all, pretty much every business is going to have a trademark and trademarks are incredibly valuable. I mean, for example, if you look at Coca Cola, I just looked up yesterday, their value, their total stock value right now is about forty four point five billion dollars. Of that, of those assets, seventy eight percent of Coca Cola's assets are intangible property in the form of just goodwill and trademarks. Having good trademarks that you can protect, that you can get through the trademark office, is very valuable. I mean, if you think about it, if you have a company naming, you put all this time and advertising and everything into building up the value of that company and you go to sell that company, really the vehicle for that is the name of the company and that's a trademark, and so if you haven't got it protected, somebody else could come along and use that and potentially take that away. It's very destructive to have to go change names mid stream, and so that's an important aspect, is to get the trademarks covered. Now let's say that you do have some kind of a business method or something you can't patent that that you can protect your materials, and so any kind of materials you create, like teaching materials and those kind of things, it's important to get those federally registered copyright on those things. Anything that you'RE gonna put out there and make money on, you should do the federal registration for copyrights. Now what why do that? Well, if anybody infringes your copyright, the first thing you have to do to go after them is you have to go get the federally registered Copyright Anyway, and at that point, if you do it kind of after the fact, it's a lot more expensive. You're talking filing fees of like dollars up front or a copyright for a federal registration, but now you're talking seven D dollars for the filing fees if you have...

...to get it afterwards and to put a rush on it to get it for litigation, and then at the same time you've lost the ability to go after them for certain types of damages. And so if you get the federal copyright first, you can go after them for what are called statutory damages. Statutory damages are damages that are built right into the statute and so they're very easy and they're designed as punishment, and it's the same thing with trademarks. They also have statutory damages, and so it's very important to get the federal registration first so that you can't go after them for statutory damages. If not, if you have to go after them APP after the fact, after they've already infringed and you don't have the federal registration, then what you have to do is just you have to prove actual damages and a lot of times it's very difficult and so oftentimes you just kind of get them to stop. It's very important to do the copyright registration. Another thing is that if you have some kind of a business method, you've got a business where you've gotten training and training other people and that kind of thing, you oftentimes have employees, and so the employees are often the ones who are going to break out and leave your company and go out and compete with you because they they're pretty to all of the information, and so it's very important to have a good employer agreement, and especially if they are independent contractors. You think about an independent contractor, if they go out and create content for you. If you don't have an independent contractor agreement that transfers the intellectrical property to you, they own the intellectric property, and so that's very important to have. That is to say that you pay somebody to build a website for you, if you don't have that intellectual property right, I mean that independent contractor agreement, then they own the website. So if you get that in place, and it's very easy to do, it's it's not that tough to do and then that forces that that you know, says in the agreement that you own the intellectual properties that they create, and so that's also important for employer employee agreements when you first hire somebody, to make sure that there's something in there that transfers their work product to you, any intellectual property that they create. It's also important to have a non disclosure in there and the noncompete and now noncompetes. Depending upon the state there are different restrictions and that kind of thing, but they are for the most part enforceable and so, but typically only for like a period of time, like maybe two years. But if you put those things into place, then you have a lot better ability to go after these rogue and easy to break away and a lot of compee with you. Would you say that, if you're going to say you you mentioned having a website built and of course small businesses are doing that all the all the time. They don't have that. They don't have the the expertise but within their companies. So yes, they're going to go out to an outside contractor would you say that any reputable contractor would supply you with that kind of form, that kind of agreement probably not, probably not okay. And the thing is is the most reputable companies are not going to enforce that. They don't care. I mean, they're building it for you and they don't have a reputation to uphold in that kind of thing. The problem comes in when you want to sell a company, you want to sell those assets and you can't prove ownership of the website, and so it's something to make sure that they provide or to out and get an independent contract or agreement. and which are the kind of things,...

...the kind of brings that we have and that we could help people ask. And that really just continues on with the theme of business owner. The onus is on you to get these things going and make sure that you're protected from unscrupulous people. And not just that, but also, as as you say, Bruce, that people need to by creating the copyright, trademark, patent, whatever, you're creating a tangible product that can be sold. I'm not sure people understand that. And you know a couple of statistics. Back in two twelve there was a government study and they found that the companies that focus on in electrical property make more per employee. Wow, at that time, five point one trillion, or thirty or four point of the U S grow domestic product is attributable to Ip intensive industries and sixty point seven of all the exports, or seven hundred and seventy five billion, are from IP intensive industries. I mean it's it's something that if you create, if you focus on intellectual property, the company is going to be more valuable, employees get paid more typically, you get better quality employees and it's something to consider. It back when they had factories and that kind of thing and allows easy to own the factories and easy to own those physical assets. But the thing is is that companies now, most of the value of companies is intellectual property, and so if you don't protect it, if you don't take the right steps to protect your intellectual property, you're creating a situation where people can steal it from me and people can just go out and compete with you legally. And example, if you don't, if you have some invention, that that kind of thing, you never get a patented well after, if you don't patent within a year in the United States, then it just goes into the public domain and anybody can compete with you. People are missing out on a great opportunity to build the value of their company if they're neglecting their inelectual property. We have here for the closely held or manager, we have two operations. One needs to be always aware of. On the one hand, you're building a business to sell it. So if you're building a business to sell it, then you have to have title to the assets that you're going to sell. Absolutely, certainly the name, certainly how you do things. uh, those types of things are all in your area of expertise. So that that's one consideration. The other consideration is that if you're operating and you've you've designed something special, you want to be protected from somebody else ripping you off. So your profitability of the business is dependent upon protecting those assets. I mean, just like you would not walk away from a factory and not lock it up at night, you wouldn't want to not lock up your intellectual property in the same way. I mean it's a different formatting, it's a different skill set, but it's still the same concept. You're just not going to walk away with it and not to protect it your work. Then it does two things. It adds to the ultimate sale value of the business and lots of times when when we look at people, they haven't done any of this kind of thing. They haven't protected their their assets out well, their profitability is it is not what it could be. Their operations or not what it could be. So then when they go to sell the business they have problems and...

...because it's not worth as much as as they thought it would be. And that P an intellectual property has to get protected right from the get go and a lot of people want to kind of neglect that and try to do it later and then they find that it's too late. So really what these business owners should be doing is they ought to be doing an intellectual property audit every year where they actually go through their processes, they go through their technologies and what they do and use, and they should say, do we have something here that should be protected? Yes, and and be calling you to to run that by you as part part of that audit process. And every year they should be looking at what what has changed from the year before? Well, we're using the name slightly differently, we're we've made the products slightly differently, we have a different opportunity to protect that property. Alright, gentlemen, well, it's it's it's time for us to wrap this up. UH, Bruce, is is there something that we should have asked you that we we haven't that's really important for outenders to understand. I think we've pretty much covered it. I think that it's it's something that the intelectrical property is something that every business needs to needs to consider very carefully when they're first starting and I think we pretty well covered it. Before you go into that, close, I wanted to get into one other aspect, and that is employee contracts the importance of they they have the intellectual property of the business and stuff squared away. Can you just talk about that quickly? Yeah, again, you know, an employee agreement is very important and we want to have something in there. You know, in addition, there's a lot of other terms and things like that which you always want to have a nondisclosure, you want to have a close in there that that the company owns the intellectual property that they create. You want to have an no compete in there if possible and Um, non circumvent where they can't like alter just, you know, try to get around your technology a little bit and compete with you in that way. Frequently in professional firms people start off, they get trained and then they think that the customers aren't there and they can take them with them when they leave. Yeah, so that becomes a substantial cost issue. Yeah, that's part of the nondisclosure agreement. Yeah, it's pretty tough to do it after the fact. It's the plays are first heard. That's when you want to really go after him and get that agreement in place. There's really not not a good way to do it retroactively. Right, if you can get them to do it. Yeah, but they might not be willing. Yeah, then then you go through the expensive and awful process of lawsuits and things like that. WHO NEEDS IT? Right? Bruce, one more time, tell us. How can people reach you, because I I think you're gonna get some phone calls here. Okay, well, yeah, first of all, my phone number is eight Oh one, nine four or six four, six Um. You can also reach me by email b need hm at kb a dot law. That's B N e e D H A M at K B A DOT l a w. You can also go to our website and find me there at KB a dot law. Excellent. Well, thank you so much for for your time today. As an attorney, your time is valuable. We do realize that. We thank you so much for the information that you've given our listeners and just remember, folks, if you have an idea, make it an asset that eventually will flow to your bottom line. It's not an expense, it's an asset. If you're enjoying this podcast, wait till you...

...get your hands on Doug's book. We Are Alpha dogs, available on Amazon and wherever books, e books and audio books are sold. Go to we are Alpha Dogs Dot Com for bonuses and downloads to help you and your company become legendary and, if you are especially adventurous while you're at it, take the dog quiz and find out more about who you really are. Well, that was very informative. I think it would be good to give you an idea of the importance of the law firm and the role it plays an I p. We don't normally do this kind of thing, but because I P is a specialized area, we think it's pretty important. When you're looking for an IP attorney, it is good to remember that one of the major principles of the old table. To solve that problem you need a depth of experience and insight. No one has all the information takes to solve a problem or take advantage of the opportunity. You've talked about that repeatedly over over time of these recordings. We suggest that you look at your business carefully and see if your intellectual property has not been recognized as important, including the employment contract. You want to find an Astorurney such as Bruce who is easy to talk to, understands the law and possesses skills particular to I p, but also has the kind of law firm that backs him up with the resources you need. One thing you should do is go to the law firm's website and look at the depth of background that your attorney has available to him or her. Ask yourself a couple of questions. Are there many attorneys there that cover all the major areas that you might need? Does the firm do litigation? The purpose of I P is to protect the value of the ideas that you have thought of. Litigation and pre litigation is just part of the process. The firm you pick needs to be able to do that with many attorneys. They need to be local. To handle your normal business eats within the state and local rules, but an I P attorney is different. It's largely a federal matter, so where the attorney is located is much less important than the quality of the attorney and the law firm. We suggest you pick carefully, since it is likely to be a long term relationship and I P is a specialized area of the law, so you need someone who handles just that area. It also helps a great deal if the person is easy to talk to and has his or her feet firmly on the ground. Bruce did offer you a free consult we encourage you to take advantage of it. What do you think, Carl? Well, I think first of all you've you've covered that part of the situation very, very nicely. Doug, I do want to take just a moment to emphasize the fact that though many people, and we did say this in the interview, and Bruce Certainly said it, many people think that getting a hadent or a copyright is well, they're just buying a very expensive trial, and that's not true. If that may happen, obviously it could, but the patent, the copyright, all of that, it's your insurance policy that no one can do what you do exactly the way you do it and put you out of business. The other thing is that really, and this too, to me, is the main reason why I get one, is that you're turning your idea, your process, into something that actually has value, so that when the day comes that someone wants to buy your company, you want to sell it or you want to leave it to your family, whatever your end game is, and you should be thinking of that endgame, uh, even though it's way off in the future, you want to...

...run your business as if you're there. Well, having the patent, having the copyright, that is what matters and that is for many companies, that is the value of the of the company. It's their processes, it's there material, it's what they do that is the real value, not the building in which it's housed. And I think one of the most important things you could do is every six months, or annually, for example, take a look and do an I p audit. Do we have any intellectual property here that needs protecting? Now, I think that's a great idea. Absolutely is a normal course. This is what we do. We sit down and we do an appeal. Yeah, certainly annually. So that's six months, even even better, because every business we've looked at seems to have its tricks and off from the largest generator profits in those businesses. Are Those tricks? People often think that everyone knows that, but in reality they don't. I mean you figured things out that other people have not, which is why you're in the business, which is hopefully why you're successful in that business. So you need to look at is there an IP situation here that I need to look at? And I'll give you an example here if you think that this stuff doesn't happen, I was working for a company early in my career. Hence my salary was very low. I was in the corporate office and I got a call from a rival company and I was offered more money than I made in a year before taxes, a good deal. More about more, if I would just lift one of the tapes for our software, one of our software backups for the in store systems, because he thought we did a pretty good job in he wanted to copy it. This is why you need, I P why you need to protect that information. Had I done that, had I actually done it, it would have put the company I worked for at a serious, I won't say disadvantage, but it certainly would have diminished its value. So these are things that happen all the time and you need to protect it. Those systems that we had, which were unique in the industry. In fact, we started this particular process. We were the first ones. That was a valuable piece of property. Wouldn't you agree with that done? I not only agree with that, but that's almost a criminal event. It would it would seem to be. Well, would have been retroducing that steel. But this same thing happens to a disgruntled employee, an employee who wants to advance and wants to do things, learns the business and you don't offer them the opportunity to expand, like we would say it around the Oval Table. You don't offer them a chance to participate in the business. And they said, well, why don't I just take what I know and go down the street? Somebody else might think it's of value, which which does happen, but I also might be able to start a business on my own and compete with this business because I can do it better. And what if I had been that disgruntled employee? I think this guy would have hit the Jackpot. The money he was offering was big for me, but it was nothing compared to the development costs it would have been a bonanza for him. This is a good example of why you need employment contracts with your employees. Some of them work for you for a while, they want to leave, take some of your customers with them, take your techniques with them and start something that competes with you and and you're your primary job of your business...

...is not to grow competitors within your business. So that's why you need that employment contract. Is Extremely important. Whether your cleaning pools or you're doing something of more important than that, you need that employment contract. So, to sum it up, I would say turn your ideas and your processes into an asset that is salable, something that you own, something that cannot legally be stolen, and protect yourself against, well, all the things that can happen in a in a company, as far as your intellectual property getting out into the world to your competitors, who will then diminish your value as a company. Protect Yourself. The cost is relatively small. Everybody thinks it's terribly expensive. Actually it's not that expensive, certainly not compared to the cost to you if you run a foul. Think of this example too, that if you're if you're a McDonald's franchise e. What are you buying? Certainly you're buying the marketing and you're buying the the set up in the research and you know all those sorts of things. But you're also buying an operating manual where you don't have to figure everything out. Somebody has already figured it out for you. That operating Manu is tremendously valuable and Oh, I'm so glad you brought that up to the founder goes into Ray kroc finding and buying over the years of eventually he completely bought out the McDonald's operation. Why? Because of the process in the kitchen, how they produced those burgers in so short a time that a person could walk up to the window. Yes, you had to walk up to the window in in those days you could walk up to the window, order your burgers and have it in seconds. That was a process that nobody else had and that's really what he bought and that film makes it really, really clear. Burgers wasn't his thing, it was the process. I recall correctly, he was a milkshake salesman. He watched how there were different stations, everybody had their their piece of the process and so that everything moved very quickly to the end product, which then went into the customer's hands very quickly. It is not too much to say that McDonald's invented. The brothers who originally owned it and started it. They invented fast food and they meant it when they said fast. Do yourself on a tremendously big favor. Protect the value in your company and at least have an IP audit and have it with somebody who actually knows what they're talking about. Save yourself a lot of headaches and improve the value or business when you go to Selham, because every business will be sold in one way or another or passed to another generation, and no one wants to buy a business where the I P is common on the street when it could have been licensed. But this is Carl Walsh, Co host of the Oval Table podcast. We appreciate your interest in our shows, so please send any comments, suggestions or questions to oval table team at Gmail Dot Com. We value opening a dialogue with our listeners, also in order to keep us able to bring in the high caliber guests you've become a cum to. Please be sure to subscribe, like, comment and share...

...episodes with friends and a substance we all hope you have a productive and inspirational week. I'm Rieschie cats, and we will see you next time at the oval table.

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