Entrepreneurship, Second Edition

Chapter 13. INTELLECTUAL PROPERTY

Halloween pumpkin leaf bags. (Source: Melissa King/iStockphoto)

Entrepreneurship and intellectual property (IP) go hand in hand. Intellectual property refers to creations of the mind, such as inventions; literary and artistic works; and symbols, names, images, and designs used in commerce. Business intellectual property includes patents, trade secrets, trademarks, and copyrights.

Patents protect inventions. Trade secrets cover proprietary information, whether it's in the form of a recipe, a customer list, or a unique way of conducting business. Trademarks are key in differentiating a business's products and services from those of others as well as in franchising arrangements. Copyrights protect authors' original creations, including literary, musical, artistic, software, and other intellectual works.

Investors need to be assured not only that you've considered IP but also that you've implemented a plan to protect your company's crown jewels. And because IP protection costs money, you need to budget for and manage it.

This chapter is written by Kirk Teska and Joseph S. Iandiorio.

In a survey we conducted, nearly 90% of venture or extremely important in making an investment capital firms in New England ranked IP as important decision.

There are few guarantees in the area of IP. Not every patent application is granted; a name you've chosen for your ...