How do I Protect my Intellectual Property as an Independent Contractor?
Unless you own real estate, your intellectual property (IP) is probably your business’s most valuable asset. This is especially true for freelance entrepreneurs who work for others as independent contractors. Your intellectual property sets you apart from your competitors. Furthermore, your intellectual property can be used to create passive streams of income through licensing. So every freelance contractor should know how to protect their intellectual property.
3 Steps to Protecting your IP as an Independent Contractor
Step 1: Identify your Intellectual Property
The first step in protecting your intellectual property as an independent contractor, is figuring out what you own. You can begin this process by creating a list of all your intellectual property.
What should be included on this list? Anything you’ve created or others have created for you that you use to market, sell, or deliver your product or service. This may include your logo, business name, templates, customer lists, curriculums, software code, designs, SOPs, jingles, videos, custom packaging, and slogans. Try to list everything you can think of. If your list is so long that it becomes unmanageable, consider only listing the IP that you consider the most valuable to your business.
Categorizing your IP
Next, go through the list and determine what categories each piece of IP falls under. Is it a new idea or invention (patent), a brand asset (trademark), a creative work (copyright), or confidential information (trade secret)? This can be a challenging task. Properly categorizing intellectual property requires you to consider both form and function. In other words, what is it and how are you using it.
For example, when sold as a canvas print a picture may be eligible for copyright protection. But when included in a logo, it may also be eligible for trademark protection. Software code could be copyrighted, patented, or protected as a trade secret depending on how it’s being used. And a step by step processes to completing a project could be eligible for patent protection or trade secret protection.
Remember, at this point our goal is to identify what you own and what categories of IP it might fit into. So if you’re unsure what category a piece fo IP falls into, include all possibilities for now. You can determine the best path forward later.
Who Owns Intellectual Property Created by Independent Contractors?
Pay attention, because this is important:
Generally speaking, intellectual property is owned by the person who creates it. This is a major fact to consider when it comes to determining what IP you own. If you paid someone to create something for you (like a logo), you don’t own it unless it was a work made for hire or you have a written contract with an assignment clause. Likewise, if you were hired to create something for someone else and it wasn’t a work for hire and there’s not assignment clause in your contract, you may still own it.
Long story short, review your contracts. Whether you’ve created IP for others, or hired others to create IP for you, this is an important piece of figuring out what you own.
Step 2: Prioritize and Plan
Now that you’ve identified and categorized your intellectual property, it’s time to decide how you want to protect it.
Prioritize protecting your most important IP
First, figure out what needs protection now versus what can wait. Why? Because you’re most likely a solopreneur with limited resources. You need to devote your time, treasure, and talent to the things that will contribute most to sustainable growth. Everything else must wait.
For example, let’s say I just started selling online courses and group coaching sessions. My legal budget is limited because I don’t have many customers yet. Should I pay $2-3k for a trademark to protect my new brand? Pay someone to copyright my course materials? Or, do I spend the time trying to do these things for myself? And how will those decisions impact my ability to do all the other things I need to do as a business owner? (E.g., advertise, provide services, develop new material, etc.) You have to think strategically.
So before moving forward with registering your IP, consider these questions:
- Which pieces of IP are most important to how my business currently functions?
- Which pieces of IP provide the biggest opportunity for growth?
- Which pieces of IP is someone else most likely to copy?
Prioritize protecting those pieces of IP immediately.
Create an IP protection plan
Next, create a plan to protect your IP. This step requires you to consider how you will use your intellectual property, and decide on the best way to protect and leverage it.
Remember, different forms of IP require different forms of protection. Copyright and trademark eligible IP receives some level of protection once it’s created or in use. However, you must register it for maximum protection. Inventions must be registered immediately or risk losing out on patent protection. Meanwhile, trade secrets can’t be registered (obviously). They are protected with contracts (i.e., NDAs) and proper procedures.
Furthermore, if you’re hoping to create passive streams of income from your IP, you’ll need licensing agreements regardless of what type of IP it is. With all the different factors that you’ll have to weigh, this is a good stage to consult with a professional if you haven’t already.
Once you know what needs to be done set a budget, decide who will be responsible for executing each step of the plan, and set any necessary deadlines.
Step 3: Execute and Reassess
The only thing left to do is put your plan into action. There may be some bumps in the road. But if you created a comprehensive plan, you should be able to move forward without any major setbacks. Once your IP has been protected, reevaluate your situation every 6 months or so. Over time laws change, and so will your needs. Make sure you keep your strategy up to date.
Protecting your Intellectual Property as an Independent Contractor
Protecting your intellectual property as an independent contractor is a three step process. But that process isn’t always simple. Having the guidance of a legal professional throughout this process will save you time, and ultimately money. If you’d like to learn more about finding the right attorney to assist you in this process, give MZA Legal a call at 215-999-7790. We’re happy to help you find the right law firm, even it it’s not us!