Sitting on Buried Treasure: 5 Steps to Capitalizing on Your Intellectual Property

I had the honor of speaking to a couple thousand business owners at ICON14 yesterday, which is a truly incredible conference for small businesses hosted by InfusionSoft. The vibe here is so light, friendly and inclusive and yet these are very successful business owners in attendance. All of the speakers, including myself, are giving away tons of valuable information to help small businesses grow.

My presentation was about how small business owners are failing to capitalize on the intellectual property in their business'. As a result, only 5% of most small businesses value is being represented on their financial statements.

That is totally unacceptable. Small business owners don't have shareholders like large companies but we owe it to the stakeholders in our companies — our family members, employees, communities and customers — to harvest the intangible assets in our companies. We also owe it to ourselves.

Capitalizing on your intellectual property will change your life and your business in the following ways:

1. You'll have more money. No more cashflow issues because you can use your IP to raise cash when you need to.
2. You'll have more time. The average business owner does 3-6 jobs within their company. We don't need more work! When you capitalize on your intellectual property, it continues to make money for you long after the work is done. Every time I see revenue come in from my IP, I literally stop and do the “happy dance.”
3. You'll have more influence. Instead of being one of those annoying people who is constantly trying to shove what they are selling down your throat, you can let your IP be your bullhorn. It will speak for you and provide massive opportunities — such as media appearances, additional customers, joint venture opportunities, etc. In fact, the reason I was invited to speak at ICON14 is because someone who works at InfusionSoft heard about Small Business Bodyguard.

Intellectual property is just original creative works used in commerce. You make something and then you connect it in some way to selling something, and voila! You've got IP.

Here are the 4 different types of IP you need to know:

1. Trade Secrets are proprietary information, such as methods, programs, strategies, or formulas that give each business its competitive edge in the market. I used the example of my long time client, Carib Delights, to illustrate how a cheese spread recipe constitutes a trade secret. The issue that arises is if Carib Delights registers this recipe, it will then be public knowledge. Thus, they maintain their recipe as a trade secret, limiting the number of employees that know the complete recipe, and having all employees sign a non-disclosure agreement.

2. Copyright – All of us (artists, authors, architects, software developers and engineers) have works to copyright. In fact, 94% of small businesses use content marketing, meaning that thousands of hours and dollars creating content are at risk without IP protection. A fairly straightforward copyright application can be completed on the U.S. Copyright Office's website for $55 and BOOM! Your original creative works are protected.

3. Trademark – Your brand is very powerful, it's why people purchase from you — because they connect with your brand. That's why it's essential to register your brand elements through trademark registration via the U.S. Patent & Trademark Office. Trademark law gives you legal rights to the unique words, names, symbols, and sounds used to identify and distinguish the goods and services associated with your business in the marketplace. It's important to protect your trademarks from copycats that capitalize on your brand prestige and recognition.

4. Patents – A patent is an exclusive right preventing anyone else from making, using, or selling the patented product or process in the United States for a specified period of time. We've all seen the cool household items created by designer, Michael Graves, and sold at Target and Bed, Bath and Beyond. That is an example of a design patent. Dyson has utility patents on their unique vacuums.

… such as therapist, Andra Brosh, who created a brilliant theory called Ever-After Shock™ to help women who are struggling through a divorce. This was something used with her clients everyday and now she is capitalizing on her IP by teaching it to other therapists and creating books and courses around it.

Mike Geary, the creator of The Truth About Six-Pack Abs, used information he already had and that he shared with his clients everyday to create a $40 e-book that has generated over $15 million in revenue for him over a 5 year period.

And I used the intangible assets that were just lying around my law practice to put together the basis of Small Business Bodyguard and then teamed up with Ash Ambirge, a designer and an editor to re-work it (an important step discussed below). SBB generated over $200k in less than 8 months with virtually no marketing.

Before you can profit from your IP, you have to protect it. Why?

Because nearly $200-250 billion of IP is stolen per year in the US alone.

In my presentation, I shared five real-life stories of small business owners who have had their IP put at risk … or blatantly stolen, often by large corporations. One of the stories I described was Mixed Chicks, a hair product line for curly haired, biracial women. Unable to expand in time to meet the demands of Sally Beauty Supply, the small company was forced to turn down a large purchase agreement. Sally Beauty then launched a line of hair products with eerily similar packaging called Mixed Silk. Mixed Chicks took the case to court and was awarded a $8.1 million in damages for trademark infringements.

I also described another David and Goliath tale, but this time with Goliath (aka Burger King) winning. The “original” Burger King, was a small mom-and-pop burger restaurant in Illinois. The now empire, Burger King, decided to use the same name and immediately registered the trademark for it, restricting the expansion of the original Burger King, and limiting them to do business within a 20-mile radius of their restaurant.

So clearly protecting your IP is extremely important, but how do small business owners go about protecting these valuable assets without spending millions?

There are plenty of options to protect and police your IP without breaking the bank, including:

• Officially registering your IP with the U.S. Copyright Office and the U.S. Patent & Trademark Office
• Issuing DMCA TakeDown Notices
• Blacklisting IP infringers on Google
• Sending a cease and desist order

With these relatively cheap options, small business owners can prevent other companies profiting from your hard work. When properly protected, your company’s IP can be an insurance policy, a retirement account, and a quality of life guarantee.

So how do you capitalize on your IP? What are the steps?

Finding the hidden value of your business – the 95% you're currently missing out on — is totally within your reach! You do it by conducting an Intellectual Property Audit:

1. Mine your company to find the hidden intangible assets.
2. Prioritize the list of assets and choose one set of IP to capitalize on.
3. Re-work what you've got to bring it to market. In this step, you're going to package your IP for a particular audience. Assemble a designer, developer, copywriter and other professionals to help you polish it up so its ready to market.
4. Protect it as outlined above. Register the IP.
5. Profit. Sell or license your IP and do the happy dance when the cash rolls in.

 We ♥ Small Business 

We've got two promos happening now through Monday to make it easier for you to capitalize on the hidden assets in your business!

1. Get $500 OFF Trademark Registration. Stop putting off protecting your brand. Use the code ICON to get your trademark registered by experienced trademark attorneys (that'd be us!) and get ready to capitalize on your IP.

2. Get $50 OFF Small Business Bodyguard. SBB is literally everything you need to know to establish a solid legal foundation for your business in a laugh-out-loud package. Not to mention, two chapters and a plethora of templates and worksheets devoted to protecting your IP. Use the code ICON to get it now.