Intellectual property is often the foundation of a growing company, so owners and managers of many small and growing companies focus their energies and resources on its development and protection.

In fact, the balance sheets of many emerging companies show that their intellectual property is their most valuable asset. If competitors were free to copy and use those ideas and inventions, innovators would, in effect, be sacrificing their stock-in-trade.

It is, therefore, critically important for companies to take steps to protect customer lists, patents, trademarks, proprietary systems, methods, processes, products and operational techniques. As a first step, every innovator needs to understand the definition of the various legal components of intellectual property.

There are several classifications of intellectual property and correspondingly different legal protections. To determine which legal mechanisms should be protecting your company’s intellectual property, consider the following introductory descriptions and make sure to consult the appropriate experts.

Patents. A patent grants an inventor the right to exclude third parties from making, using or selling the subject matter of his or her invention throughout the United States for a defined period of time. Patents can be broken down into different categories, including utility and design.

Trademarks, service marks and trade names. The Lanham Act of 1946 defines a trademark as any word, name, symbol, or device adopted and used by a manufacturer or merchant to identify and distinguish its goods from those manufactured or sold by others and to indicate the source of the goods. A service mark serves similar purposes, but it protects the advertising and marketing of services rather than products. A trade name is the name a business or other organization selects to identify itself as a distinct entity.

Copyrights. Copyright protection is available to authors of original literary, dramatic, musical, artistic and certain other intellectual works that are fixed in any tangible medium of expression. In most cases, the owner of a copyright from the US Patent and Trademark Office has the exclusive right to authorize others to reproduce and/or prepare derivative works, distribute copies, perform or display the copyrighted work during the author’s lifetime, plus 50 years.

Trade secrets and know-how. While trade secrets, considered collectively, often comprise the prime IP asset a company owns, the protection regime for trade secrets is not based on a federal statute, unlike patents, trademarks or copyrights. Trade secrets are unpatented bodies of information that lay outside the public domain. Products, or the way they are made, may be (or at least include), trade secrets. Tweaks and modifications to improve equipment, even off-the-shelf equipment purchased on the open market, may qualify; as do the fruits of the R&D operations: blue prints, test results (even unsuccessful test results are protectable), designs, databases, and the like. Know-how is a first cousin of trade secrets but far more difficult to inventory as a discrete IP asset; it is an accumulation of information, knowledge and experience (some of which may qualify as trade secrets, some not) that enables its possessor to achieve practical results.