For many businesses, a website is among the company’s most valuable intangible assets. A company’s website (or mobile site) serves as its front door, calling card, storefront, and corporate bio for actual and potential customers.
However, many businesses fail to protect this asset until it is exposed to risk. For example, small businesses who rely on a single employee or contractor to develop and maintain the site can face problems maintaining and updating the site if that employee or contractor relationship ends. Or, they may find a competitor copying the features that provide the most business value.
What can companies do to avoid these issues? Useful practices include:
- Own the code. Many companies hire outside contractors to design and maintain the company website. When doing this, it’s critical that the development agreement provide the company with rights to control, modify, copy and use the code — whether through ownership or license. A company who pays for software development typically does not have the right to copy, modify or distribute it unless the development agreement specifically says so.
- Control the code. It’s also important that the company receive copies of all developed code, even if the contractor is hosting the website. If the contractor fails to perform, loses a key employee, or simply starts to charge more than the company wants to pay, the company will find it impossible to go in another direction unless and until it has the code. Too often, companies fail to include this requirement in their development agreements. Or if they do, they don’t enforce it until a problem occurs — at which point it may be too late.
- Identify your trademarks. A website is the first place that many customers will go to discover information about the company’s products or services. The names of many products and services may be trademarks, even if the company hasn’t registered the marks with the U.S. Patent and Trademark Office (USPTO). Although not legally binding, the use of a “TM” symbol with unregistered marks can help put others on notice of the words or phrases that a company considers to be its valuable trademarks.
- Consider trade dress protection. Trade dress protection, which is available under U.S. trademark law as well as state laws of unfair competition, covers the distinctive features of product’s physical appearance. Several federal district courts, including those in Pennsylvania, California, Louisiana, Washington and Texas, have held that the overall “look and feel” of a website can be trade dress that is entitled to protection under the federal trademark statute. To receive trade dress protection, the look and feel must (1) be distinctive, (2) have secondary meaning, and (3) be non-functional.
- (Maybe) patent the unique features. Many websites contain unique functionality that can be considered to be a patentable invention under U.S. patent law. While patenting software has become much more difficult in the wake of the U.S. Supreme Court’s decision in Alice v. CLS Bank, patent applications that claim significantly more than just an abstract idea can still find success at the USPTO.
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