LegalReader.com  ·  Legal News, Analysis, & Commentary

How to Protect the Intellectual Property of Your Software Invention


— June 24, 2021

Software companies can also protect their confidential data with in-house security protocols like restricting access to those with credentials and the use of data loss prevention software.


With more companies facing cyberattacks and intellectual property loss, the importance of cybersecurity in business and rigorous protocols to protect intellectual property is becoming much more of a priority – particularly for software developers. Each year, companies lose millions to copyright infringement attacks on their business, finances and software. For any software development company, intellectual property rights are the cornerstone of protecting their hard work. While it’s intangible, your intellectual property can be your most valuable asset in the software industry, and by being proactive from the start, you can protect your rights, your development, and your business.

What are Your Rights for Intellectual Property?

In the eyes of intellectual property rights for software, three different types of intellectual property rights are recognized by the federal government: Trademarks, Patents, and Copyrights. Each type has different legal protections attached to it, so it is wise to clarify which one applies to your software first. For instance, copyrights and patents are used to protect the technology, while trademarks are intended to protect the logo or distinguishing symbols for the software.

Each type of intellectual property rights also comes with its own set of terms. Patents are extended for 20 years, and can give the holder a monopoly on producing and selling a qualifying invention. Therefore, any other software company found to be replicating the software is deemed to be infringing, and entitles you to seek damages. Copyrights are more restrictive, since they only protect software in the form it was expressed. It can, however, be modified or replaced with authorized permission. Keep in mind that the laws on intellectual property rights also differ according to national laws.

Ensure You Have a Legal Agreement in Place with Your Developer or Outsourcing Talent

If you’re outsourcing any part of your software development, you must have confidentiality and legal agreements in place before contracting out any work. It’s also advisable to include code revisions, software testing, and the revision of prototypes in your independent contractor agreement to avoid paying extra for these additions, or include additional contractors for revisions. Your contractor agreement should address ownership of your intellectual property (IP) and all associated properties. When drafting your contract, it also helps to check the IP infringement or breach of contract penalties in the country of enforcement for reference.

File for Your Patent and Trademarks as Soon as Possible

USPTO seal; courtesy of U.S. Patent and Trademark Office; public domain.
USPTO seal; courtesy of U.S. Patent and Trademark Office; public domain.

According to estimates from The Commission on the Theft of American Intellectual Property, pirated software, counterfeit goods, and theft of trade secrets cost the economy between $225 billion and $600 billion every year. This figure does not include the cost of patent infringements. While physical property can be replaced or repaired with insurance coverage, intangible properties like copyright and intellectual property for your software are much more difficult to replace.

One way to protect your software from the start is to apply for a patent and trademark. Before applying for a software patent, speak to a patent attorney and your software developers to determine whether your software can be approved for a patent. Your attorney will also advise you on the technical criteria your software needs to meet to secure a patent, which applies for 20 years from the date of application. The use of the Rapid Application Development model for software applications and accelerated prototype development allows you to test and revise your invention quicker to meet the technical criteria. An alternative to a patent is to apply for a trademark. However, while a trademark protects your software from imitation of your specific coding, it does not protect your software if someone develops their code or software variation.

Buy Intellectual Property Insurance

Finally, consider getting insurance to protect your intellectual property. Intellectual property insurance can help to cover the loss of income and legal fees associated with pursuing IP infringement cases for your software. Some of the most popular IP infringement cases in recent years, like the recent Stac Electronics and Microsoft’s $120 million lawsuits, have highlighted how expensive it can become. As more businesses realize the importance of IP insurance, IP insurance is growing by 300 percent, according to The International Risk Management Institute.

Software companies can also protect their confidential data with in-house security protocols like restricting access to those with credentials and the use of data loss prevention software. It is also important to implement these measures sooner rather than later. Protecting the intellectual property of your software from the start could make the difference between it being viable or not.

Join the conversation!