The Holy City evokes images of cobblestone streets, stately homes, and horse-drawn carriages carrying visitors on tours of Charleston’s rich history dating back to the late 1600s. Notwithstanding this history, Charleston is building a future based upon innovation and technology. The old charm of the Deep South has taken on a decidedly new cutting edge.

Over the last decade, Charleston has greatly diversified its economy by focusing on technology-driven industries. Tourism has been replaced by aerospace, automotive, and information technology as the leading economic drivers. 

Companies like Boeing, Mercedes, and Volvo, together with their many suppliers, have moved to the “Silicon Harbor” alongside SPAWAR, Blackbaud, and Google. The Medical University of South Carolina (MUSC), providing a springboard for healthcare, pharmaceutical manufacturing, and research laboratories, anchors the life sciences sector.

Importance and value of intellectual property in innovation 

While these industries may appear, at first glance, to be different, they share a very important common attribute. They rely upon intellectual property (IP). 

Intellectual property rights protect those intangible creations created by human intellect and are intended to encourage innovation to increase economic growth. Well-recognized intellectual property rights include patents, trademarks, copyrights and trade secrets. Success in this innovation economy requires that businesses pay close attention to both the development and protection of their intellectual property assets, as well the assets of others.  

Surprisingly, many companies do not recognize that they have valuable intangible property to protect. Many believe that these issues have no relevance outside high-tech industries. This is simply not the case. While many businesses may not have the need for patent protection of inventions developed in a sophisticated research and development department, most companies have internet domain names, confidential or proprietary information, databases, service or trademarks, and business or trade names. Likewise, most businesses rely upon and use the intellectual property rights of others, usually in the form of computer software. A company must be mindful of all of these assets

Steps for identifying and protecting intellectual property assets 

The first step toward developing IP mindfulness is taking stock of what a company has in the nature of intellectual property rights. An IP audit, either formal or informal, is important to determining what is subject to protection. Basic questions include an examination of what the company does and what it needs to do it. Does the company rely upon a trademark or brand to drive customers in the door? Does the company rely upon a virtual presence in the form of a website? Does the company license software or does it develop its own? What makes the company unique and different from its competitors, and can that difference be protected? Does the company create patentable or copyrightable subject matter that should be protected, and if so, how does the company capture this innovation?

The inquiry does not stop with existing company IP assets. Companies must examine the role their employees play in innovation and development. IP mindfulness requires a look at what employees do for the company. Are employees subject to agreements that assign employee innovations to the company? Are new hires vetted to ensure they do not (inadvertently) bring their former employer’s IP into the company environment? What happens when employees leave? Are they subject to nondisclosure and/or noncompetition obligations?

Looking beyond the company is also important. An inventory of third-party rights and examination of how these rights are used by the company is critical. Is the company a party to licenses, and if so, are these licenses necessary to continued operation? Can the licenses be terminated, and what happens if they are terminated? Do any other third parties, specifically customers, have any rights? Does the company collect customer data? Does it use the data, and if so, does it have permission to do so?

While an audit or inventory is an important step, it is not a one-and-done exercise.  Consistent and continuous monitoring of these issues is crucial to IP mindfulness. Once a company has a firm grasp of the various IP assets associated with its business, it should determine whether and how these assets may be protected. Protection may include filing patent or copyright registration applications, applying for trademark registration, entering into contracts with employees or third parties, or developing protocols to ensure that trade secrets remain secret.

Operating within an innovation-driven environment also presents challenges from competitors. While it is essential to develop and protect company IP assets, infringing upon the rights of competitors must also be avoided. A path of innovation may lead directly into a brick wall built from the patents of another. Bypassing these pitfalls requires anticipation and diligence in the form of freedom-to-operate opinions and other legal clearance. Such safeguards go far in steering clear of the unwelcome cease-and-desist letter or infringement lawsuit.

Protecting Charleston’s innovation reboot

Innovation and creativity is driving Charleston in the 21st century. With this reboot comes corporate expansion, jobs with increased pay, and a diversified, sustainable economy. Successful businesses exhibiting IP mindfulness will be poised to thrive in this economic environment, capturing and commercializing creative output. Failure to be mindful may result in a company left with nothing more than a mention on the pages of history.  

Corky Klett is a partner at Burr & Forman, who recently relocated to Charleston from Columbia to provide counsel on intellectual property for businesses in the region’s active innovation economy. His practice focuses on litigation of patents, trademarks, and copyrights throughout the Southeast and in courts across the United States. Klett also handles intellectual property aspects of corporate transactions, as well as identifying the best options for protecting the rights and interests of inventors, engineers, artists, authors, and musicians.

He may be reached at [email protected].