Protecting intangibles…beyond patents


So, you are starting a company in the green tech space and you’ve ticked off all the boxes.  Business plan?  Check.  NDAs?  Check.  Patent applications filed?  Check.  Trademarks…Wait, how about your data?  How do you protect that?

As the Facebook® scandal has shown us, the value of data cannot be underestimated.  Analytics have enough power to influence an election.  Yet how much more valuable is data to a business that relies on R and D?  Graphs, raw data from bench scale experiments, plant operation data, material balance sheets, data modeling information, data acquisition systems, genomics data for rational enzyme design, to name a few examples, are core to a company’s business value.  Cumulatively, this vast and rich source of information can be more important than even your patents.  However, it is one of the aspects of intellectual property (IP) protection that is often overlooked until it is too late.

Unfortunately, partners who might be more sophisticated, and appreciate its value more than you, could use this fact to their advantage.  For instance, without a proper appreciation of the value of your data, plant operation information might be used by a partner to design and operate their own plant after a business relationship has gone sour and effectively piggy back on your hard work and years of investment in getting a plant up and running.  This is a particular concern for start-ups with an under-appreciation of the value of data.

Can data be protected as an IP right?  The answer is yes.  In fact, unlike a patent that expires after 20 years from filing, such information can, in principle, be protected indefinitely.  For instance, plant operating data can be protected as confidential information or as a trade secret.  In the United States, most states have enacted a version of the Uniform Trade Secrets Act, similar to a federal patent act, but that has jurisdiction at the state level.  Under this legislation, trade secrets include information, including a formula, pattern, compilation, program, device, method, technique or process that meets certain requirements.  The precise legal definition is beyond the scope of this article, but generally requires that economic value can be derived from the information, and that efforts have been made to maintain its secrecy.  Compilations of information might also be protectable under copyright.

Of course your own situation will be unique and will require tailored legal advice (i.e., the above is in no way, shape or form legal advice), but being aware of the value of data and the need to properly protect and leverage it during transactions could be one of the best business decisions you will ever make.


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