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Your intangible assets can be some of the most valuable assets your business has, and you should manage these as seriously as your physical assets. Intangible assets include intellectual property (IP) like patents, trade marks and copyrights, and your business’ name and reputation. While it can be harder to keep track of intangible assets, it is crucial to do so. This article sets out how to identify your business’ intangible assets and how to protect them. It also recommends including an IP clause in your employment agreements if intellectual property is significant to your business.

Identifying Your Intangible Assets

A process of elimination can most easily identify intangible assets. Think about everything that contributes value or adds to your business somehow. Next, take away all the elements with a physical dimension, such as property or stock. What is left are typically your business’ brand, reputation in the market and intellectual property. These things might be more complicated to count than stock, but they are often the most important assets in your business. 

When thinking about managing your intangible assets, make a comprehensive list of everything you can think of that adds value to your business but has no physical form. 

Common examples of intangible assets include:

Protecting Your Intangible Assets

After identifying your intangible assets, the next step is to make a plan or strategy to protect each of them. This can be tricky as different assets usually require different kinds of tactics to safeguard them. It is not always obvious to work out how to protect intangible things like your business’ reputation. At this stage, it is best practice to consult an intellectual property expert or commercial lawyer. These experts will ensure you are doing the best thing to protect your business’ assets. 

As a general rule, you should ensure that all of your intellectual property has the protections that New Zealand law offers. For example, ensuring that your copyrights and other intellectual property are active and not due to expire anytime soon. You can also register your business name to stop other businesses from registering it themselves. Likewise, registering a trade mark for your business name, its logo or slogan (if applicable) provides further IP protection to your business.

You can also take administrative steps like making a portfolio of trade marks. Having this portfolio will make it easier in the future to monitor any breaches of your trade marks. 

Including an IP Clause in Your Employment Agreements

A final tip is to consider including an intellectual property clause in your employment agreements. An intellectual property clause clarifies that anything an employee invents or creates as part of their role (or when they are at work) is the intellectual property of your business, not the employee themselves. They cannot claim ownership of any intangible assets produced at work. Likewise, if they leave the business, they cannot take any of those assets or intellectual property with them.

This kind of clause is particularly important if your business creates many new intangible assets or intellectual property. The added effect of this kind of clause should be to clarify to employees, the rules regarding intellectual property. Otherwise, employees may think that anything made in their role can be taken to a new role. 

Ask yourself, would your business be at risk if an employee were to share business secrets with a competitor once leaving their role with your business? If the answer is yes, you should engage a lawyer to draw up a comprehensive IP clause in your employment agreement.

Key Takeaways

Managing your intangible assets is an important exercise when you have a business with a valuable name, reputation and unique products and services. There are different stages to managing these assets. Identifying your business’s intangible assets is an essential first step, followed by devising a plan to protect each of them. Different assets require different forms of protection, but obtaining intellectual property registrations and protections is crucial. Finally, consider including an intellectual property clause in your employment agreements to protect your intangible assets from employees when they leave the business. 

If you want to know more about intangible assets, including managing and protecting them, contact LegalVision’s business lawyers on 0800 005 570 or complete the form on this page.

Frequently Asked Questions

What are intangible assets?

These are things that contribute to your business and add value in some way but do not have a physical form. Common examples include intellectual property like copyrights, and a business’ name and the reputation associated with that name.

How can intangible assets be protected?

Depending on what the asset is, there are different protections on offer. For instance, you can register a business name, prohibiting other businesses from registering the same name in the future. With other assets, like trade marks, you can record these in a portfolio, making it easier to do searches to see if there are any breaches to your intellectual property.

What is an intellectual property clause in an employment agreement?

An intellectual property clause sets out that intangible assets that an employee creates at work belong to their employer (the business). Likewise, the business has ownership over this intellectual property, including if and when the employee leaves the business.

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