Failing to protect intellectual property is one mistake that can’t be undone, but not enough businesses realize that until it’s too late, according to attorney Michael Martensen.

Speaking at the Innovation Without Protection Is Philanthropy seminar Tuesday, Martensen also said many people think their company has no intellectual property, or fail to correctly identify what it is.

“All companies have intellectual property, and the intellectual property helps define what their competitive advantage is,” Martensen said.

Protecting that competitive advantage is “incredibly important” because the vast majority of value of a company is its intellectual property.

Martensen, a patent attorney with Springs-based law firm Martensen IP and former Air Force fighter pilot, said intellectual property protection fits the “parachute analogy.”

“Have you ever heard the parachute analogy? From a pilot’s perspective, if you need a parachute and you don’t have one, you’ll never need it again. Intellectual property is very similar to that,” he said.

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“If you lose your IP, if you lose a trade secret, or you forget to file a patent because you just don’t have the time or money, you can’t turn back the clock. It’s done.”

Typically the barrier is that “cash is king,” Martensen said. Business owners see it as a choice between paying their employees and their rent, and securing their intellectual property — “I can either pay my employees or I can invest in my future.”

But it’s a mistake where the costs can sink a company.

Martensen described patent litigation as “the king of litigation,” with the average case running between $1.5 million and $2 million in legal fees (not damages) and taking two to three years.

“If you’re not going to protect [your IP], you’re going to give it away. You look at the most successful companies and successful entrepreneurs, they have taken steps to protect their intellectual property to make sure they have indeed captured it,” he said.

Companies with foresight look at what they plan to do with their intellectual property at least five years down the track, and consider how they’ll need to protect it going forward.

“…That’s often the difference between a growing and emerging company — one that’s continually innovative — and one that’s going to be around for a while, and they’re never going to expand and go forward. … It’s part of the business-growing process,” he said.

The seminar, part of the Intellectual Property Series for Aerospace and Defense hosted by Southern Colorado Technology Alliance at Catalyst Campus, aimed to “give the basics of intellectual property and some train wrecks to show how bad this can get,” while addressing unique issues with both commercial IP and government contracts, Martensen said.

“I’m trying to give you an appreciation for when you need to think about these things and ask questions, and how make sure those train wrecks … won’t happen to you,” he said. “…You need to be able to identify what you can protect and can’t protect, so you can develop your business strategy and your success.

“Whether it’s a software company or a product-based technical company or even a service-based company, they all have some form of intellectual property that they should be concerned with.”

For more information, including information about how government contracts can impact intellectual property, pick up the July 21 edition of CSBJ.