Intellectual Property (IP) is a valuable asset that is included in a company's "balance sheet" and provides additional valuation to a company. For early stage and small companies, IP may be the company's sole or primary asset base.

Intellectual Property includes patents, trademarks, service marks, copyrights, and trade secrets. This value-added asset can be sold, bought and traded as a part of everyday commerce.

It is important for a company to know what IP it has and how to enhance the company's IP position which, in turn, enhances the company's valuation.

Patents are often the most valuable IP asset for most companies. Strictly speaking there are three types of U.S. patents:

(1) Design Patents (for example, an ornamental design for an article of manufacture)
(2) Plant Patents (for example, an asexually produced flower or plant)
(3) Utility Patents

The most common patent for technology-based companies are utility patents. Utility patents are granted to inventors according to the Patent Act, which can be found at Title 35 of the United States Code (U.S.C.) and states as follows:

"Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefore, subject to the conditions and requirements of this title." (35 U.S.C.,