For small businesses that are just getting started, intellectual property (IP) is their most valuable asset. If your company has created a unique product, technology, or service, protecting the intellectual property you have developed is key to your success. Both the company's founders and investors must ensure all IP is first identified and then protected through agreements and registration, while also avoiding infringing on the intellectual property of third parties.
Here are 5 of the biggest IP problems for companies and their solutions.
1) Not Considering an IP Protection Strategy
Your company's most valuable asset is its intellectual property. Whether in the form of a service, software, or new product, founders need to devote time early on to identifying their IP needs/
Many companies fail to recognize the difference between the various types of IP protection. In some instances it may be more effective to use trade secret protection for software rather than a copyright or patent. Take the time to do research and work with an IP professional to create an effective and reasonably prices strategy to protect your IP assets.
2) Breaching Another Company's Trademark
Another common and costly mistake companies make is infringing on the trademarks of other companies. A trademark is a word, name or symbol that distinguishes a company or product. Some examples of trademarks are brand names such as Google, Amazon or Microsoft. Some startups make the mistake of thinking that because they are able to acquire a domain name, they are allowed to use it even if it is similar to another company’s mane or brand. If that company tries to use a name or symbol similar to someone else’s , they could be facing legal repercussions.
Your company should at least do a search on not only the USPTO site but also search engines to determine if a word, name, or symbol will inevitably infringe on another company's trademark.
3) Failure to Use and Implement The Right Contracts
A lot of startup culture is informed by the idea of being easygoing and informal in the early stages of development. While that can make for a great environment for creativity and collaboration, it can be a detriment if certain formal requirements are not met. Every company needs to have legal agreements in place regarding IP with all of their founders, employees, contractors, and third-party vendors. Having these agreements will protect a company’s intellectual property. When considering these agreements, here are some questions to consider:
- Who owns the intellectual property?
- Have employers and vendors signed a confidentiality or invention assignment agreement?
- Are you hiring a vendor to solely manufacture your product or technology, or are there other agreements?
- In case of any IP infringement, who will bear the legal costs?
4) Registering Their Trademark After The Company Grows
Your company should register its trademarks as soon as possible. Your brand name is has tremendous value and needs to be taken into account when developing your IP strategy. One of the best examples of brand value is Nike. The swoosh that is synonymous with the athletic apparel giant is worth over 13 billion dollars. What’s even more noteworthy is that its creator, Caroline Davidson, handed it over for just 35 dollars, a decision I’m sure she may regret. Today the logo is the most well known in the world. People all around the world know the Nike symbol, which can be seen everywhere from elite athletes in every sport to the person next to you at the gym.
Your trademark is an important part of your branding, and so you should not underestimate it's importance.
5) Waiting Too Long To File Patent Applications
Startups usually have very limited budgets, so they often try to find ways to maximize what they can get with their limited funds. Things like marketing and customer acquisition often take precedence over protecting IP. But cutting corners on IP in the early stages of your business can be costly in the long term. A considerable portion of your innovation-based IP is created in the early days of the company, and it’s often an idea that inspires an entrepreneur to start a company in the first place. That’s why it’s vital to make sure that your company’s ideas are protected. By waiting to file for patents (or trademarks or copyrights), you risk losing these valuable intangible assets.