Almost every business, whether a startup or an established company, has intellectual property (“IP”). IP is what provides your business with a competitive advantage. Examples include a business’s name, logo, inventions customer lists, or website, all of which are valuable business assets that should be protected.
A successful startup should understand how to identify and protect its IP. Below are some pointers that every startup should consider.
Make sure you own the IP.
In the early stages of a startup, individuals typically collaborate informally to develop their ideas and there may be no formal agreements among the individuals. Without a formal agreement as to ownership of the IP, there may be a dispute as to ownership. Further, the individuals in a startup may be bound by other agreements with their current employers, which may require the individual to assign the IP to the employer. Therefore, ownership of IP should be openly discussed and agreed upon. Formal agreements should then be executed at the time of the initial setup of the company.
Protect your IP from inadvertent disclosure.
Startups typically share too much information with others in the beginning. This can be out of excitement for the startup or to attract investors. While disclosure of information is necessary to build the business, there may be an accidental disclosure of confidential ideas or plans. Furthermore, in some cases, the public disclosure of IP may adversely affect one’s IP rights. To mitigate this risk, a startup should determine what information can be disclosed without compromising its IP rights. Formal agreements may also be used, such as a non-disclosure agreement.
Protect your IP.
Once a startup has identified its IP, the startup should then look to potential IP protection. IP protection can come in the form of a trademark, copyright, patent or trade secret protection. The type of protection available depends upon the IP at issue. Determining the type of IP protection available at the start will help a startup plan and develop its internal policies and procedures and help secure its competitive advantage in the marketplace.
Develop an IP Strategy.
A startup should develop a strategy to set out how it will continue to pursue and protect its IP. Developing an IP strategy will support the company’s growth from the beginning and also provide for an exit strategy. An overall IP strategy will identify the startup’s goals and provide for a global strategy that works towards those goals.
From the outset, in addition to the legal formation of a business, startups should also be looking at their IP and actively protecting their IP, because they are valuable business assets that should be protected from competitors.