Many startups have similar foundations: a great idea, a focused team
and an endless supply of energy drinks. Most businesses have
intellectual property (IP), but in the excitement of focusing on the
startup concept, the IP issues that surround it often get pushed aside
or ignored altogether.
As a result, there are countless war stories about startups and IP,
from the enterprising tattoo artist who bested the movie studio that
created "The Hangover Part II" in a claim for copyright infringement, to
the startup behind Dippin' Dots that lost its patent rights to its
summer treat because an application wasn't filed in time.
Knowing where to begin with protecting IP can be daunting, especially
since each type has its own set of rules. Four key issues to attend to
when starting a business:
- Identify the IP. There are four types of IP:
patents (inventions), trademarks (brand names and logos), copyrights
(software, website design, advertising materials, music and photographs)
and trade secrets (information that provides an advantage because it is
secret, including customer lists, recipes and business plans).
- Secure the IP. When hiring outside parties such
as Web developers, software coders or marketing companies, startups
must take precautions to ensure ownership of the work's IP, usually in a
written contract with specific IP provisions.
- Protect the IP. Not all IP must be registered
for rights to exist, but there are some instances in which registration
is required (patents), and others in which it is advantageous
(trademarks and copyrights).
- Clear the IP. It is best to check for others'
use of similar IP, especially trademarks, before adoption. Checking
first can avoid costly lawsuits and subsequent rebranding.
Attention to these issues from the outset can result in huge payoffs, while ignoring them can have devastating consequences.