IP Basics for Startups

Protecting a startup is critical for entrepreneurs, as well as for investors. Intellectual property (IP) protection can help your company secure capital and build brand awareness. All invested and interested parties need to concern themselves with protecting a startup’s valuable intellectual property, or the startup may go nowhere. With that in mind, review these common IP questions and answers.

When should I address IP protection?

The answer is simple: ASAP! The sooner you can begin protecting the intellectual property of your startup, the better position you’ll be in for business success.

Some business owners think that protecting their IP can be expensive, time consuming, and ultimately unnecessary. However, that’s a misconception…a startup’s most important assets are in many instances its IP. If you leave this unprotected, you place your entire business at risk.

What are the different types of IP assets?

Intellectual property includes four types of assets: patents, trademarks, copyrights and trade secrets. Most entrepreneurs think first and foremost of patent protection: patents protect utility functions of the startup’s goods or services. But in addition, there are trademarks that protect the company’s brand, copyrights that protect the expression of an idea (such as art, music, or software programming), along with trade secrets that protect the things unique and valuable to your company.

To protect your innovative startup and products from the get-go, you should employ a knowledgeable IP attorney to help you develop secure and effective legal tactics that mesh with your business goals.

Do I really need to do all this IP protection today?

Well, maybe not all four types from Day One. But your startup should consider filing for a trademark application on its primary brand, as well as a provisional patent application to protect its goods and services if there’s something novel in the offering. Your attorney will conduct thorough research before initiating the filing, which must be thorough and meticulous. If you miss a patent or trademark and file, you might inadvertently replicate protected IP.

Why should I invest my limited resources (money) on IP protection so early?

Although startups must be extremely sensitive to the bottom line, there are many ways in which startups benefit from IP at the onset. Let’s look at patents. Timing is critical with patent protection. When you disclose an invention in the U.S., you have just one year to file a provisional patent application. In addition, under the America Invents Act (AIA), the U.S. works under a “first to file” system—not a “first to invent.” So, if you show your invention to your next-door neighbor, and she files a patent application using your concept, you may be out of luck, since she was the first to file.

What do I need to consider about trademark protection for my startup?

Trademark protection is critical to protect your startup’s brand. There are two factors to look at when building your brand and registering a trademark. Be certain that the logo you’re using to build your brand (or goods or services) isn’t already registered by another party. Also, note that trademark protection happens with use, so it doesn’t provide a universal protection. Startups need to register their trademarks; otherwise, the ability to fend off others from using it will only extend as far as your local geography. Startups must build brand awareness, and lack of trademark protection can hamper your company’s growth in the future. It’s wise to register your trademarks right away.

Why are copyrights important to my new business?

Copyrights protect your company with respect to others infringing upon the unique works that represent the character and integrity of your brand, goods, or services. Examples of works that have copyright protection include catalogs, codes, and articles. If someone is using an article you wrote about some aspect of your industry or a “how-to” guide, you can have your attorney send that party a “cease and desist” letter, or you might file a copyright infringement suit. However, to protect your materials and enforce your rights, you need to have a registered or applied for copyright.

What are trade secrets?

A customer list, internal data, financial information, formulas, research notes, and product prototypes may all be considered trade secrets. To protect your startup’s trade secrets, you need to create policies and procedures that demonstrate ownership. This policy of protection must be completed before any trade secret claim. Your IP attorney can help you craft effective company trade secret guidelines.

What else should I know about IP for my startup?

It’s important to know the origin of all images you’re using in your product marketing and customer communications. When using an artist or photographer, you should state the ownership rights in your agreement, particularly when that individual is an independent contractor. Get everything in writing, of course… like follow-up emails after phone calls to keep a record of oral understandings or changes to artwork or project parameters.

Any other thoughts?

Don’t think of your intellectual property protection as a box to check on your “to-do” list. Instead, work with an experienced IP attorney to develop a complete IP strategy. Your startup should set short-term objectives and a long-term plan for your IP portfolio. Create this before making any IP or available to third-party vendors.

Summary

One of the most worthwhile things you can do to ensure the success of your startup is to protect your products and services from others who may try to profit from your work and ideas. Meet with an experienced IP attorney and get the resources you need to guarantee all aspects of your IP will remain your own.

Attorney Michael Ahmadshahi, PhD, focuses on patents, intellectual property, copyright, and trade secrets in Irvine, California. The Michael Ahmadshahi, PhD, Law Offices are also located in Beverly Hills and Sherman Oaks. Call us toll free at (800) 747-6081 or direct at (949) 556-8800 or email info@mmaiplaw.com and let us help you with your intellectual property questions and the IP strategy for your startup.

Michael Ahmadshahi

Mr. Ahmadshahi’s area of practice is Intellectual Property Laws including Patent Prosecution and Litigation, Trademarks, Copyrights, Unfair Business Practices, and Business Litigation. He is also an entrepreneur and an inventor.