{"id":4815,"date":"2022-09-16T09:11:53","date_gmt":"2022-09-16T09:11:53","guid":{"rendered":"https:\/\/presspay.ng\/news\/?p=4815"},"modified":"2022-09-16T09:11:56","modified_gmt":"2022-09-16T09:11:56","slug":"4-intellectual-property-mistakes-startups-make-and-how-to-avoid-them","status":"publish","type":"post","link":"https:\/\/presspay.ng\/news\/4-intellectual-property-mistakes-startups-make-and-how-to-avoid-them\/","title":{"rendered":"4 Intellectual Property Mistakes Startups Make and How to Avoid Them"},"content":{"rendered":"\n

There are many legal issues<\/a> that startup founders<\/a> must attend to. Ensuring that a company’s intellectual property (IP)<\/a> is protected is one of the highest priorities. If there is a product, then there is IP. But the critical question is: who owns it?<\/p>\n\n\n\n

Just because a startup<\/a> is working on a product doesn’t necessarily mean it owns the IP \u2014 and even if it does, the IP is protected. A founder may also overlook the full breadth and scope of IP, which often includes a combination of patents, trademarks, copyrights and trade secrets.<\/p>\n\n\n\n

Many startups fail, or at least needlessly struggle because they fail to properly recognize and protect<\/a> their potential IP assets from the start. This can create considerable challenges while raising capital or going to market with a product. In short, mistakes related to IP can be fatal to a startup.<\/p>\n\n\n\n

Here are four of the most common intellectual property mistakes startups make, in no particular order, and some steps to help avoid them.<\/p>\n\n\n\n

1. Making wrong assumptions about IP ownership<\/h3>\n\n\n\n

Let’s revisit the question posed above in the context of the following scenario. Two friends, one a developer and one a product manager at two separate companies, meet for beers after work. The developer talks about some exciting software he has written which could potentially solve a problem that the product manager has noticed in the B2B<\/a> marketplace.<\/p>\n\n\n\n

They sketch out a few ideas on the back of a napkin and decide to launch a SaaS business to bring the product to market. They form a corporate entity and get to work on the product.<\/p>\n\n\n\n

So, who owns the IP?<\/p>\n\n\n\n

Without knowing more, it’s impossible to say \u2014 and therein lies\u00a0the problem<\/a>. It’s a bad idea to assume that, just because co-founders start a business, the business owns any IP one founder worked on before the company started (or even after).<\/p>\n\n\n\n

In general, the shorthand rule for IP ownership is that the creator of a thing, whether a co-founder or freelancer, owns the thing. Ownership rights can be proactively or retroactively assigned to the business by contract (such as through operating,\u00a0employment<\/a>, or independent contractor agreements). Where startups run into trouble is making flawed assumptions about IP rights, forcing them to scramble and expend resources to correct oversights.<\/p>\n\n\n\n

2. Adopting a do-it-yourself approach<\/h3>\n\n\n\n

There are ways that founders can cut corners and avoid legal fees<\/a> without creating existential threats to the underlying business, but adopting a DIY approach to intellectual property is not one of them. The simple rule to adhere to is: Don’t use a form you find online for any agreement that could impact IP. As the old saying goes, “penny wise, pound foolish.”<\/p>\n\n\n\n

IP is too important to leave things to chance. And when founders use online forms to create agreements with employees and vendors, they’re taking a big chance that could lead to the business losing control (or never securing in the first place) of critical IP.<\/p>\n\n\n\n

3. Skipping simple steps that could help with IP problems<\/h3>\n\n\n\n

It happens more often than you might think: a founder incorporates and begins operating using a name for the business already taken. This mistake can easily be avoided<\/a>, and in this case, there are a few DIY steps a founder can and should take.<\/p>\n\n\n\n

Before settling on a name, do a\u00a0trademark<\/a>\u00a0search on the United States Patent and Trademark Office’s\u00a0Trademark Electronic Search System (TESS)<\/a>. The fact that a name doesn’t show up on TESS doesn’t guarantee that someone else doesn’t own the trademark, but it’s a good starting point. Other simple searches can be done on\u00a0Google<\/a>, relevant secretary of state websites, and a domain registrar, such as\u00a0GoDaddy.com<\/a>.<\/p>\n\n\n\n

4. Failing to develop an overarching IP strategy<\/h3>\n\n\n\n

As we’ve discussed, IP is among the most valuable assets of a startup. Therefore, a startup should invest in developing a comprehensive strategy<\/a> so that its IP can be protected and monetized as the business races to raise capital and bring its product to market.<\/p>\n\n\n\n

Working with experienced IP counsel<\/a>, a startup should formulate a strategy that, at a minimum:<\/p>\n\n\n\n