As a startup, one of, if not the most, important asset you have is your intellectual property (IP). As such, it’s important to nail down a strategy on how you will protect it early on in the life of your startup. Here are a few different angles you’ll want to consider when planning your IP strategy.
What is intellectual property (IP)?
Generally, intellectual property is anything considered a product of human intellect that can be protected by law from unauthorized use by others. Whoever owns the protected property has an inherent (but limited) monopoly in it. For startups, IP is an asset that could help attract funding or potentially be leveraged in a potential exit down the road.
IP can be broken down into four categories:
- Trade Secrets
Copyrights protect works of original authorship, like art, written works, music, programming code, images, etc. Copyrights grant the author exclusive rights to make copies of the protected work, including performance, new adaptations, and distribution it. Generally, they are easier to obtain than patents or trademarks. Costs vary depending on the kind of work being protected, but typically vary between $25 and $100. In the U.S., copyrights can be registered at copyright.gov.
Trademarks can protect a specific word, name, phrase, symbol, color scheme, sound, or even smell that is used to distinguish a product in the market. Technically, trademarks do not have to be registered to be in effect, they must simply be used in commerce. That said, registering a trademark offers more protection. Cost-wise, trademark registration can range from $225 to $325 per mark; however, it is advisable that you hire a lawyer to assist in this process, the costs of which will vary.
Trade secrets are proprietary information, strategies, procedures, systems, devices, or any other type of confidential, exclusive information held by a company. While there is no formal, federally regulated registration for trade secrets, companies can protect themselves by taking appropriate measures to secure and mark confidential things accordingly. Trade secret protections enable the owner to take action against anyone who breaches any confidentiality agreements and/or shares or obtains unauthorized access to confidential information.
A patent grants rights to inventors for their invention. As far as protections go, patents are the most robust – no one other than the patent holder may make, use, or sell the patented property. The process of obtaining a patent can also be long and expensive and not all inventions may qualify. To be eligible to receive a patent, an invention must meet the following conditions:
- Must be the concrete embodiment of an idea, formula, or product
- Must be new or novel
- Must not have been patented or described in a printed publication previously
- Must have a useful purpose
There are three types of patents:
- Utility Patents – Covers the creation of a new or improved, useful product, process, or machine
- Business Method Patents – Covers new methods of doing business, including types of e-commerce, insurance, banking, etc.
- Design Patents – Covers unique visual qualities of a manufactured item that has practical utility, easier to get than a utility patent
In addition to these different types of patents, there are provisional and non-provisional patents. Provisional patents offer one year of protection and can be useful if more time is needed to finish the product before filing for a non-provisional patent, which is good for 14 to 20 years, depending on whether it is a utility, business method, or design patent.
Where to begin?
There really is no one-size-fits-all approach here, and you will likely want to pursue some combination of the protections listed here. The strategy you should pursue depends on your competition, assets, market, and how you plan to commercialize your product. A few considerations to help guide you in this process:
- Who are the main players in your market, and what technology do they own?
- What other patents are being filed in your space?
- Are there specific areas in your space where there are opportunities for growth or innovation?
- Which patents will be most valuable for your product?
The earlier in the development process you start thinking about these things, the better positioned your startup will be later on.
Top tips for startup IP
When you’re still in the ideation and development process, it may seem premature to begin considering your IP strategy, but that is often not the case. Start early and maintain and update your IP protections as your product evolves and grows. Finally, and arguably most importantly – hire a lawyer who specializes in startup IP. IP law is complex and burdensome, and a lawyer who specializes in this field is best suited to help you avoid potentially expensive pitfalls and build an effective IP strategy to protect your business.
The information provided does not, and is not intended to, constitute legal advice; all information, content, and materials are for general informational purposes only. As you would with any legal matter, please contact a qualified attorney to obtain advice with respect to protecting intellectual property.