Innovation is at the core of startup success. As a startup founder, protecting your unique ideas, products, and technologies is crucial to maintaining a competitive edge and ensuring long-term growth. Intellectual Property Rights (IPR) and patents are essential to safeguard your business’s valuable assets. Below is a step-by-step guide to help you navigate the complexities of IPR and patent protection.
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Why Intellectual Property Rights (IPR) and Patent Protection for Startup?
If your startup or early-stage business has IPR, you can:
- Put the world on notice that you own those rig
- Register them with the U.S. Copyright Office or the U.S. Patent and Trademark Office (USPTO), and by using the “Patent Pending” or “Patented” status.
- Prevent unauthorized third parties (infringers) from unfairly competing with you by reproducing your patented products and services.
- Use your IPR to generate revenue by
- (a) directly selling patented products and services or
- (b) licensing your patents to others in exchange for royalties.
- Build strategic joint ventures and alliances with other companies to develop and sell new products and services. You can combine your IPR with intellectual property owned by your partners or use their existing services with your patented innovation.
Steps for Intellectual Property Rights (IPR) and Patent Protection for Startups
Market Analysis
Any new business venture should always be to create something that will fill a market need and make your customers happy. You must also establish and ensure this is the right path. To do this successfully, a founder must consider the following ten questions:
- What is the market for this product, and is there a need for your product in the market?
- Who will buy your product, and are your financial goals feasible?
- How did previous solutions solve these problems – were those successful approaches part of any larger strategy?
- Is it a consumer product?
- How are you going to sell the product?
- How are you going to manufacture it? Is the product manufacturably scalable?
- How much will the customers be willing to pay?
- Who are the competitors? Do they have similar products available that might compete against yours? What makes ours different enough so people would buy from us instead?
- Will you need to raise money? If yes, how much money, from whom, and how will you do so? Finally, how much equity are you willing to give up?
- Will you need a team? If yes, what skill do you need to hire? Will they be employees or partners?
Patentability
Identify patentable aspects of your invention. Protect your future hard work by making a comprehensive list of your ideas, inventions, or new product concepts (or improvements) that you think could be valuable to others. Then, file for patents before someone else does. Your patent lawyer will help you find what aspects of your invention can be patented and will process.
Avoid Enabling Public Disclosure (EPD)
The clock starts running once the inventor has “publicly disclosed” your invention. This means you should consider how quickly your company can file a patent application with the USPTO before taking any other actions that might lead to public disclosure. USPTO considers any public disclosure, including trade shows, demos to potential investors, press releases, any paper or online publications, etc. Even if the public disclosure is by another person with whom you discussed your idea, it could harm your patent rights.
Therefore, if you think your invention is patentable, avoid publicly disclosing it before talking to a patent lawyer and filing an application. A public disclosure (telling people about the idea in sufficient detail so they could use it) that predates this can harm your ability to get a patent and protect your invention from being stolen.
Build a Team
After deciding on the marketability of your product, you must select a team. Besides aligning skill needs, you must also line up the brand and motivational needs. Therefore, consider your purpose, passion, and story; ensure these match your team members. While determining each team member’s role, you must consider who owns what. This clarity is most important and as easy as possible during your company’s development.
At this stage, it is crucial to understand that Trade secrets remain valuable only as long as they are secrets. Although Trade Secret protection costs almost nothing to maintain and prevents access by those who “need to know,” it is even cheaper for others to steal them. The last thing you want is to develop a product only to find that one of your associates stole your technology and idea. Still, you can protect your Trade Secrets through Non-Disclosure Agreements (NDA) that limit the amount of information available for viewing or distribution within your business enterprise. Ensuring that you or your company owns the intellectual property is essential. Thus, it is best to protect all your intellectual properties through several legal methods, including patents, NDAs, etc.
Who owns the patents?
Make Agreements with Your Co-Founders From the Beginning
With more than one founder, it is vital to agree on the terms of the relationship with each co-founder from the company’s onset. The agreement must be clearly defined in writing and applies to several important issues at the company’s inception. These issues include:
What percentage of the company will each co-founder own?
The roles and responsibilities of each co-founder may consist of time, effort, skills, investments, etc.
What salaries will each founder receive when money becomes available from investors or sales?
Determine who the inventor for each invention aspect on a claim basis.
Each co-founder should assign all of the intellectual properties to the company.
What happens to your intellectual properties if a co-founder leaves or the company is dissolved?
What rights will the co-founders have for each co-founder’s future inventions?
Remember, intellectual property is an asset of the company, just like any other tangible asset, such as real estate. Should the company dissolve, the company’s assets will either be sold or transferred to all co-founders according to a written agreement. If co-founders decide to separate or dissolve the startup, they must decide whether to retain ownership based on the aforementioned written agreement. Otherwise, the IP will be sold like other assets. You also want to ensure that the co-founders and any contributors release the IP associated with the work done to the company. Otherwise, the risk is that IP will be related to the individuals, not the startup.
Patent Ownership Checklist
Patent ownership comes in two flavors: present ownership and future ownership.
The things to check:
- Does the company own every patent asset?
- Are any of the patents encumbered?
- Who owns inventions created by employees?
- Who owns inventions created by the founders?
Check Patent Ownership at the USPTO
When the assignment documents are filed with the USPTO, a company owns its patents. Remember that patent assignments are public records; you can find them here. https://assignment.uspto.gov/patent/index.html#/patent/search.
Protect Your Intellectual Property Rights (IPR) From Employees and Contractors
Protect Your Intellectual Property Rights (IPR) From Employees and Contractors
To prevent employees and consultants who work for your company from stealing your valuable IP assets and disclosing them to competitors (or starting their businesses to compete with you), you’ll need them to sign NDAs to keep company information confidential, that is, not disclose company information to third parties. In addition, the agreements should expressly state – that all rights to the inventions are automatically transferred to and owned by your company while they work for your company.
Intellectual Property Rights (IPR) and Patent Protection from Investors
If you pitch your startup to potential investors to raise money, you must disclose at least some of your proprietary information to them. So, to avoid any loss of your IP rights, be sure to:
- Keep careful records of exactly who has been given access to your private placement memo, business plan, or slide presentations, and ask the potential investors to
- (a) confirm in writing, through non-disclosure agreements (NDAs), that they will not copy or share such materials with others, and
- (b) return or destroy all paper and electronic copies of the materials if they decide not to invest.
- Distribute paper or electronic copies of your investor materials to a limited number of pre-screened potential investors and their advisors. The fewer copies in circulation, the better.
Consequences of an Underdeveloped Intellectual Property Rights (IPR) and Patent Protection
Not having an IPR strategy could lead to severe detrimental consequences. Even promising startups can waste money on product development without good patent protection, which could cause their failure. Often, unpatented innovation and unprotected patent assignments can result in disputes among co-founders and failure. Neglecting this area could lead to wasted funds, even legal conflicts between founders, investors, employees, etc., eventually triggering failure. Therefore, if you want your startup to be successful in the long term, consider patent protection and know that your IP-related decisions will affect future success.
Key Takeaways For Every Startup Founder Needs to Know
- Learning to protect your intellectual property is critical: your company’s success or failure may depend on it.
- Patents on your device, methods of making or using, and even designs may drive revenue and add to your company’s valuation.
- Company secrets are only valuable if they remain secret; take steps to protect them.
- Your IP may seem intangible, but it’s likely among the most valuable assets in your arsenal.
Frequently Asked Questions
Why is Intellectual Property (IP) protection important for startups?
Protecting your intellectual property is essential for maintaining a competitive edge, attracting investors, and preventing others from copying or profiting from your innovations.
When should a startup file for a patent?
Startups should consider filing for a patent as soon as an invention is finalized and before any public disclosure to ensure they secure their rights and maintain the ability to protect their innovations.
What are the risks of not having a solid IP strategy for a startup?
Without a robust IP strategy, startups risk losing their competitive advantage, facing legal disputes, and potentially failing due to the inability to protect their innovations from being copied or stolen.
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Affordable Patent Agency
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As a startup founder, understanding and protecting your Intellectual Property Rights (IPR) and patents is critical to your business’s success. Our comprehensive guide walks you through the essential steps to safeguard your innovations, from identifying patentable aspects of your invention to filing patent applications and securing global protection. By partnering with Affordable Patent Agency, you gain access to expert guidance, ensuring that your valuable ideas are well-protected, enabling your startup to thrive and succeed in a competitive market. Don’t leave your IP to chance—secure your future with Affordable Patent Agency today.
However, please check their credentials with USPTO here.
Intellectual Property Rights and patents are indispensable assets for any startup looking to secure its innovations and achieve sustainable growth. By following this step-by-step guide, you’ll be better equipped to protect your startup’s unique ideas and position your business for long-term success. At Affordable Patent Agency, we’re here to help you navigate every step of the IP journey, ensuring your innovations receive the protection they deserve.
An initial meeting can be 30 minutes to an hour. During this meeting, you will discuss your invention so that we have all relevant information; this includes details of your invention, previous patents, where you are in your business plan, etc. Most patent attorneys bill $495 per hour, but we offer a free initial consultation. So call us for a free initial consultation.
Affordable Patent Agency, LLC
4131 N. Central Expressway Suite 900, Dallas, TX 75204
(855) 444-1946
