Why Should Startups Care About Intellectual Property?

by Varnum LLP
Contact

Sales…marketing…revenue…getting more customers…growing my company – these are all at the top of the mind of startups and early stage companies and rightfully so, because without revenue, there will be no company. However, often times "intellectual property" is among the last things that an early stage company thinks about…and it shouldn't be.

What is Intellectual Property?

Intellectual property, or "IP", is often misunderstood and confused – to some, everything seems to be protected by a patent, when it may actually be a trademark that applies to the situation or vice versa. The four primary categories of IP – trademarks, copyrights, trade secrets, and patents – are often mistaken for one another.

A trademark or "brand" is anything that helps to identify and distinguish the products or services of one company from another company, such as a name, logo, slogan or tagline. Owning trademarks allows companies to prevent others such as competitors from using the same or a confusingly similar trademark – it can give a company a significant advantage over competitors in the marketplace. To best protect a trademark, companies can register their trademarks with the state and/or federal government.

Copyrights protect many different works of authorship, such as written works and artwork as well as computer software. A copyright generally gives the creator of the original work exclusive ownership rights to reproduce, distribute, and present the work publicly and control how the work is redistributed to the public. Federal copyright registration is not essential for protection, but it can provide many enhanced benefits and advantages.

Patents are exclusive rights granted for an invention or innovation, which grants the patent owner exclusive rights to use or license to another an invention or design. U.S. Patents issued by the U.S. Patent and Trademark Office are typically effective for 20 years and are only enforceable in the United States, but international protection can also be pursued. The two primary types of patents are utility and design patents. Many startups or early stage companies will begin with a provisional patent, which can provide limited protection for up to one year and be used to pursue a "regular patent" thereafter.

A trade secret is any highly confidential information that has great value to a company – it can provide a business with a great advantage over its competitors. Unlike patents, trade secrets can be protected for an unlimited time period provided reasonable precautions and safeguards are maintained. Trade secrets can include business plans, financial information, formulas, and customer lists. Trade secrets can be protected under both state and federal law.

Why Does Intellectual Property Matter to Early Stage Companies?

Intellectual property is among the most important and valuable business assets that a company owns. As innovation and technology is evolving at an accelerated pace, and competition among companies including tech startups is as fierce as ever, intellectual property (and the protection and enforcement of it) is becoming even more important. The filing of patent and trademark registration applications has experienced great growth over the past few years, and more and more early stage companies are awakening to the importance of pursuing intellectual property protection where it's no longer the last thing they think of.

Perhaps think of IP protection as you do about your insurance: For a relatively small amount of money, you can protect your company against a possible catastrophe – the loss of your name, logo, technology, and other valuable IP assets to a competitor in the marketplace. Just as it's not prudent to operate without some type insurance for you and your business, it's imprudent to not take reasonable measures to protect your intellectual property. Protecting your IP should be an essential component of your business plan and budget.

Yes, sales, revenue, marketing, getting more customers, and growing your company are extremely important and should be given great attention. But, without your name and other valuable "IP assets," it's nearly impossible to operate and sustain your company. 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Varnum LLP | Attorney Advertising

Written by:

Varnum LLP
Contact
more
less

Varnum LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.