Avoiding Common IP Pitfalls: What Every Startup Needs to Know -

Startup companies often face significant risk and liability with respect to Intellectual Property (IP) on their path to success. The failure to adequately address IP issues can lead to the permanent loss of IP rights and create a litigation risk. Furthermore, insufficient or nonexistent IP protection can hamper business transactions, including seed funding, partnerships, and status as a desirable acquisition target. This article discusses common IP pitfalls and outlines steps that startups can implement to protect IP assets while reducing the risk of litigation.

A. What are IP Assets?

Conceptually, the term “intellectual property” can be thought of as creations of the mind that are given legal rights commonly associated with real or personal property and can have economic value. These property rights are generally a function of federal and/or state laws and include patents, trademarks, copyrights and trade secrets. All businesses have some form of IP that provides a competitive advantage and helps generate profits. Many companies mistakenly believe that patent protection is the only form of IP protection and ignore the value of non-patent IP. However, it is imperative that startups identify patent and non-patent related IP assets when evaluating their IP portfolio. Information describing the various forms of IP (e.g., patents, trademarks, service marks, copyrights, and trade secrets) can be found on the U.S. Patent and Trademark Office website.