Navigating Startup Intellectual Property
If you’ve ever watched HBO’s Silicon Valley you’ve likely heard quite a bit about Intellectual Property (IP) and what it all means. But the big question is how can your startup tap the value associated with something intangible, like IP? Structuring an IP strategy can be an intimidating task, yet protecting it is vital to attract funding and partnerships as well as for defense against competitors and infringement claims. Aligning IP strategy with a business’s needs can be left for lawyers or other third parties, but this isn’t always feasible for small businesses. Below is a guide for you to reference when getting ready to set a strategy in place for protecting your IP.
First things first! Your company name and internet domain name represent intellectual property, and they should match as closely as possible, especially in representing your brand and products. Incorporating your startup as a LLC or corporation is around $100 in most states.
The United States patent system is based on a first-come-first-served, first-inventor-to-file system, so getting patents should be done quickly and very early on in a company’s life. Patents protect rights related to technological innovation, and in order to file for one, your product or service should be new, a bit obscure, and you have to explain in great detail exactly how you did it – so keep notes! There’s a one year grace period in the U.S. from debuting an invention to filing for a patent, but this period doesn’t hold true in many other countries, so be aware for any international IP rights you might want and need. As your startup matures into adolescence and adulthood, it’s a good idea to file each additional feature of your product or service for a patent, and as soon as you can. Oh, price is something to pay attention to too, and filing for patents can be pricey, but luckily the U.S. Patent and Trademark Office has reduced fees for small businesses, and the costs can also be spread out over multiple years. Phew! It typically takes around two years for a patent to be granted (and beware that some don’t make it through at all), so you should definitely focus on developing your business in the meantime. Having that ‘patented’ or ‘patent pending’ label helps secure funding and convinces competitors to take a different path with their concepts — so slap it on your product or service as soon as you get it!
Another piece of IP is trademarks, which are words, symbols, or designs that differentiate your products or services from competitors. Think of McDonalds’ golden arches, which has almost subconsciously helped everyone in the world identify them, that’s a trademark. The process to file for trademarks doesn’t take as long as it does for patents, but you should still be as proactive as possible and start early. Creating a design to represent your company can be fun and will help customers identify your business — and of course you want to be as identifiable as those golden arches someday! Another perk of trademarks is that, unlike patents, they don’t expire, as long as you keep using them.
Copyright denies others the use of unauthorized copying of someone’s material, and protects the expression of ideas rather than the ideas themselves. It must be original for something to be under copyright. For example, George Lucas could copyright Star Wars, but he couldn’t copyright a scenario with characters in space.
This form of IP contains any confidential information — secrets! — that a business uses for a competitive advantage, such as pricing data, forecasts, business plans, search algorithms, employee knowledge, sales and distribution methods, and customer profiles. The unauthorized use of these secrets is a violation, a big no-no. The protection of trade secrets is specific to individual cases, but some of the unfair practices that you’ve heard of include espionage (not cool like James Bond though) and breach of confidence.
Obviously these IP terms and definitions are good to know so you can gain some perks of privacy and identifiability, avoid trouble, and also spot trouble if you see it!