IP Plan- What Every Startup Needs To Know Part 3

By Debby Winters

Startups, from conception, need to determine several things about their intellectual property (IP) including (1) the role that IP will play in their business, (2) the IP tools that support their business model, and (3) their overall IP strategy. In many cases, a startup’s intangible assets may be the only assets and failure to fully consider IP during launch is the source of many missteps and oversights. In contrast, a well-structured IP strategy or plan is a proactive step toward seed funding and avoiding loss of IP assets, while minimizing the risk of third-party IP infringement.

A good IP plan should identify existing and future IP assets; provide a strategy for maintaining and protecting these assets; outline a strategy for conducting freedom-to-operate searches; and establish an IP-related budget. The initial step of identifying existing and future IP is critical as it can help the startup develop a plan for allocation of resources and capital to support the IP assets. Importantly, the information can be cross-referenced against the startup’s business and product development plans to develop, maintain, protect, and leverage IP assets. For example, if the IP assets include trade secrets, the IP plan should include procedures to protect the information such as the proper marking of the documents, establishing check-in/out procedures, limiting access to documents, and storing the documents in a secure facility or network section.

The IP strategy should also include a plan for periodic review of all agreements that relate to the IP to ensure all necessary legal IP safeguards are in place for new and departing employees, consultants, developers, and contractors. It is common to review the license agreements, but many times employment agreements, independent contractor agreements, and nondisclosure agreement are overlooked. This is unfortunate since employees, contractors, consultants, and developers can know many secret IP details that you want to keep a secret or protectable.

Equally as important to the IP plan is that it needs to be continually reviewed and revised as the business evolves. Finally, although a strategically thought out IP plan may include a business’s conscious decision not to pursue registered IP rights, oversight resulting in failure to protect these IP rights can be devastating.

Next time we will discuss the potential failure to establish clear IP ownership.

 

 

What Every Startup Needs To Know: IP Pitfalls- Part One

By Debby Winters

On their path to success startup companies often face significant risk and liability with respect to Intellectual Property (IP). The failure to adequately address IP issues can potentially lead to the permanent loss of these rights and could possibly create a litigation risk. Insufficient or nonexistent IP protection can also hamper business transactions, including seed funding and status as a desirable acquisition target.

In a series of blogs, we will look at some of the common IP pitfalls startups face and possible steps that startups can take to avoid those pitfalls and protect their valuable IP assets while at the same time reducing the risk of litigation.

Let’s start out by defining what an IP asset is.

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. These rights can and do have real economic value. These property rights are generally a result of either federal and/or state laws and include the commonly understood rights belonging to 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, startups should identify both patent and non-patent related IP assets when evaluating their IP portfolio.

Startups, no matter whether small or large, should develop an IP plan. This IP plan should identify both existing and future IP assets. In the next of this series, we will talk more about the IP plan; what it should include and how to put it together. Stay tuned!