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.