Startups and IP
It is rightly said that “prevention is better than cure” and that’s why it is said for startups to take reasonable precautions to protect their Intellectual Assets.
This blog is going to emphasize on the common mistakes that most startups make when it comes to the protection of their Intellectual Property. Not a lot of people believe this, but truth be told, Intellectual Property Rights are basically the soul to any business.
What are Intellectual Property or Intellectual Assets?
Just our like we have our tangible assets, like our home or our car, that we want to own legally, as in, have legal rights over them, we must also make it a priority to get the legal ownership of our Intellectual Property. Owning them would give you legal rights over them and that is what we call Intellectual Property Rights. The government makes sure to shield your tangible properties like your house or car, on registering them under your name, in a similar manner, your Intellectual Assets are also secured.
Why are IP Rights important for startups and what mistakes as startups do they make?
Starting a new business is a daunting task, it goes without saying. The initial stages of laying the foundation of your business can a bit challenging. When your business is completely based on a product or service that is absolutely new in the market and meets the public demand, you would desperately want to keep it from getting copied by another company. You would want to create entry barriers for the same product or service from another manufacturer or service provider. You can ensure this regulation from your side only when you have a legal right over your product or service.
When it comes to startups and their IP, many of them fail to recognize the breadth of their potential IP Assets or to appreciate their importance. Or should I write, that they ignore the IP Assets of the products and services of their businesses. Many entrepreneurs feel that they don’t need to put money on protecting their Intellectual Property in the initial stages of business and then without even knowing, they up in a series of inevitable blunder.
Let’s now discuss about the four common mistakes that startups make.
1.Piecemeal Approach
This refers to the attitude of entrepreneurs when they postpone the process for later stages or think of doing it on their own, i.e., apply the “do-it yourself” approach
Most startups do not pay much heed to their IP protection until they think it’s necessary or until the investors ask; a major reason for that is that a lot of money goes after the protection of their IP. Let’s take a hypothetical situation here where you have created a ring mouse and you launch it in the market without getting it protected under IPR. A few weeks later you see the same product being manufactured by another company and cheaper than yours. In a situation you will be helpless as you never legally owned the product anyway, and hence you won’t be able to stop them. This is the explicit reason why investors have started interrogating about your IPR as well. If you have taken the protection, you’ll be able to create a monopoly and will be the only person producing the product.
Many startups also go with the notion that since IP protection is a task that involves a great deal of money, they need not hire IP attorneys and that they can do the procedure on their own. But it will only end up making the situation worse. One must most definitely hire an IP attorney.
Only the companies that prioritize protecting their IP are bound to last for a long time. Not only your product but also your logo, name, slogan, etc. can get stolen if not protected when there is time.
2.Discussing your product or idea with anyone without proper documentation
One must make sure to not discuss about their original ideas with anyone, be it an investor or even their friends, without proper documentation and at the same time, must also keep proper company documentation.
A very common mistake that young startups generally make is that they disclose about the confidential and technical details of their product or service idea without signing a NDA (Non-Disclosure Agreement) with any 3rd party.
In today’s world, it is extremely easy to copy an idea and launch it under a different label. Therefore, before discussing the details of your idea with any 3rd party, even your IP attorney, you must make sure to sign a NDA with them.
If you prefer filing for IP in the later stages but you haven’t maintained all the essential documents of your idea or product, you may end up paying a huge price of losing your IP Assets. Therefore, this is something important to consider.
3.Ignoring IP Practices
A lot of startups are not aware about the IP Rights that are available for their businesses. IP Rights protect different things and, in some cases, cannot be acquired unless specific steps are taken. For instance, if your business is product-based, you have access to getting a patent and a design right. It is extremely important to get the name and logo of your business protected. IP is country-specific, so when you apply in India you will have to apply in some other countries as well to keep your idea safe.
You must make sure, before filing for an IPR on your product or service, to check whether a product or service of the same kind or name already exists in the market. If we talk about trademark, then one must surely check if there is any trademark on the name or logo of their company, and if in case of invention, one must conduct a patent search to avoid winding up in any kind of legal issue.
You should know that taking IP Rights seriously is what makes the best startups and corporate giants so huge.
4.Startups fail to create and implement the right IP strategy
When a startup does its company planning, it makes sure to focus on every possible planning like business plans, financial planning, revenue model, marketing plan, recruitment plans and website, brochure and many such things but forget or fail to plan and execute IP strategy since the start, even when its IP Assets are the most important assets.
I would like to share an example here, for a better understanding, of Apple company. Apple has made sure to keep its IP strategy strong since its beginning and in today’s date, the maximum valuation of the company is held by its IP Assets.
So these were four common and big mistakes which every startup makes; whether you are part of a startup or advising one, these problems are real. But we can always avoid these problems just by taking care of them and understanding the importance of our business IP Assets.
So, if you haven’t already started prioritizing your IP Assets, now is the time.