Five Intellectual Property Mistakes That Will Come Back To Haunt Your Start-Up

Posted on Jul 24 2013 - 12:11am by Kerrin Garripoli

Starting a company is exciting, and it’s easy to get caught up in the fast-paced flurry of activity and creativity that propels a start-up from an big idea to existence. However, while the excitement is a fun part of the process, it’s important not to let it overshadow the legal steps that you should be focusing on in order to ensure long term financial success. A start-up takes time and energy, and losing out on financial success or credit for your work because it wasn’t sufficiently protected under intellectual property law can be detrimental. These are the top five intellectual property mistakes that start-up companies make.


Not protecting the idea from its origin

From the moment that the idea for a start-up is thought up, failure to protect it can lead to its downfall.  Just because you came up with an idea, it doesn’t mean that you own the rights to it. If the concept was created while working for a previous employer, they may be able to lay claim to the intellectual property  if you aren’t careful. An activity as simple as sending an email from your work account or using the employer’s copy machine can give them the rights to it because it originated as part of your work for them. Protection Tip: Use only personal resources while working on your idea. Either work at home, or if you need to access other resources, use a public space such as a school or library.

Emphasizing cost over value

In any business, money is an important concern and the long term financial stability of a company takes careful consideration. Getting caught up in the mistake of letting cost dictate decisions about intellectual property protection rather than the value of the idea to your business can be dangerous, and potentially costly. Choosing to use the lowest cost protection rather than the highest value may mean that the application is denied, ultimately leaving you defenseless and your intellectual property unsecured. Protection Tip: Set a budget and review your applications for protection with an intellectual property attorney that will be able to advise you on the quality of your application and a reasonable budget.

Not seeing the big — global — picture

The internet can be both a blessing and a curse for a start-up. Instead of just protecting your business from local competitors, it’s now vulnerable to IP theft all across the globe as soon as it’s online. With the Madrid protocol, businesses in 80 countries can file for a common trademark in international markets. Protection Tip: Secure your intellectual property in your home country first, and then look into extending it overseas.

Failing to secure (in writing) rights from contractors for ownership of intellectual property

Ideas and technology that your start-up relies on are often not developed completely in-house, or after your business has paid and contracted employees. Relying on contractors and outsourcing development of these projects can be financially beneficial and is a legitimate course of action. However, without a signed contract that addresses the intellectual property rights involved in product development, your business may not have claim to the work of your contractors, and they may have legal ownership of the intellectual property. Protection Tip: Before working with anyone outside your own business, make sure a written agreement is signed that addresses ownership of intellectual property created as a result of working for you. If work has already been started without an agreement, halt it until one is signed.

Public disclosure before securing patent rights

It might seem natural to promote your idea, especially if you get a chance to do it in a prestigious way. However, it can come back to bite you. If your business is developed around a scientific or technology invention or improvement, it’s especially important to protect it. Although publishing a paper on your advancements sounds like a great opportunity for press, it can cause you to forfeit some claim to the intellectual property. In the United States, there is a one year grace period after the idea is disclosed publicly in which you can file for patent protection. However, foreign patent rights usually do not have a grace period and may be lost to you. Protection Tip: Keep an inventory of your creations and the intellectual property rights available for them. Before making public disclosures about your work, ensure that you have secured the proper protection.

Photo Credit: Flickr/Jordanhill School D&T Dept

About the Author

Kerrin Garripoli is a freelance writer for Majux.