Christopher Heer is an intellectual property lawyer, registered patent agent, registered trademark agent, and principal at Heer Law. He is designated by the Law Society of Ontario as a certified specialist in patent law.
Startups have a lot of complex obstacles to overcome as they take their first steps into the commercial market. Many of these can prove to be a challenge for decision makers if it is their debut at the helm of a fledgling business.
While most startups seek to minimize costs while they are still pre-revenue, protecting your intellectual property (IP) is an area that must be given attention in the earliest stages of the business or else you may permanently limit your startup’s potential.
Here’s an overview of what you need to know about IP if you’re a startup so you can prevent your innovations and creative works from being exploited by rivals.
Why IP Is Essential
Intellectual property is the lifeblood of any startup which is looking to disrupt the marketplace with some truly groundbreaking concepts, so you want to make sure that you have ownership over what you create from day one.
First, you need to look internally, ensuring that the people working for or with your startup are legally bound to assign the intellectual property in what they create for your business to your business either through employment contracts or other types of agreements that contain IP assignment provisions.
Next, you need to consider how to best protect your proprietary IP from third parties, which could include keeping your IP confidential, or filing patent, trademark, copyright and/or industrial design applications to obtain exclusive legal rights enforceable against third parties that use your IP without your consent.
If you do not take IP protection seriously, your startup will miss its opportunity to fully capture the commercial value of the sweat equity investment of its founders. And while it is certainly possible to prepare and file patent, trademark, design and copyright applications yourself, to make sure everything is done right it’s best to get expert advice and guidance from IP professionals (like Heer Law) rather than attempting to navigate the application process yourself.
Types of IP to Consider
There are a number of different forms of IP protection available. The five main types you should consider are: patent, trademark, copyright, industrial design and confidential information/trade secret.
Obtaining patent protection involves a longer and more costly application process than other forms of IP rights, but for technology startups patents will typically be the company’s most valuable IP assets. Patents will also be what larger organizations seeking to acquire your startup will look for to assign value; because if there aren’t effective patents that block them they will be free to copy your technology without acquiring or otherwise investing in your business.
You should also think through which jurisdictions to seek patent protection in. Most startups choose to file a patent application in the United States due to the size of the U.S. market. However, protection in other jurisdictions can also be useful, including the startup’s home jurisdiction and other key jurisdictions in which the business hopes to generate a meaningful share of its profits.
Trademarks are about protecting the reputation associated with the business or its products or services. The marks to protect can include the startup’s trade name, logo, and the names and logos used in association with the products and services offered by the business. Registering your trademarks makes it much easier to enforce your trademark rights against others using the same or confusingly similar marks with competing goods and services. Consequently, registration also makes your trademark rights more likely to be respected by others.
Next is copyright protection, which in most cases is provided by law automatically upon creation of an original work and can cover all types of original literary, artistic, dramatic or musical works.
It is best to register copyright with the Canadian Intellectual Property Office (and/or other intellectual property offices) if you believe infringement of the work is likely once it is made publicly available and you intend to enforce your rights against infringers.
Industrial design protection is another form of IP protection, and one that is concerned with how things look. Industrial design registrations protect the visual features of shape, configuration, pattern or ornament, as applied to a product. For example, industrial design registrations can protect the shape of a chair, a wallpaper pattern, the shape of a bottle, or the decoration on a t-shirt.
Finally, you should consider how your confidential information and trade secrets are handled, and whether you have internal processes to prevent unintentional disclosure as well as confidentiality provisions in employment agreements and agreements with outside parties working with you to ensure that mission-critical information and practices that define your startup are not misappropriated by rivals.
Important Strategies to Adopt
When it comes to your startup’s IP, there are likely multiple forms of IP protection available. The types to use will vary according to the products and services you are developing and the industry your organization occupies.
Whatever the case, it is necessary to first understand what options are available for protecting your IP and then design a strategy for how you will proceed. Your IP strategy should be built to maximize the value of your business over the long term, notwithstanding the near-term costs.
As a final point, consider seeking the assistance of a qualified IP professional to help ensure that you don’t miss or misfire on any opportunities to turn your startup’s intellectual property into valuable IP assets.