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Dos and Don’ts of IP Protection for Tech Startups.

November 17, 2021

The startup launch is a thrilling time for tech entrepreneurs. It is crucial to have a solid legal foundation to protect your IP and technology innovation as you embark on this journey. Unfortunately, many tech startups fail to realize how important an effective IP strategy can be in generating revenue and commercial success. These are the top do’s and don’ts for tech startups to protect their IP.

1. Avoid public disclosure of your invention.

A tech startup can be exposed to the public about your invention. However, tech startups need to be cautious about disclosing their innovation to the public.

Avoid Research and Development in the Open.

With the rise of co-working spaces, it is essential to avoid conducting research and development in the open. Many developers don’t realize that R&D done in the open can lead to loss of patent protection in many countries. Although the United States allows a one-year grace period to file for patent protection, it’s best to avoid public R&D.

Do not discuss future innovations plans.

Even after a startup file a patent application, it’s essential to keep discussions or presentations on the subject matter. Future innovations can be discussed in brainstorming sessions, but this could be considered a public disclosure and prevent patent protection. This undesirable outcome can be avoided by tech startups simply refusing to participate in future innovation discussions. You can state if asked that a patent application has been filed to protect the invention. Once it is filed, you will be glad to discuss it.

Don’t Announce Your Innovation Too Soon.

Tech entrepreneurs often risk revealing their innovations too soon, especially when meeting with potential investors. To protect its IP, a tech startup must file its innovation with the USPTO immediately, preferably before investors’ meetings.

 2. Know which IP type offers the best protection.

A tech startup must be familiar with the protections provided by various IP options before embarking on any IP strategy. I can generally be classified as one of these:

  • A patent protects your idea.
  • Copyright protects the expression of ideas and requires memorialization in a tangible medium.
  • Trademark protects the name or logo and acts as an identifier for the origin of the products or services associated with it.
  • Trade Secret protects any proprietary or confidential information.

Tech startups must first understand the intangible assets they want to protect and choose which IP regime to use. For example, it is essential to decide whether to pursue a patent strategy or trade secret protection if the goal is to protect an innovative concept. Each type of IP is unique, so pursuing the wrong IP can put your product at risk. It is best to consult an IP attorney.

3. Ensure that proper IP agreements are in place.

These are IP agreements every tech startup should think about putting in.

IP Assignment.

Venture capitalists often look to the value of a company’s IP portfolio as a way to attract capital. All relevant IP should be assigned immediately after incorporation or formation to ensure that the company owns all IP assets. This will ensure that all IP assets are with the company and prevent IP from being transferred to another competitor or licensed by disgruntled employees.

Contractor Agreements

When using vendors or contractors, it is essential to include a clause in the agreement that will assign any IP created during their engagement to the company and any IP related to that engagement. Software code, graphics, and logos are all possible IP. It is essential to sign the agreement as soon as the contractor or vendor is hired. Startups should always use agreements with third parties to ensure that they have all contracts with the same terms.

Customer Agreements

All written agreements that affect the ownership or confidentiality of your IP are essential. These agreements include those that document your sales to customers. Customer agreements are subject to the same IP ownership issues that vendor agreements. It would also be wise to get customers to agree to any modification, improvement, or change to the IP they use.

Employment Agreement With Invention Assignment Clause.

This clause states that the condition of employment requires that all work performed within the scope and responsibility of the employee’s employment be assigned to the company. The assignment clause in the employment agreement protects the company from losing the IP if the employee leaves before the agreement is executed.

These IP agreements will make it easier for the startup to avoid the most common legal pitfalls and position the company for future growth, investment, and long-term success.

 4. Ensure your domain name and trademark are accessible.

Tech startups need to ensure that domain names are available immediately before they consider trademarking the product. This will ensure that you make the most of your marketing dollars, time, and effort. In addition, tech startups should consider both the trademark and domain name. A trademark that is not readily associated with your product or domain name can be a problem.

A clearance study is essential before you spend resources on a branding campaign. It would be costly and regrettable if you found out later that a competitor has the same trademark for an app similar to yours.