IP (Intellectual Property) Basics for Start-Ups
Guest Post by: Amanda Rettig, Esq., Murphy & King, PC
In the Boston start-up world we’re seeing an explosion of activity. Taking advantage of market opportunities frequently requires new ventures to move quickly and decisively. A key step not to be overlooked is the implementation of an IP strategy. When done in partnership with a qualified lawyer, such planning and groundwork need not slow a company’s progress and can actually help a company focus its energies productively towards a business model that can have the best possible chance of being successful.
The following is a basic primer.
THREE IP CATEGORIES TO CONSIDER:
Already-created IP – This is any software, invention, name or brand already in development that a founder or participant is bringing to the new venture. The company planning to exploit this IP should ideally own it and such ownership should be reflected in the appropriate assignment agreements. This not only avoids disputes among principals and employees down the road, but will likely be necessary for any venture capital financing or any kind of acquisition of the company if it is a success.
IP created by the venture – This is the IP that is generated by the business of the company or the existence of the venture. It includes the name of the company, its product, any written material generated to support the company’s products or business, and publicity materials. It may also include any systems, processes or tools the company uses to do business. Strategizing with a lawyer at the outset about how the ownership of this material will be structured is key to avoiding a situation where a company is at the mercy of the third-parties to raise licensing costs or make upgrades.
Any third-party IP that the company needs– If there is key third-party technology or content upon which a new venture will rely, securing licenses to that technology or content before a company begins doing business will be instrumental in avoiding disputes and securing more reasonable license fees. An experienced lawyer can help highlight possible pitfalls in this area and develop guidelines to prevent well-meaning employees from taking potentially costly shortcuts in the rush to deliver.
FOUR MAIN FORMS OF IP PROTECTION:
PATENT: Patent protection is for novel inventions and processes of a useful nature. It requires elaborate filings within a precise window of time after invention. Its protection is limited but absolute even against other inventors who independently achieve the same results without any copying.
COPYRIGHT: Copyright covers the exact expression of ideas once they are fixed. It is also limited in time but applies for a longer time than patents.
TRADEMARK: Trademark is available for names or visualizations referring to companies, and also products, services or ideas, but only if the names are not already in use, distinct and not descriptive. Trademark protection can last indefinitely if the trademarked name is protected and the public continues to understand the name as a particular brand. For trademark protection beyond the venture’s narrow geographic area, some basic filings are required.
TRADE SECRET: Trade secret never expires and covers the all of the material in question, but only for so long as the material is kept entirely secret. Once the material is public, the protection is gone. Non-disclosure agreements and safeguarding policies are a must when relying on trade secret protection.