How to protect a great startup idea? As an entrepreneur, when you decide to embark on a new business venture that you believe would do successfully in the market. It is important to understand that you would need all the legal help you can possibly get. It is as vital to know the legal nuances surrounding your business as much as you know about financial models or marketing. Once you get the hang of all the possible legal components that come with running a company, you would be much more secure and can avoid all the possible amateur mistake that can likely end your business venture before it even began.
In this article, we will be discussing legal factors like: copyrights, trademarks, and patents, all of which are part of intellectual property. “A trademark involves anything that’s used to identify the product, service, or brand of a company, which includes slogans, logos, names, and symbols. The trademarks that you set for your company are essential assets that allow you to differentiate your business from competitors. A copyright is used to protect creative works made by your company. The most common copyrights involve songs, movies, and music that a company or person creates. For a business, the creative works that you can copyright include promotion and advertisement materials, sales brochures, and instruction manuals. When you own a copyright, you have the ability to control how all of your work is distributed, presented, and reproduced. This content cannot be used without your permission.
As for patents, these are meant to provide protection for inventions or designs that your business has created. When you own a patent, it’s impossible for other companies or individuals to make, use, or sell your product for a specific period of time. Before you focus on the financial and marketing facets of running a business, it’s important that you’re fully aware of how copyrighting, trademarking, and patenting apply to your startup.”[1]
How to copyright you creative work? “When you wish to copyright a creative work belonging to your company, you can apply at the Copyright Office of the Library of Congress via an online registration or a hard-copy registration that you send through the mail. The standard processing time for an electronic registration is around three months. On the other hand, the average processing time for a hard-copy is upwards of 10 months, which is why it’s highly recommended that you apply online. Make sure that you fill out the application correctly if you want the process to be completed quickly. As mentioned earlier, a copyright is meant to last for the life of the author plus 70 years, which means it won’t need to be renewed in your lifetime.
If you find that a person or company has infringed upon your copyright, you will have the ability to open litigation by bringing a copyright infringement lawsuit to federal court. In order for your lawsuit to be effective, it’s important that you can prove that your creative work was copied wholesale or that the main elements of the work were used by someone else. Copyright registration is not necessary for you to be able to bring a lawsuit to court.”[2]
Understanding Trademark: “A brand is a marketing concept that encompasses how people feel about your product or service. Customers associate certain elements with different brands, such as reputation, image, and emotion. For example, a certain brand might have been developed to encourage you to feel confident, calm, or secure. On the other hand, a federal trademark registration can provide nationwide legal protection for your brand in connection with particular goods or services. It is your choice whether to protect your brand under trademark law. Many business owners choose to protect their brand names for their main or dominant goods or services. You might also choose to protect a slogan or logo for those goods or services, if you have one.
Deciding what you want to protect and to what extent is up to you. You can have a brand, but decide not to protect that brand by registering it as a trademark. If you choose not to register your brand as a trademark, however, anyone could misuse your brand or create a brand so similar to yours that people can’t tell the difference between them. So, even if consumers want to purchase your products or services because they trust your brand’s reputation, that customer might purchase someone else’s by mistake because they can’t tell the difference between the trademarks.”[3]
Common IP Mistakes Startups Make[4]
- “Undervaluing intellectual property. IP often is not considered equally when it comes to products, business strategies, and marketing plans. In reality, your startup’s IP is likely the most valuable intangible asset your company has. IP isn’t only a legal issue. In fact, IP accounts for a larger percentage of a company’s value the more successful a company is. For example, for companies on the S&P 500, IP accounts for up to 90 percent of their value.
- Not creating an IP strategy. Just as you would with the marketing, supply chain, and financial aspects of your startup, you need to develop an IP plan. Without an IP plan, you expose your intangible assets to expensive infringement lawsuits in the future, which few startups would be able to withstand. A solid IP plan should include what IP assets you have, how and when you plan to protect those assets, and how you will protect your startup from being sued over IP.
- Not keeping the creators communicating with the decision makers. As your startup grows, you’ll eventually reach the point where the people who are creating your intellectual property are separate from the people who make strategic decisions about how to protect it. For example, your team of engineers who invent will differ from your legal team and executive team. Make sure your creators and deciders stay in touch. The people in charge of safeguarding your IP can’t protect what they don’t know about or don’t understand.
- Not protecting confidentiality. One type of potentially valuable IP to startups is the trade secret. A trade secret is only protected if it stays what its name implies: a secret. For example, only two employees know the recipe for Coca-Cola, a protected trade secret, and the recipe itself remains in a vault in Atlanta, Georgia. Confidentiality can be equally important in developing inventions and writing patents. To avoid breaches of your confidentiality, make sure you have employees, partners, and suppliers sign non-disclosure agreements (NDAs). You’ll also want to password-protect all computers, limit which employees have access to certain information, and limit the type of information employees can access on personal devices.
- Failing to do a trademark search. Before you begin using a trademark or business name, make sure you do a thorough search to see if that mark or name is already in use. You can use a free tool through the USPTO’s office called the Trademark Electronic Search System (TESS). If you don’t take this step before you start building a brand and associating it with that mark or name, you’ll lose your investment in that IP if you find out after the fact that you’re infringing on a trademark from another individual or company. A TESS search will let you know early on if your mark is infringing, keeping your losses minimal and preventing you from reworks.”[5]
If you are an aspiring entrepreneur, and you do not know how to go about protecting your business, go through our Intellectual Property Archives – Layman Litigation at Layman Litigation’s website, or contact us. Our team of legal experts enjoys decades of combined experience in intellectual property law and in the broad spectrum of domestic and international law that your startup likely needs.
[1] A Startup's Guide to Copyrighting, Trademarking, and Patenting (universitylabpartners.org) [2] Ibid. [3] Trademark, patent, or copyright | USPTO [4] Below mentioned points retrieved from: Intellectual Property for Startups: Everything You Need to Know (upcounsel.com) [5] Intellectual Property for Startups: Everything You Need to Know (upcounsel.com)
