Intellectual property (IP) is the untapped potential of a business that, if left unharnessed, is completely wasted, but when properly managed can be a goldmine. Yet time and again startups and entrepreneurs, despite having a basic understanding of IP, tend to avoid creating an effective IP strategy. An average startup with financial constraints will not prioritize IP protection in the belief that its resources are better spent elsewhere on more concrete and tangible goals such as sales, product development, and expansion. But just because a lot of IP is intangible does not mean its value is any less important. If anything, the present economy values it more. A good IP strategy for startups goes a long way towards longevity and success in the marketplace.
Technology companies acquired for millions of dollars are made up predominantly of intellectual property. But if a substantially increased valuation (provided by IP) is not incentive enough to invest the amount of time and money necessary, then prepare to be pleased. For hereinafter lies an easy to follow, 10-step guide that will ensure you leverage the absolute most out of your IP without pulling your hair out. By following the 10, IP management best practices you will be on the road to managing a more robust business.
First and foremost, map that intellectual goodness! You cannot build a house without a blueprint. The same principle applies to IP; you cannot continue to grow your business and protect it without first identifying your IP. Anything you or your employees create may be eligible for protection, so when in doubt discuss it with an IP attorney. An inexpensive alternative would be to use Traklight’s ID your IP tool that will create a personalized report listing all the potential IP you own and how you can secure it.
Now that you have a better understanding of the type of the IP you own, you must decide what protection best suits it, keeping business goals in mind. Registering all IP may not be the best use of resources and for small to medium-sized business, it is important to prioritize expenditures. Legal protection for intellectual property comes in various forms and you are the best judge of what type best suits your vision.
A common mistake made by entrepreneurs and startups after registering their IP is that they tend to forget about it. But as a business expands, IP protocols in place may not be adequate to handle the changing landscape. Furthermore, some forms of IP may require renewal additional documentation. IP protection is like running a farm: stop taking care of the crop and livestock, and next thing you know someone’s burnt the barn down and stolen the sheep!
Unless you are Chuck Norris, you need people. And so does your business. Not everyone is well versed in the intricate art of IP, so it is important to educate your teammates and employees on the importance of IP protection and how to interact with third parties to ensure no IP is lost or unwittingly disclosed without safeguards.
In the startup community people tend to bounce from one project to the next in a matter of months. As such divulging confidential information without contractual constraints on their disclosure can ruin any competitive advantage your business has. Limit access to information on a need to know basis to prevent loss of IP.
There is no better way to guarantee your IP remains yours than by leading all business affairs with contracts specifying and protecting your IP rights. Always make sure each employee signs an employment agreement with non-compete, non-disclosure, and discovery clauses nestled in. Any third party interaction where confidential information may be divulged should be preceded by a non-disclosure agreement (NDA).
Great businesses are constantly innovating to continue to stay relevant. It is important for an employer to ensure their employees are disclosing any new IP they create and that the employee understands the IP belongs to the business. Make certain that employment agreements includes an assignment of IP and that disclosure of the same is mandatory.
They say IP audits are the Swiss-army knives of the IP world. And by ‘they’ I mean ‘I’. Not only does a well-prepared audit shed light on an existing IP portfolio and any change required to the IP, but it also helps formulate a plan to organize a business for future challenges by predicting IP relevance based on competitors’ portfolios and avoidance strategies to protect against legal disputes.
This is easier said than done. No idealistic entrepreneur or startup would willingly violate the intellectual work product of someone else, something they themselves value so much. But without a proper understanding of IP, it is easy to infringe on someone else’s rights without even realizing you are doing so. Intellectual property theft is a very real concern, and even if you are unaware the damage suffered is the same. This can be prevented by adhering to a strict protocol of checking any and all materials used, seeking licenses, and asking permission where necessary.
Now that you have managed and leveraged the maximum benefit out of your IP, your business is on firmer ground. But the increased valuation is for naught if it does not help towards investment, transfer or sale of IP, or conducting business with a third party. Before parting with capital, corporations and investors want to be certain they are getting what they paid for and as such conduct due diligence. Be prepared to have all necessary paperwork such as patent and trademark registrations, employment contracts, non-disclosure agreements, and other pertinent documents ready for inspection. Storing all your documentation in Traklight’s IP Vault streamlines the process.
Follow this ten part series where we will provide in depth information on how to achieve these intellectual property best practices. In the meantime, check out how to identify your IP with ID your IP.
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