Companies are often created because the founders have a concept they think will take hold. Sometimes, the founders believe the concept is novel, can be protected, and can result in considerable value. For an emerging business, this Intellectual Property (IP) can be the most important asset the business has and can be the difference between success and failure. In this article, we describe the most important IP issues a startup or emerging business has to consider, focusing on patents and trademarks.
1. Search to make sure you aren’t reinventing something someone already invented and has protected. These days, new startups spring up all the time. Many believe they have better ways of solving known problems. Sometimes, someone else unknown to the startup, solved the same problem in a similar way. When others protect their designs, implementations, or names first, they may own Intellectual Property rights, and you could be infringing on those rights. It is critical to longevity of a business to be sure the business has freedom to operate. To do so, it is often well worth the investment to engage a professional, such as a patent attorney, and obtain a prior art and/or name search to be sure you have the freedom to operate as you would like, and to do so BEFORE you begin to invest heavily in a solution.
What happens if a search comes back negatively? You have several options; first, come up with an even better and different solution which might not have been protected. It could be that the new and improved version has even more long term value. Alternatively, you can approach the owner of the intellectual property for a license. That way, the originator obtains some benefit and you can move ahead with your plans and expand the innovativeness.
2. File for patents as early as you can. Patents can become extremely valuable assets for a company, particularly early in the company’s life when the company is new and has not yet developed assets which provide value. Patents and patent applications can serve this purpose, enhance investment opportunities and serve as collateral for financing.
Timing for filing for patent protection is important. Newer companies need to understand that they have to file for a patent before they release their product so as to protect worldwide rights, because some countries do not allow for a patent if the application is made only after the product is publicly disclosed.
To save early expense, companies can file provisional patent applications in the U.S. and still preserve their worldwide rights. Provisional applications are simpler to prepare, the fees are less than for non-provisional or formal applications, and once filed you can use the term “patent pending” right away. The main ingredient to a provisional patent application is that the application must describe the invention in such a way that a person “of ordinary skill in the art” could replicate the invention from the description.
3. Choose and use branding carefully. Name recognition is important. New companies use branding, such as names and logos, to distinguish their products and services. Importantly, the branding cannot be confusingly similar to other companies’ brands. Searches can help identify whether proposed brand assets meet this requirement.
Trademark protection is based on the adage “first in time, first in right” and applies to a category of goods or services as well as geographic use. Once selected, the name or logo can be registered with the United States Patent and Trademark Office.
Registration effectively locks in the name nationwide for those goods or services.
4. Keep protecting innovation as innovation continues to occur. In this fast-moving age of disruptive technology, innovations happen frequently and throughout the world. Numerous people and companies worldwide are often trying to solve the same problem at the same time. When multiple parties solve the same problem the same way, in the United States, only the first to file a patent application is entitled to patent protection.
Products evolve during the early stages of a company and innovation continues. For example, new features are introduced over time. The business importance of one or more of these features could grow over time and become even more important than the original offering. As such, it is important to file patent applications directed to those features, in addition to previously filed applications, timed to be filed before public disclosure of the features.
5. Don’t be shy about your filings. Once you have filed for patent protection and/or trademark registration, it is your responsibility to police your rights. As a start, it is important to let the world know that you have a pending patent on your invention by using the term “Patent Pending” when marketing the product which includes the subject of a patent application.
Similarly, before a trademark registration issues, use the “TM” designation next to the product identifier. Once the registration issues, use the R in the circle (®) to show you have a registered trademark.
Also, if you encounter others with similar implementations, it is important to alert them to the existence of your patent application as soon as possible. If there are potential infringements, it is beneficial to establish a notification date, which can come into play in the event you are entitled to damages. Of course, you can also license your technology to them, so this process may result in a new revenue stream for you as well.