The intellectual property portfolio of a startup is, in many cases, the organization’s most valuable intangible asset. It is the essence of the business’s competence and competitiveness in the market. A startup company may lose years of hard work and capital investment by neglecting to file and preserve its patents. Like a tangible asset, IP can be stolen, copied, or used by others illegitimately.

Startups should consider an ironclad strategy to protect their IP. At least four types of IP protection may be available to startups, including trademarks, copyrights, patents, and trade secrets.

Advantages of a Comprehensive IP Strategy

Your startup has a reputation for a unique aspect  of your business. This is your trade secret, which supports your business and brings profitability and competitiveness. You have the opportunity to earn recurring royalties from IP licenses and agreements, and royalty revenue may be an important aspect of IP strategy development.

The reputation your startup enjoys has its basis in IP. It gives your startup its brand image and brand value, eventually making you more profitable by raising the esteem of your company among the stakeholders, including customers and clients.

You enjoy the protection of a legal right to make and sell your products or services only when you have filed a patent for the startup. Your intellectual property works seamlessly as your innovation has already given you the first-mover advantage in your industry. The first-mover advantage leaves your competitor behind even as you have already strategized on your next business approach by the time your competitors catch up. Others may either purchase your innovation for royalties or may eventually imitate your invention, but may not copy and steal it if your patent for a startup has been secured right after you created the model or the innovation.

Yet another advantage of your IP is that it is not exposed to market disturbances or depreciation, as other, physical, assets may be. In fact, the value of your IP may increase over time, depending on its market appeal and the competitive strategies you implement to leverage innovation. This will attract investors ready to contribute funds into your company, often in exchange for a piece of a pie.

If you can create a successful business model out of your innovation, the value of your company will continue to grow, and you may enjoy opportunities for growth through franchising and licensing.

The value of your IP is in direct proportion to its market appeal. Your product may be tangible or intangible, but the value of the associated IP is measurable. It is a kind of property that can be bought and sold in the marketplace for a price. It can be used to access funds as a type of collateral. In case you no longer wish to run your business, you can sell off your IP. With your patent for a startup and IP ownership in your name, you may get priority when you apply for subsidies or government grants.

Develop the Right IP Strategy

The cornerstone of your IP strategy should be protection. However, even before you get the patent for your startup, you need to identify your IP. There are different categories of IP protection relevant to the nature of the intellectual property. You need to determine whether to protect your IP as trade secrets, trademarks, copyrights, or patents. This may be best achieved with the guidance of an expert.

Patent Ownership for Your Startup

It is critical to establish an understanding of your IP ownership details and policies. Do you own the IP alone, or are there others? Investors, owners, and the employees must all be considered when determining who could be the owner or owners of your business’s IP, singly or jointly. In some cases, where the startup’s owners own the company’s IP, one of the partners can quit and start a new business. Further, under some agreements, the company owns the IP developed by the employees. In addition, third parties may develop intellectual products for a company while retaining their stake in the IP. It is critical to develop a patent ownership strategy in order to avoid disputes.

Legal Strategy for the Patent of Startup

A startup’s legal strategy should focus on the creation of a document that clearly defines the role of each of the stakeholders associated with the development or the ownership of the patent. Obligations of confidentiality and non-disclosure agreements should be clearly laid out in the defining document.

There may be one or more IP Laws in your jurisdiction. The best strategy is to use and apply the IP law which is most comprehensive and which includes all possible variations of intellectual property, such as patents, copyrights, trademarks, and the like.

Final Thoughts

Working out the details of a patent for a startup can be a complex process. Yet, patent protection is the sine-qua-non of a successful and fully-protected business. It is recommended to take the help of an expert in development of your business’s IP, portfolios, and strategies.

An excellent resource on the subject is M&B IP Analysts. M&B’s secure online library includes articles on intellectual property, relevant to M&B’s management of the IP activity of high-tech companies. A sound IP strategy should be considered as a pillar of strength for a startup looking forward to sustained growth in a competitive market.