When it comes to intellectual property (IP), you’re probably familiar with things like patents, trademarks, and copyrights. Yet, these are just terms describing how businesses can legally protect certain types of IP.
Though such terms offer a general idea about what IP is, they don’t fully explain how it works. And whether you know it or not, your IP is one of the most important elements of your company—making up roughly 80% of the total value of a typical business. Given this, it’s something you definitely want to understand, value, and protect properly.
This is especially true during the planning and startup phases of your business, when it’s tempting to put off thinking about IP until your operation is fully up and running. But as you’ll see, putting off securing your IP can lead to some major difficulties.
Start at the start
Entrepreneurs need to think about IP from the very beginning. Even when you’re in the planning phase, you need to stay conscious of any IP you create. For example, budding entrepreneurs often wait too long to legally secure one of the most key pieces of IP—their company name.
When considering a name, you’ll first need to check to see if any business similar to yours has already secured the name. You can do this using the U.S. Patent and Trademark Office’s (USPTO) electronic search system. If the name isn’t taken, you don’t have to register it right away, but you should add the ™ symbol each time you use the name in business.
You establish “common law” rights to the name based solely on your use of the trademark, even without registration. Then, once you think the business has a good chance of succeeding, you’ll want to officially register the name with the USPTO and start using the ® symbol alongside of it instead of the ™ . Officially registering the name provides a number of advantages, such as being able to sue for monetary damages against other companies for trademark infringement.
However, if you do use a name that’s already trademarked, the potential financial penalties of an infringement suit are only a fraction of the damage that can result. Think about all of the money that would be wasted on replacing signage and printing. And those costs are nothing compared to price you’ll pay to totally rebrand. Beyond tangible costs, it’s also likely your business’s reputation will face serious harm, which can be incredibly difficult to recover from.
Loose lips sink ships
Another thing you should pay attention to early on is inadvertently leaking your IP to others. This is especially true for technology startups that generate an innovative new idea, but don’t take the time to file a patent or design application.
It’s easy to get so excited about your concept that you end up inadvertently disclosing key facts about your design to a potential competitor before you actually own the IP rights. And though it’s not fun to think about, potential competitors can be almost anyone.
From discussions with friends and other companies you’re collaborating with to unveiling your innovation at trade shows, you should be ever vigilant about giving away too much information about your concept until you actually secure IP protection.
We can help
You can secure IP rights on your own, but having a lawyer like us assist you is often best. This is true not only because the process can be complex, but also in order to save your time and energy for more growth-oriented matters. Meet with us to get started today.
We offer a complete spectrum of legal services for business owners and can help you make the wisest choices on how to deal with your business throughout life and in the event of your death. We also offer you a LIFT Your Life And Business Planning Session, which includes a review of all the legal, insurance, financial, and tax systems you need for your business. Schedule online today.