By: John Thomas and Jeremy Harrison
Obtaining and securing intellectual property (IP) rights is often not a high priority with startup companies. Rather, startups commonly focus most efforts on obtaining financing, building a brand, and effective marketing strategies.
Securing company IP, however, such as patents, trade secrets, trademarks, and copyrights, is vital since doing so creates a legal barrier to competition. Company IP can be a revenue generator through strategic licensing or IP transfer, and is often crucial in valuation for venture funding purposes.
The following are some tips and strategies for startups to manage company IP.
Patents
Pursuing and maintaining patent protection requires a considerable capital investment. The cost to obtain a U.S. utility patent is roughly $20,000, and sizeable maintenance fees are periodically required to keep an issued patent enforceable. Thus, pursuing a patent should be approached proactively and with caution.
In addition to U.S. utility patents, design patents should also be considered. Design patents protect the ornamental appearance of an article of manufacture. The subject matter of a design patent application often relates to:
> The configuration or shape of an article.
> The surface ornamentation applied to an article.
> The combination of configuration and surface ornamentation.
Any person who has invented a new, original and ornamental design for an article of manufacture is entitled to apply for a design patent. A design patent differs from a utility patent in that the design patent only protects the appearance of the article and not structural or utilitarian features. Design patents in the U.S. do not have maintenance fees and typically cost considerably less that utility patents.
1. Undertake a patent prior to art search
For key technologies, it is a good idea to conduct a prior art search before investing in the patenting process. A properly conducted search will identify patents, patent publications, and non-patent literature closely associated with the technology. The search can also identify potential competitors and infringement risks. Decision makers can then intelligently focus continued related research and development and draft patent application claims that avoid identified prior art.
2. Do not prematurely disclose
Unless a patent application is on file, foreign patent rights are immediately lost once an invention is publicly disclosed. In the U.S., a one year “grace period” following a public disclosure is generally available, but a patent application must be filed within 12 months to retain patent rights. If an invention must be disclosed, make sure to have proper confidentiality and/or non-disclosure agreements in place, which transform the disclosure into a non-public disclosure.
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