When you're a founder, you've come up with a great and innovative idea for your startup and put in a lot of work. You may have built a prototype and started to build your business. When you have a creation that is unique and designed by you, you need to be able to protect it at all costs. It's an extremely valuable asset, and without protections, it can be easily stolen and used to profit from by other companies.
Intellectual property issues are one of the most common challenges startups face. Several issues can arise when intellectual property is not protected. You can experience problems with hiring employees and developing the startup further, and it can create concerns with interested investors that could decide to pull out.
Although there is a lot on your plate as a founder in the early stages, you need to focus on the intellectual property during this critical time. You likely want to do everything in your power to ensure your startup moves from round to round effortlessly as you grow. One of the most important types of intellectual property that startups need to focus on is patents. Understanding patents as intellectual property and developing a strategy can ensure your business is started on a solid foundation.
Read on to learn everything you need to know about patents. And how to protect and secure your rights.
What is Intellectual Property?
Intellectual property (IP) uses copyrights, trademarks, and patents to protect and safeguard your startup's ideas. It puts a legal check in place to protect from others infringing on and profiting off of your property. In the beginning stages of your startup, if you start with a great IP strategy, you can ensure your business and partnerships are set up with a great foundation for success.
There are generally three types of Intellectual property that you need to worry about as you begin to grow your startup: Patents, trademarks, and copyrights.
Patents – Patents protect inventions and unique ideas, whether it's a physical object or digital creation such as software.
Trademarks – A trademark is a name, logo, design, or word used to brand a company.
Copyright – Copyrights protect creative works such as literature, films, artistic work, screenplays, sound recordings, and music.
Trade Secret – Trade secrets are anything that gives a company a competitive edge, such as a formula, data, or even a recipe.
Why is Protecting Intellectual Property Important
Protecting IP is essential for startups because they simply can't afford to lose the rights to any aspect of their company. Protecting your IP doesn't require a lot of money or jumping through hoops. They usually require a little research and some minor fees to secure patents, copyrights, trademarks, and trade secrets. There are a lot of benefits to securing IP early on in the startup's development. Benefits include:
Preventing Other Companies from Profiting off Your Ideas – IP protection comes with registration proves that the rights belong to you.
Protection From Infringement – If you don't protect your IP, you may be using someone else's IP in developing your startup. You could be at risk for an infringement lawsuit.
Appeals to Investors – One major benefit of securing IP is that investors will be more likely to invest when a startup has a well-developed IP strategy in place from the start.
What are Patents?
Patents are an important type of intellectual property that startups need to look into when they begin their journey to creating their startup. Patents help protect your unique business ideas and inventions from other companies stealing information and using it for profit. Pursuing knowledge of patents also ensures your startup is not infringing on any rights and protects you from legal issues that could occur in the future.
Most patents filed in the US are valid for 20 years from the date of the application. According to the United States Patent and Trademark Office, 'a patent can be granted to anyone who invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent, subject to the conditions and requirements of the law.'
Different Types of Patents
Understanding the different types of patents and how they can fit into your startup. There are three types of patents which has its own specifications.
Utility Patents - Utility patents are what you should consider to legally cover any invention, discovery, or improvement of any useful process, machine, article of manufacture, or composition of matter. This is the most common patent type, valid for 20 years, and has maintenance fees associated with it.
Design Patents – Design patents are for the invention of a new, original design for an article of manufacture. This patent requires the design of anything that can be useful and is original. These patents last for 15 years if filed after May 13, 2015.
Plant Patents – Plant patents cover the creation or discovery of a new species of plant to prevent other companies from breeding it. There are no maintenance fees for this kind of patent; it lasts for 20 years from the filing date.
How to File for a Patent
A patent is obtained by filling out an application with the United States Patent and Trademark Office (USPTO). Before applying for a patent, you should search the database to find out if anyone has claimed a patent for a similar invention. If you are filing a patent, it has to be different from or an improvement of your idea or invention.
Once you've determined there is not another patent that could be similar to your invention, you can prepare your application for the USPTO. The application process includes a written description of your item or process, detailed drawings and images, and a list of elements that make up the invention, also called the claims. You must also submit a formal oath or declaration stating that you are the first known inventor of the item or process to be patented.
Once you pay the fees, the application will be under review. This process can take several years and should be handled by your attorney as there is a lot of back and forth between the patent office. Strong legal backing can help reinforce your patent claims.
Common Mistakes When Filing a Patent
When filing a patent, the application is an essential step if you want to protect your intellectual property. The patent process is lengthy and can take years to get approved. To ensure the process is smooth, avoid these common patent mistakes.
Waiting too Long – Patents are time sensitive, and too many startups make the mistake of waiting too long. You only have one year from offering or publicly disclosing a product or service to file a US patent. If you wait too long and miss the year grace period offered by the USPTO, you can no longer get a patent for that invention. A competitor can also come in and take your idea if you wait too long.
Too Many Claims – You can only file one claim per patent application, and if your patent includes more claims, you need to file multiple patents for each claim which covers a specific part of that invention.
Too Broad – You don't want to miss any details when filing patents. A patent that is too broad can leave out details that might not be enough to enforce any litigation in the future.
Not Seeking Legal Counsel – Legal counsel with a professional who understands patent applications and laws can be vital to ensuring the successful approval of your patent. While you can draft your own, a lawyer can help ensure the language you use is strong enough to support your claims and ensure no detail is left out.
What Happens if You Don't File a Patent Application?
While patents can be challenging, expensive, and time-consuming, they are worth the effort. Legal protection is vital as you work to build your startup. If you fail to file a patent application for your invention, you might risk infringement if someone swoops in and applies for a patent on any aspect of your startup's product or service. You will no longer have exclusive rights to sell or license your invention and technically have no legal ownership.
Protecting your inventions and ideas or intellectual property is essential for safeguarding your creations and helping you avoid costly mistakes. Understand the patent application process and do your due diligence to protect your business. Create a smart IP strategy right from the start to appeal to investors and start your startup with an excellent foundation for success.
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