Innovation and intellectual property (IP) underpin the success of startups the world over. These days it seems like record numbers of individuals embrace the entrepreneurial spirit and are willing to risk everything that they have to see their dreams come to fruition. Unfortunately, for every company that thrives, there are at least ten others (probably hundreds) that fail for all sorts of reasons. One of these reasons relates to a company’s failure to utilize dollars wisely and/or protect important assets, especially unique IP. Here are common mistakes entrepreneurs make when it comes to IP and ways to avoid them:
Failing to Identify IP
This probably seems like common sense, but failing to identify IP is quite often the reason that it is stolen. After all, it is impossible to protect IP if it has not actually been identified as IP. Companies must carefully examine their products and the processes they utilize to create them to determine whether they can protect them via a copyright, trademark, or patent. Smart leaders immediately seek trademarks, purchase domain names, and patent ideas, when applicable, to ensure that others do not copy off and profit from their ideas. Granted, there are some limits to the types of information that may be protected, but all efforts must be made to identify a company’s IP so that appropriate steps can be taken to protect it.
Failing to Assert Ownership
This obviously goes along with identifying IP, but once it is identified, there has to be concrete action demonstrating ownership. Depending on the type and form of the data, this may be as simple as adding a logo. With respect to IP that is explained in a written format, any such documents must be watermarked and stored in a secure location. Ideally, company IP should remain confidential, to the extent possible, and when it is shared externally, the outside party must be required to sign a non-disclosure agreement. These types of measures help make it clear who owns the data in the event that it is leaked somehow.
Failing to File, Register, or Consult an Expert
In some cases, companies must fill out detailed paperwork and submit it to the appropriate governing agency, usually the United States Patent and Trademark Office.This may seem daunting for startups or small enterprises, as it is no doubt faster and easier to do this with the help of an attorney or expert. Unfortunately, legal advice may be a luxury some companies simply cannot afford. When deciding whether a company can swing such an expense, it likely boils down to the value of the IP at stake. For any company sitting on a million dollar idea, it is probably worth it to do everything possible to protect the IP.
Failing to Institute Security Measures
If a company simply does not have the time or the funds to go about protecting their IP via the traditional legal channels, it should at least invest in a secure data room. There are surprisingly affordable solutions that offer multi-factor authentication, advanced encryption, and strict access controls. Of course, instituting other security measures is also useful, such as creating a data security plan, training employees, and mandating confidentiality and non-compete agreements.
Ultimately, taking any step to protect IP is better than nothing, and there are plenty of simple and inexpensive methods available to facilitate these efforts.