Startups can protect their products using different types of IP, such as copyright , design patent, utility patent, trademark, trade secret etc. To create a suitable IP strategy, startups must understand how IP fits within their business strategy, and how IP is used in the market by their competitors, partners, suppliers etc.
Startups must develop a robust intellectual property strategy early in the life cycle of their products to maximize the value of these important assets. The best IP strategy is not to file many patents or trademarks, but to have a freedom to commercialize an innovative product in the most competitive market without a potential IP infringement.
Startup companies should be proactive in creating and protecting their intellectual property for many reasons:
- To maintain their competitive advantage
- To attract investors and increase stakeholder value
- To generate potential revenue through licensing
- To have a defensive strategy toward BIG competitors
- To make lucrative exit options available by creating complementary IP for other major market players
- To create a better business development opportunity with an enterprise customer
- To build a culture of encouraging and nurturing innovation inside the company
Creating an appropriate IP strategy involves:
- Identifying the key innovations of a company’s products and services and interviewing people/individuals involved in creating an invention to find out the intellectual assets applicable for that invention
- Taking strategic business decisions based on the life-cycle of business and technology of a product developed and aligning both these aspects
- Being aware of others’ IP rights to ensure that someone else’s rights do not prevent or limit you from operating your business
Most startups consider patents as one of the key component of their IP portfolio. A company’s patent portfolio opens its doors to investment opportunities from investors and venture capitalists. Startups can also use their patent portfolio as return on investment by licensing out the patented product and technology to third parties in exchange for a lump sum amount or ongoing royalties, cross-licensing technology or partnering with third parties in some aspect of business development. Investing in and protecting intellectual property assets tend to build business credibility, provide comfort to investors and generate potential revenue for startups.