The Top 5 IP Mistakes Tech Startups Make

Insights June 2, 2011

It’s not easy being a technology startup. There are many challenges, including racing towards product and business development milestones, recruitment and management of employees, funding goals and restraints, fierce competition from big and small competitors, changing legal and regulatory landscapes – just to name a few.

One of the costliest mistakes a startup can make is mismanaging intellectual property rights.  A company needs to not only manage its own IP rights, but also avoid those of third parties, including competitors. To be on the safe side, therefore, intellectual property management should include efficiently protecting the startup’s IP rights while also avoiding the IP rights of others.

Consider, for example, a typical smartphone that likely implicates each of the following IP rights:

  • Utility patent rights
  • Design patent rights
  • Trademark rights
  • Trade dress rights
  • Trade secrets
  • Copyrights

Regardless of a company’s size, effective and proper IP management is important to any emerging company. Smartphone makers Apple, RIM and Google’s Android partners have the resources to address these issues with relative ease, but what about the startup or emerging company? Addressing and managing these issues can be a challenge for any company on a tight budget.

Intellectual property rights are important because they can be used to create a legal barrier to competition, establish a portfolio of assets that can be used to generate revenues through licensing or IP transfers or augment the value of a business for purposes of raising seed or venture funding.

It is critical to address these issues as efficiently and as cost-effectively as possible.