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Top 10 Intellectual Property Rights Practices Every Startup Should Know

Startups are the heart of innovation, often birthing groundbreaking ideas that disrupt existing markets and create new ones. However, amidst the exciting journey of bringing fresh ideas to life, there lurks the critical concern of protecting these intellectual properties (IP) from being infringed or misused. Intellectual Property Rights (IPR) offer this protection, serving as a legal shield for your startup’s valuable assets. Understanding IPR practices is essential for startups, allowing them to safeguard their innovations while navigating the competitive business landscape. This article will outline the top 10 IPR practices that every startup needs to know.


1 – Clearly Identify Intellectual Property (IP)

Startups should clearly identify their Intellectual Property (IP) because it serves as a cornerstone for the business’s future growth and differentiation in the market. Accurate identification of IP assists in establishing a solid foundation for valuation during fundraising rounds. Moreover, it offers legal protection against competitors, preventing them from copying or stealing unique ideas, designs, or inventions. Clear recognition of IP also enhances a startup’s potential for strategic partnerships, licensing agreements, and even acquisition. Hence, the identification of IP is not merely a legal requirement but a critical business strategy for startups. 


2 – Use Non-Disclosure Agreements (NDAs)

Startups should make extensive use of Non-Disclosure Agreements (NDAs) to protect their intellectual property. These legally binding contracts create a confidential relationship between the startup and any other parties involved, safeguarding any type of confidential and proprietary information or trade secrets. NDAs are essential for startups because they help prevent the misuse or theft of their valuable ideas or strategies. When engaging with potential employees, investors, contractors, or business partners, the use of NDAs ensures that sensitive information disclosed during these interactions is kept secret. Moreover, the breach of such agreements can lead to legal repercussions, further deterring the unauthorized disclosure of confidential information.

3 – Register Trademarks

Registering trademarks is a crucial practice for startups as it provides exclusive rights to the use of brand names, logos, and taglines. Trademarks not only help in brand differentiation but also legally protect the startup from competitors who might try to profit from a similar brand identity. By registering a trademark with the United States Patent and Trademark Office (USPTO), a startup can defend its trademark in the court of law in the event of infringement. Moreover, a registered trademark increases the startup’s value and can be used as a tangible asset during funding rounds or acquisition talks. Therefore, registering trademarks is an integral part of a sound IP strategy for startups.

4 – File for Patents

Filing for patents is a fundamental practice for startups to protect their innovative products or services. Patents protect the exclusive right to prevent others from making, using, or selling the invention for a certain period, typically 20 years, offering a significant competitive advantage. By securing a patent, startups can protect their inventions from being copied or exploited by competitors, thereby preserving their unique market position. Furthermore, patents can enhance the startup’s credibility, making it more appealing to investors, partners, and customers. They can also be licensed or sold as valuable assets, providing a potential revenue stream. Therefore, filing for patents is a crucial part of a solid IP plan for startups.

5 – Inclusion of Invention Assignment Agreements

Including Invention Assignment Agreements is crucial for startups. These legal agreements ensure that any intellectual property generated by an employee or contractor is owned by the startup, not the individual. This practice protects the startup’s IP assets, ensuring they remain within the company even if an employee departs. It also mitigates the risk of legal disputes over IP ownership, which can be costly and detrimental to the startup’s reputation. Additionally, having clear ownership over all IP assets enhances the startup’s valuation, making it more appealing to investors. Therefore, Invention Assignment Agreements are a critical component of a sound IP protection for startups. 

6 – Maintain Trade Secrets

Maintaining trade secrets is essential for startups to retain a competitive edge in their respective markets. Trade secrets are confidential information that gives a business an advantage over its competitors. This could be a unique process, a proprietary method, a client list, or even a unique recipe. By keeping this information secret, startups can safeguard their unique selling proposition and prevent competitors from replicating their success. Furthermore, unlike patents, trade secrets do not have a set term limit and can remain a valuable asset for as long as the information remains confidential. However, startups should enforce robust security measures and employee agreements to ensure the protection of their trade secrets.

7 – Understand Patent Infringement

Understanding patent infringement is vital for startups to ensure the legitimacy of their operations and to avoid costly lawsuits. It involves comprehending what constitutes patent infringement and being aware of existing patents in their business domain. Startups need to perform thorough patent searches before launching a product or service to verify they are not inadvertently infringing on someone else’s patent rights. If a startup infringes upon another’s patent, they may be subject to legal action, which could entail hefty fines and damage to their reputation. Furthermore, understanding patent infringement can serve as a guide for startups to recognize potential infringement by competitors and provide a basis for legal action to protect their IP rights. Therefore, understanding patent infringement is a crucial aspect of a sound IP strategy for startups. 

8 – Monitor IP Assets

Monitoring IP assets is crucial for startups as it helps them to keep track of their intellectual property and ensure it is being used effectively and in a manner that aligns with their business objectives. Regular monitoring can help detect any unauthorized use or infringement of IP assets, enabling startups to take timely action and protect their interests. Moreover, it gives startups a clear understanding of their IP assets, which can be leveraged during negotiations for funding or partnerships, thereby increasing their business valuation. Therefore, regular monitoring of IP assets is a key factor in a sound IP strategy for startups.

9 – Consult an IP Attorney

Consulting an IP attorney is highly advisable for startups as it can help prevent costly mistakes and legal disputes. An IP attorney, with their specialized expertise, can guide startups through the complex processes of securing patents, trademarks, and copyrights, ensuring that all filings are proper and timely. They can also assist in identifying potential IP assets that may have been overlooked by the startup and conduct thorough patent searches to prevent inadvertent infringement of existing patents. Furthermore, an IP attorney can provide advice on managing IP-related contracts and agreements, and in case of an IP dispute, they can provide legal representation. Ultimately, an IP attorney plays an instrumental role in devising a robust IP strategy that aligns with the startup’s business goals, safeguards its IP rights, and enhances its market position. Therefore, consulting an IP attorney is a crucial step for startups in maintaining a successful IP strategy. 

10 – Educate Employees about IP

Educating employees about intellectual property is an essential move for startups for several reasons. Firstly, it helps to foster a culture of innovation and respect for IP rights within the organization. When employees understand the value of intellectual property, they are more likely to contribute to its creation and protection, thereby enhancing the startup’s IP portfolio. Secondly, it mitigates the risk of inadvertent infringement by employees who may unknowingly use copyrighted or patented material. Lastly, it aids in the early identification and protection of new IP assets, as informed employees can better recognize potential IP in their work. Therefore, educating employees about IP is a crucial part of a comprehensive IP strategy for startups.


For more information, please contact Arlen Olsen at Schmeiser, Olsen & Watts LLP at