There are a lot of ways businesses—new and old—can use intellectual property to their advantage. Unfortunately, IP can also be an organization’s downfall. The most common IP mistakes can be divided into two misguided beliefs: IP is less important than other business functions, and small businesses and startups stay small. These myths can manifest in multiple situations, impacting a company’s future.
Mistake 1: IP Is Less Important than Other Business Functions
When you’re running a business, especially a startup, it may feel like everything is a priority. Something has to give; unfortunately, some entrepreneurs believe that intellectual property can be placed on the back burner. In reality, IP is an essential competitive advantage worthy of investing time and money in.
Industry innovator Mary Juetten writes, “Over 90 percent of a startups’ value can be made up of IP.” This makes protecting IP extremely important for securing funding and should be enough to make any entrepreneur reconsider treating IP as an afterthought. However, business owners and entrepreneurs who understand the importance of intellectual property rights but are simply inexperienced in navigating IP may not realize neglecting IP is exactly what they’re doing.
In practice, regarding IP as less important than other business functions can look like:
- Using a do-it-yourself approach, including writing patent claims without the guidance of an IP professional.
- Failing to create a strategy that guides all IP decision making, which can result in unrelated IP that wastes limited resources throughout its lifetime.
- Bringing products to market without protecting any intellectual property, jeopardizing the ability to continue manufacturing and selling in the future.
- Failing to transfer IP rights from individual engineers, inventors, contractors, designers, or other involved parties to the company.
Mistake 2: Small Businesses and Startups Stay Small
It can be hard to think big when a business is just an idea. Failing to carefully consider the future is a common IP mistake, which can manifest itself in many ways. Firstly, an organization can fail to understand how many types of IP there are and how to protect different aspects of the business. IP rights are more than just patenting inventions. Companies must also consider national trademark protection in order to use their name nationwide, as well as applicable copyrights and trade secrets. It’s common for a business to share ideas in its early stages without nondisclosure agreements in place, exposing potentially valuable IP to risk.
When a startup is ready to disclose an invention, it may only consider patenting in the United States and follow timelines specific to the US system. This is shortsighted. Rules surrounding when a patent application must be filed relative to public disclosure are very different among major patent offices. For example, the US has a 12-month grace period after disclosure during which the patent application can be filed while Europe does not. Failing to file worldwide before disclosing your invention can have long-lasting consequences.
Lastly, a small company with limited IP experience may believe the only way to use intellectual property is to bring a product to market. In reality, there are many ways to leverage the value IP offers an organization.