This article is the third of a three-part series by Baldwins Intellectual Property that focuses on the importance of intellectual property for startup companies.

What is intellectual property?

Intellectual property is about creations of the mind. This includes new methods, products, expressions of ideas, trade secrets, brands and logos. Some intellectual property rights exist automatically upon creation such as copyright. Others require formal registration, such as patents, designs and trade marks.

Intellectual property can create trouble for startups in their early stages, and getting it right is a crucial aspect to running a successful business. While many large companies invest millions to protect their intellectual property portfolio, startups in their early stages can forget to look into their intellectual property altogether or make decisions that have a negative impact later on when the business develops.

i) Assuming your intellectual property is not important

Amongst the greatest of the mistakes that many startups can make is assuming that intellectual property is not important to their business.

As soon as you have a business or product idea and you’ve spent some time planning what this may look like in reality, start looking into intellectual property protection. Reversing a lack of intellectual property rights at a later stage is very expensive and in some cases impossible, it is more efficient to invest the time and money sorting your intellectual property out from the beginning.

As a starting point, begin by educating yourself as much as possible about intellectual property and the protection that is relevant for your business. For example, you can begin by performing your own searches of existing intellectual property owned by third parties. These searches can guide your research and development investment and help you avoid infringement of others’ rights, saving time and money in the early stages of developing an invention or brand. brings up a plethora of information for finding out about existing patents and The Intellectual Property Office of New Zealand has a search engine to look up existing trade marks in New Zealand. A marketplace search on Google can also be useful to identify others’ intellectual property rights which may not be officially registered.

Conducting thorough research and developing a plan in relation on your startup’s products and services will be useful to ensure you understand which aspects need protection and also helpful when you need to articulate these to an intellectual property professional.

ii) Assuming other’s intellectual property is not important

Thinking about your own intellectual property isn’t just a good idea – it is crucial to protect yourself from infringing on others’ intellectual property. Even if you make the decision not to protect your intellectual property, this will not insulate you from possible infringement of others’ granted patents, registered designs, or registered and unregistered trade marks. Infringement proceedings can be very costly and time consuming.

It is wise to research others’ intellectual property to save you breaching their rights. For example, a professional freedom-to-operate search will show you whether your intended product will infringe any patents or designs that are already in force, and/or ensure that your chosen logo is sufficiently different to those being used by your competitors.

You may not think this information is important if your intent is to exit the startup before manufacturing or sales begin. However, it may be an important question potential purchasers of your business may ask. If you do intend to stay with the startup to the manufacturing and selling stages, then you and your investors will find early comfort in knowing that the intended product is unlikely to infringe on others’ intellectual property rights.

iii) Timing – the balance between rushing through the process and delaying the inevitable

There is no need to rush the process of getting your intellectual property rights protected. In fact, it is far from a quick process and can take many years to establish a firm intellectual property portfolio. You also want to avoid rushing your product development and making mistakes for the sake of sorting out intellectual property matters.

The process of getting your intellectual property applications through isn’t always a straightforward process. The process can be complicated and costly and it is important to get it right the first time in order to avoid doing it more than once. As a start-up owner, you need to understand what components of your product may require intellectual property protection and in what order of priority.

For example, you can minimise costs by only seeking patent or registered design protection for the components of your product that add commercial value.

Likewise, your business may be better suited to obtaining trade mark protection as a priority, particularly for example, if you plan to manufacture goods off-shore or you are offering a service which is going to be highly publicised in the near future.

Notwithstanding the above, you cannot sit still and ponder about intellectual property issues forever. It’s important to act reasonably swiftly to ensure it isn’t too late to start protecting your intellectual property and preventing others from stealing or profiting from your ideas.

This is particularly important where your startup is already running tests or market research and other people are now involved in the development process. The novelty of your product can also be destroyed through your own disclosures, for example by publishing your ideas on a blog or website or talking about your startup at an event.

iv) Signing the wrong contracts

Startups tend to be organic and often have a culture of informality. While this is great for fostering innovation and sharing ideas, you still need to make sure the formal aspects of running a business are taken care of appropriately. In turn, this will lead to greater protection of your intellectual property rights and increase your ability to leverage them as a valuable business asset.

It is easy to overlook the importance of having your intellectual property rights sorted and including clauses specific to ownership of intellectual property in all the agreements you sign with your suppliers, employees and business partners.

Read part 1 of this series here. Read part 2 of this series here.

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