Execution is more important, but a good idea is always at the core of successful startups. These ideas are worth protecting.
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Intellectual property (IP) is a term used to describe the creations of the intellect. Although intellectual property is intangible (in the sense that it is not physical), it is immensely valuable as it grants the owner certain rights – including the exclusive use of the IP for profit-making purposes and the right to exclude others from using the IP . These rights are commonly referred to as IP rights. The purpose of IP law is to protect and regulate all aspects of IP rights.
Most of the time, when intellectual property protection comes to mind, people think that it only applies to the media – artists, actors, and writers. IP is much more than that. There are different aspects of intellectual property that apply to both large companies and startups.
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Why startups need to protect their IP
Unfortunately, many startups have a laissez-faire attitude towards protecting their intellectual property rights. This often stems from their belief in the notion that "ideas are a dozen; only execution matters". The problem with this setting is that the delay in securing a startup's IP can cause serious and sometimes irreversible damage to the startup from both a legal and a business perspective. IP matters, which is why companies like Google, Apple, and other technology giants spend billions of dollars to secure their IP.
A tech startup's IP is usually its most valuable asset. The products and services it brings to market will help secure market share and generate revenue, but neither market share nor revenue will be secured unless the company can prevent other companies from sharing its concepts, brands and Stealing inventions. IP is also an important consideration for investors as they want to know that your startup is in control of all of the ideas, codes, and brands that you need to develop and market your products and services. Clearly, without its intellectual property, a tech startup would have little leverage in the marketplace, which is why it's important to protect those rights as quickly as possible.
As startups scale and share information with more partners, vendors, and other counterparties, the importance of securing their intellectual property increases, especially in sectors like fintech, where API integrations – and associated access to each other's systems – are common .
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How to protect your startup's IP rights
Most products and services can be protected by a combination of IP rights. For example, computer software can be protected by patents, copyrights, trademarks and trade secrets. Apple protects certain features of its iPhones and other products through patents and uses copyright law to protect the actual code of its macOS and iOS operating systems. It uses trademark law to protect Apple's trademarks and logos that identify its products, and it uses trade secret law to protect the design and components of upcoming devices.
The specific steps to be taken to protect intellectual property rights depend in large part on the nature of the intellectual property involved, as highlighted above. In general, startups must use nondisclosure agreements to ensure that they can restrict the use of confidential information about their innovations by employees or third parties. It is also important to start registering trademarks and patents quickly to prevent others from registering them first and thus becoming owners.
Even after you've taken the steps above to set up your IP rights including registration, other companies can still violate them. In such cases, it is important to act quickly to get them to stop and seek compensation for any loss caused by their violation and for the violation of your rights. This process is known as IP defense and, depending on the circumstances, can range from a simple letter of inquiry from your attorneys to the infringing party to a lawsuit to enforce your rights.
The importance of protecting intellectual property rights cannot be overstated. A startup is simply unlikely to survive if its IP address is not securely under its control. Some of the most common mistakes startups make, such as: Non-assigning IP addresses to the company, for example, can be incredibly difficult to troubleshoot if not addressed early. Registration is also often tied to being up to date, as highlighted above, and failure to register on time can result in another company securing the rights in question. It is clear that protecting intellectual property must be an integral part of any startup's business strategy to drive growth, prevent infringements, and increase sales.