The worst mistakes startups make with intellectual property
Overall, startups don’t understand how to protect and monetize intellectual property, which often leads to mistakes. What is Intellectual Property? The four main types are patents, trademarks, copyrights and trade secrets. Intellectual property allows us to “own” the results of our creativity and our functions within systems.
Here are the worst intellectual property crimes committed by startups.
1. Waiting too long to file a patent application on your invention.
After you publicly disclose your invention, you have one year to file a United States patent application on that invention. If you allow this grace period without filing to expire, your disclosure is considered “prior art” and will be used against you in patent examination. This means that your invention cannot be patented because it is no longer new. (Novelty is a requirement of patentability.)
2. Not searching for prior art.
Is your invention really new? Without studying other similar products and patents, it is impossible to be sure. Filing a patent application without researching the prior art is a waste of time and money and may ultimately prevent you from obtaining patent protection.
3. Conducting a freedom of action search too late in the game.
A freedom to operate search is a type of patent search that assesses potential obstacles to putting an invention into practice. As AUTM President and Associate Vice President for Research, Innovation, and Economic Impact at the University of Kentucky, Ian McClure observes that startups make the mistake of only looking for patentability at first. . If you can get a patent, but you can’t commercialize your invention, what’s the point? This illustrates the tension between commercial and legal perspectives on intellectual property. (Just because you can doesn’t mean you should.)
4. Not knowing what can be protected.
Many people don’t realize that when it comes to bringing a new product to market, the devil is in the details. This is why patents covering manufacturing methods can be of great value. Startups need to think about how their inventions are going to be used today and in the future, as well as other applications of their technology.
5. End up with patent claims that do not match their business objectives.
Without claims that protect your point of difference, your patents will be worth nothing. They are not going to help your business.
6. Patenting inventions that no one wants.
In my opinion, this is one of the biggest mistakes. Avoid protecting inventions that are not marketable. Creating some type of market demand before filing a non-provisional patent application – which can easily cost tens of thousands of dollars – reduces risk.
7. Not giving enough valuable information to their patent attorneys and patent agents.
It is extremely important for startups to help their patent practitioner help them. Give them the technical details of your invention as well as your point of difference in the market. Share workarounds and variations of your invention, as well as manufacturing methods and materials. All of these add value to your patent application by establishing perceived ownership.
8. Filing too few patents or far too many patents.
During my panel at the IPWatchdog Patent Law Conference in Dallas, Texas last week, Efrat Kasznik – president of the Foresight Valuation Group and a lecturer at the Stanford Graduate School of Business for more than 10 years – explained that founders procrastinate and don’t file in time, which means they don’t have enough IP to support their business or they have too many patents.
“Startups think patents are good. They take advice from outside counsel and spend too much money on bad filings,” she explained.
During the same panel, McClure offered an obvious solution for startups, which is to have someone on their board who knows IP strategy from a business perspective.
This person can guide you to deposit a transaction-ready IP. As your startup pivots, this person may also be able to help you monetize the non-core technologies you develop and patent, either through acquisition or through licensing.