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Initial Protection - Intellectual Property for the Start-Up Company

Overcoming barriers

A new company that builds a protected market niche around a patented invention is the stuff of modern legends. In looking at intellectual property rights, one needs to realize these rights are basically exclusionary, and often exclude newcomers from a market. Patents forbid an outsider from making or using the invention described in their claims. Copyrights forbid copying the way someone has expressed an idea. Trademarks forbid using distinctive symbols in a way that would confuse a customer as to the source of goods or services. The modern legend of building a business around a patent fits some start-ups; but running afoul of intellectual property held by others is a concern shared by all start-ups

Two themes: Speed and Valuation

A company trying to build a market based on an innovation should look at patent-related issues of valuation and speed that a going concern might ignore. For example:

Getting a patent issued quickly can be vital. Excluding competitors from your new market niche can depend on an enforceable patent.
Getting a credible answer to a potential investor's question of "what's it going to be worth" is also often tied to speed of prosecution.

There are several things that can be done to try to get an enforceable patent quickly, and to provide the most credible estimate of its future value while it is still pending. Although the discussion here assumes the company is being started in the US, similar arrangements fit in elsewhere. Specific steps that can be considered in the US are:

Get a good prior art search and patentability analysis. Avoiding overly broad and fuzzy initial claims can cut several months off the examination process. In addition, the pre-filing analysis can help prospective investors feel more comfortable about the likelihood that usable patent claims will eventually be allowed.
Avoid the temptation to file a provisional application and then wait a year. If your marketing schedule gets you into a position where you do have to file in a hurry, file a provisional and follow it up with a regular application as soon as possible.
If you are in a "hot" technology area where examination is likely to be very slow getting started, making foreign filings well in advance of the deadlines can sometimes speed the process of getting a search report out of at least one patent office.

Staying Alive

On the defensive side of the matter, avoiding problems with established competitors' property rights usually involves extensive searching and analysis by an outside expert. A major trap for start-ups is not realizing that a new, improved and patentable product may still infringe an existing patent on the older product that the inventor set out to improve. More frequently, a major source of intellectual property problems for a start up comes in the trademark area. Picking a single name that somehow or another "sounds right" for the new product is a common way into a morass. If it sounds right to the start-up, it may have sounded just as right to someone else, who is already using it. Picking multiple names, and expecting some of them to get shot down, is one way around the problem. But it doesn't replace having a good trademark search made before investing in advertising materials.

David A. Kiewit
Registered Patent Agent
5901 Third St. South
St. Petersburg FL 33705-5305
+1 (727) 656 0669 voice

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