Intellectual Property Pitfalls To Avoid When Starting A Business

Although it might not seem like it to the average person, intellectual property is probably one of the most valuable assets businesses have. About 80% of the value of your average company comes from it alone. Despite this, many small businesses and start-ups make the mistake of not properly protecting this asset because of the misbelief that this is something only big organizations do. By doing so, as a corporate law firm in Lithuania notes, they’re lowering their value – small companies are mostly built on their intellectual property and peculiar brand. When it comes to matters concerning IP, generally it’s best to stay proactive rather than reactive as this will mitigate possible damage & losses.

 

Familiarize with the appropriate laws

The best tactic to avoid IP issues when starting a business is to have at least a minimal understanding of the laws concerning this asset. You have to:

  • be able to identify the types of intellectual property you already have or are planning to create;
  • be able to list any protection that is already implemented;
  • know how to obtain IP protection & property rights and how this process works.

 

It’s also beneficial to understand the basic forms of IP that may apply to your company, products & services. This includes:

  • patents;
  • industrial designs;
  • copyrights;
  • trade secrets, and more.

 

A corporate law firm in Lithuania advises avoiding the infringement of other’s intellectual property. Just because you can easily find and download pictures, videos, music from the internet, it doesn’t mean that they are free to use. Not all of them will have a copyright mark either. So, before you use works found online for your business, make sure whether they are copyrighted or not and which have usage restrictions. This way, you’ll avoid IP issues in the future and your company will benefit from a good reputation for respecting creator rights.

 

Trademarks

Issues with trademarks include the business’s name, trademark, logo, and even slogan. While it does take a while until you find the right name or logo for your organization, not many start-ups do the necessary research to find out whether these are already in use or are similar to existing IPs. Always look into them to avoid infringing on another company’s rights.

Another mistake is assuming that once you establish your organization with a select name, this intellectual property is already protected and trademarked. That is not true. As a corporate law firm in Lithuania points out, to have exclusive IP rights, you have to register for a trademark in the countries and regions that you’re planning on running your business in. Otherwise, your intellectual property isn’t protected.

 

Patents

Usually, manufacturing and selling patented goods isn’t a viable option for many patent applicants. That’s why they turn to companies that can do this work for them by granting them license rights or just selling them altogether. If this is your goal, it’s best to draft and sign a non-disclosure agreement to prevent public dissemination and misappropriation.

As a corporate law firm in Lithuania further explains, it doesn’t matter if you will manufacture the innovation yourself or collaborate with another business. You have to make sure that these agreements don’t restrict you from obtaining other patents, too, as upon improvement the original design might require additional patents. Disclosing this information to another party without a non-disclosure agreement can lead to you losing your ability to patent these modifications.

 

Partners & employees

If a business venture is conducted by more than one party, IP issues generally occur more frequently. Contractor and employee trustworthiness, intellectual property rights become a hot topic. The most common issue that can be easily prevented is the accidental leakage of confidential information. The corporate law firm in Lithuania advises restricting the information your employees have access to only to the data that they need to complete their work. Putting a non-disclosure agreement in the work contract is also beneficial.

To avoid problems with IP between co-innovators, contractors, collaborators, and employees, determine in advance who owns the rights to intellectual property and if ownership can be transferred. It’s also strongly recommended to contractually define whether this asset can be licensed to other outside parties. This will prevent competitors from getting the manufacturing rights of your innovations.

So, what’s the best time to apply for IP protection? As soon as possible. Don’t wait too long or someone else might just snatch your ideas and use it for their gains. In general, entrepreneurs should gain at least basic knowledge about intellectual property rights and laws before starting a business. This way you’ll avoid any possible legal conflicts concerning IP rights and seize better business opportunities from the get-go.