For many entrepreneurs and founders of startups, protecting their intellectual property is among their most pressing concerns. Indeed, for many new companies, intellectual property is its most valuable — or even only — asset. Intellectual property law can seem like an extremely complicated area of law and there are many commonly held beliefs that could cost entrepreneurs significant amounts of money. Here are some of the more prevalent intellectual property myths.
Myth 1: Intellectual Property Protection Can Wait
Many startup founders are under the mistaken impression that they can afford to wait to implement an intellectual property strategy until they meet certain milestones or actually launch their product. In reality, it is never too early to develop a comprehensive IP plan. In fact, the best time to create an intellectual property strategy was the day you founded your company. The second best day is today. By taking action today, you can set your company up for success in the future, including by harnessing your intellectual capital and by minimizing your exposure to an allegation of infringement of intellectual property owned by others.
Myth 2: Entrepreneurs Should Bootstrap Their Intellectual Property Issues To Save Money
We at Klinck LLC are all for informed clients, and we work to help entrepreneurs understand the sometimes complex issues related to intellectual property law. In fact, I am currently working on a book to help entrepreneurs understand the intellectual planning process (a book that will be available for free). While the information available online can help you understand many of the issues that arise with intellectual property, you will almost always be better off hiring a lawyer to handle many IP tasks. I’ve seen many a patent that was prosecuted by the inventor that could have been considerably stronger if it was handled by a licensed patent attorney. And to be clear, I don’t prosecute patents, so I am not the lawyer you would hire for that task.
Regardless of your situation, you should take the time to meet with an IP lawyer to get a sense of how he or she can help to guide you through these issues.
Myth 3: Businesses Automatically Own the IP Created by Employees or Contractors
Many entrepreneurs mistakenly believe that they automatically own all of the intellectual property that is created by their employees or independent contractors. While it is true that in many situations they would, there are circumstances in which an employee or contractor would retain the ownership of intellectual property they created. The default rules turn on the type of IP created and whether the worker at issue was an independent contractor or an employee. And in the context of inventions, the inventor owns the rights to a patent unless and until he or she executes a written assignment of rights. The best thing the startup owners can do to protect themselves is have an attorney draft an employment or contractor agreement that clearly spells out the intellectual property rights of each party.
Myth 4: Small Companies Cannot Afford Legal Advice Regarding Intellectual Property
Startups, especially those that are trying to stay “lean,” often fail to seek legal advice regarding issues that are not of an immediate concern (i.e., there is pending litigation) due to the costs associated with legal fees. The reality is that startups cannot afford to not consult with an intellectual property attorney, as issues related to IP can easily significant legal liability or losses at a later date. You should consider the cost of an intellectual property attorney as an investment in your company’s future. While some more complex tasks will be expensive, most intellectual property attorneys will have affordable options for initial discussions and the planning process.