Startups have been and continue to be a major component of the technological industry. With the hope that a high-risk investment will yield a profitable return, the founders and investors of a startup seek to be a part of the next "big thing" or become the next household name. Indeed, lucrative companies such as Google, Facebook, and Twitter each had a humbling beginning as a startup. One critical area for startups is intellectual property (IP). While today’s startups are savvier about IP than their predecessors were in the ’90s, they still view IP in isolation with respect to the startup as a whole. As a result, startups tend to not think strategically about IP and are unable to obtain the full benefit of the various forms of IP protection that is available.
Protecting IP allows startups to take advantage of one or more of the following: (1) creation and maintenance of a competitive advantage; (2) protection of the startup’s R&D investment; (3) generation of revenue; (4) defense of the startup (in a lawsuit); (5) protection of the startup’s brand; (6) attraction of investors; and (7) the availability of collateral to secure financing.
A manageable way for a startup to approach an IP strategy is to evaluate IP issues at critical milestones during the startup’s life cycle. In this way, the startup is able to make informed decisions related to the protection of its IP as it relates to a particular milestone. Accordingly, the startup may strategically address its IP issues in a focused way without being initially burdened with developing a comprehensive IP strategy.
The following series of blog entries will discuss various IP issues that may arise at critical milestones during a startup’s life cycle. Such milestones include: (1) company founded; (2) hire first employee; (3) product development; (4) product release; (5) marketing; and (6) talking to potential strategic partners. Addressing the IP issues that arise with each passing milestone may be critical to the survival of a newly formed startup, and may be the key to a startup becoming profitable and realizing a high return.