In the process of creating and launching innovative products, building brand image and expanding market share, SMEs and entrepreneurs often have no time to take into account intellectual property rights. However, intellectual property rights are crucial for SMEs and entrepreneurs to protect innovations, consolidate market positions and bring business value.
The importance of intellectual property:
- Protect ideas: Intellectual property protection ensures that your ideas and innovations are legally protected against infringement by others.
- Market competition: Having valid intellectual property rights can give you a competitive advantage in the market and protect your business and products.
- Return on investment: Effective intellectual property rights can bring you more investment opportunities and potential benefits and enhance the value of your enterprise.
Failure to fully protect and manage intellectual property rights in a timely manner may lead to risks such as intellectual property infringement, leakage of trade secrets, and brand damage. In order to build a company’s intangible assets, we need to deeply understand these pitfalls and explore effective solutions to ensure the safety and effective use of intellectual property.
Below are six common intellectual property traps for SMEs and entrepreneurs. In response, I have shared the management plan for IP protection in different stages of development, hoping to help SMEs and entrepreneurs build up the intangible assets of their enterprises and realise sustainable development and competitive advantages.
Mistake 1: Failure to protect intellectual property rights in a timely manner
- Patents: Ignoring patent protection can result in innovations being copied by competitors and losing your market share.
- Trademarks: Unregistered trademarks can make your brand susceptible to imitation, causing confusion and reputational damage.
- Copyright: Failure to protect your copyright may allow others to use your work without authorisation and damage your creative rights.
- Domain name: Unprotected domain name. It may lead to increased search costs for consumers and confusion about the brand. You will also lose traffic and customers that originally belonged to you, resulting in business losses.
- Trade secrets: Ignoring trade secret protection may lead to core trade secrets being leaked to competitors, weakening the company’s competitiveness. It may even undermine customer trust, causing the relationship to suffer.
Also Read: Set sail with intellectual property: Your business’s journey to success
Mistake 2: Failure to use intellectual property rights appropriately
- Innovation and protection: Combining innovation with intellectual property protection to promote business development and sustained growth.
- Branding and marketing: Use intellectual property to create unique brands and marketing strategies to attract more target customers.
- Failure to identify existing intellectual property: Most startups and SMEs often fail to recognise the valuable assets that exist within the business. Startups should regularly ask themselves: “What do we do better than everyone else?” The answer likely points to intangible assets worth protecting.
Mistake 3: Not monitoring competitors’ intellectual property
Market competitive intelligence can be accomplished through patent landscape analysis, trademark or domain name Whois searches. The information thus obtained not only allows early identification of possible infringements but also enables appropriate legal action to be taken to protect your intellectual property rights.
It can also be used as an early warning tool for competitors who are about to introduce new technologies or products to the market so that the company can make strategic responses through active R&D or marketing activities.
Mistake 4: Not properly managing intellectual property
- Records management: Establishing systematic records management to ensure the security and easy access of critical documents and evidence.
- Update and maintain: Regularly update and maintain your intellectual property to maintain its effectiveness and authority.
- Risk assessment: Evaluate potential risks and threats and develop appropriate strategies and measures to protect your intellectual property and reduce future intellectual property issues.
Mistake 5: Not establishing clear IP ownership provisions in employment agreements or with third-party vendors
Depending on state jurisdiction, the work product of employees or independent contractors may not belong to the Company. Companies may find themselves unable to use the results of projects they fund because intellectual property ownership may be unclear or belong entirely to third parties.
It is recommended to introduce IP ownership clauses in employee agreements to identify IP ownership between co-founders and be cautious about outsourcing critical work to external partners.
As a corollary, the startup should be the ownership holder of the intellectual property, rather than the startup founder himself.
Mistake 6: Not protecting in the correct jurisdiction
Intellectual property rights are national and protected in the jurisdiction in which they are granted.
Entrepreneurs must be careful to protect innovation in the right jurisdiction. It’s a balancing act because the more jurisdictions you add to the application process, the higher the cost.
Typically, entrepreneurs seek to protect innovations where the startup has a market and/or competition. This is a strategic decision that requires understanding the intellectual property protection process, obtaining market information, and budget management.
The following is divided into the basic version of the early stage of entrepreneurship, the entrepreneurial startup defensive version and the advanced version of the monetisation of intellectual property rights in three phases to give some program recommendations in the hope of helping small and medium-sized enterprises and entrepreneurs to protect and utilise intellectual property rights effectively.
Intellectual property protection in the early stages of starting a business
In the early stages of your business, you need to establish a solid intellectual property foundation to ensure that your innovations are properly protected:
Understand the types of intellectual property rights
Learn about the different types of intellectual property, including patents, trademarks, copyrights, domain names, and trade secrets. Clarify which types of intellectual property rights your innovations are applicable to so that they can be protected in a targeted manner.
Conduct a risk assessment
Assess whether your products or services are at risk of infringement, understand your competitors’ intellectual property rights, and whether your innovation is worth protecting.
Protect core technologies or ideas, register trademarks and domain names
If your business involves critical technology or ideas, consider applying for a patent to protect your invention or innovation.
Also Read: The best new year resolutions for startup founders: Offering ESOPs that actually work
Also, make sure your trademarks and domain names are unique and available. Register trademarks to protect your brand identity and domain names to prevent others from taking them.
Establish trade secret protection measures
Take appropriate measures to protect trade secrets, such as signing nondisclosure agreements, controlling access to knowledge and protecting confidential company information.
Use non-compete and confidentiality agreements
When working with suppliers, partners or contractors, make sure you have appropriate non-compete and confidentiality agreements in place. These agreements can limit access to and use of your intellectual property and ensure that partners will not disclose or exploit your intellectual property.
Intellectual property protection in the early stages of starting a business
In the early stage of starting a business, you will face more market competition and business challenges. You not only need to manage your own intellectual property rights but also learn to defend yourself:
Monitor market infringements
Regularly monitor the market for infringements, including trademark, patent and domain name infringements. Use trademark monitoring services, patent search tools, and domain name alert services to identify infringements promptly.
Maintain and manage existing intellectual property rights
Ensure that protection measures for patents, trademarks and domain names are implemented.
For patents, annual fees must be paid regularly, and the disclosure and use requirements stipulated in the patent law must be complied with.
For trademarks, it is necessary to maintain the validity of the registered trademark and renew the trademark registration certificate in a timely manner to avoid trademark infringement by others.
Also Read: Neuroscience to the rescue: How startups can dodge burnout
For domain names, regularly check and update domain name registration information to ensure the accuracy and completeness of the information. At the same time, renew your domain name in time to avoid losses caused by domain name expiration.
Strengthen awareness of intellectual property protection
Train employees and partners to increase awareness of intellectual property protection. Make sure they understand the importance of intellectual property and take appropriate steps to protect the business’s intellectual property.
Handling infringements
If infringement is discovered, take prompt legal action. Seek help from a professional intellectual property lawyer to develop appropriate response strategies, which may include sending an infringement notice, taking legal action, etc.
Look for licensing and licensing opportunities
Explore opportunities to commercialise intellectual property. Look for licensing and licensing opportunities related to your intellectual property, such as authorising others to use your patented technology or trademarks to generate revenue and expand market influence.
Intellectual property in the entrepreneurial development stage
At the development stage, where you are striving for commercialisation and monetisation of intellectual property, you need to convert intellectual property into commercial value. The following are key takeaways for commercialising intellectual property:
Intellectual property evaluation and management
Evaluate your intellectual property, determine its commercial value and develop a management strategy accordingly. Consider the market demand, competitive environment, and business model of intellectual property to maximise its commercialisation benefits.
Drive marketing and sales
Incorporate intellectual property into marketing and sales strategies. Utilise intellectual property advantages such as brand trademarks and patented technologies to publicise and promote to the market to attract the attention of customers and partners.
Intellectual property transactions or financing
Appropriately consider selling, transferring or financing part of the intellectual property. Negotiate with potential buyers, sign contracts, and ensure the transaction process is legal, transparent, and in your favour. Intellectual property financing not only obtains financial support but also fully proves that the company has valid intellectual property rights. Help enterprises improve their commercial value and market position.
Licensing and cooperation
Actively seek intellectual property licensing and cooperation opportunities, establish cooperative relationships with other companies or institutions, and jointly develop and commercialise intellectual property to achieve a win-win situation.
Continuous monitoring, updating and risk management
Continuously monitor market and technology changes to adjust and update your intellectual property strategy in a timely manner. Maintain an awareness of competitors and emerging technologies to protect and optimise the commercialisation value of intellectual property.
At the same time, in the process of intellectual property commercialisation, attention must be paid to risk management to prevent intellectual property rights from being abused or infringed.
The original intention of sharing this article is to help small and medium-sized enterprises and entrepreneurs avoid the most common pitfalls of intellectual property rights. But this article describes not all situations.
Many factors may influence the relevance of a listing to a particular company, depending on the state and nature of the technology or innovation developed by the business, the target market, the competitive landscape and even the jurisdiction.
Every business will face unique business challenges that require a tailored IP strategy. It is recommended that you make corresponding adjustments and supplements according to your own specific situation and needs. At the same time, it is also very important to consult a professional intellectual property lawyer or consultant to ensure that your intellectual property strategy is legal and effective.
The content and opinions expressed above are my own and are not financial advice or legal advice.
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