New Zealand: IP 101 For Start-Ups

Last Updated: 8 November 2018
Article by Anton Blijlevens

What intellectual property (IP) related steps should a start-up take? Start-ups should take the same steps as a large multinational, but within their budget.

Make IP decisions and do so early

One of the main (and early) steps is to make a considered decision about what IP means to your business and what IP tools will be used to support your business model. Not doing so can cause big problems later for your business. You need to have answers to the potential IP questions that may be raised by future investors or exit targets at the time of their due diligence..

You may have made a conscious decision to not pursue registered IP rights, which can be perfectly acceptable. For example, start-ups often do not register their trade marks because they have an exit strategy in mind—an exit strategy that will see their business absorbed into a large organisation with its own trade mark protected house brands already in place. On the flip-side, the brand may play an important role in the value of the start-up eg, TradeMe, Xero and 42 Below.

Avoiding any IP speed bumps

One major difference between big companies and start-ups is that big companies can steam-roll over mistakes they make with their IP. Start-ups cannot afford to have such speed bumps. For some, dealing with one or two speed bumps may be fine, but multiple or compounding problems could be crippling. This makes it even more important for start-ups to make careful IP decisions very early on and to get good IP advice from a patent attorney that knows their industry.

I was involved with the preparation of an investment disclosure statement for a well-known New Zealand company that wanted to raise capital to expand their service into the US. They had been running their very successful business in New Zealand for 10 years. Within the space of three hours of searching the US patent office database, I found a show-stopper patent owned by a US company. Patent infringement was certain had the New Zealand company entered the US market. We investigated if the patent was available to license, only to find out that it had been licensed exclusively already. The IPO did not proceed.

The shotgun approach

Start-ups cannot always afford a full suite of IP protection. So, as a start-up, you need to prioritise and stage your IP spend to help achieve your desired overall business strategy. A shotgun approach to IP protection is not realistic. This means that start-ups need to have an even better understanding, compared to larger companies, of the value that IP can have to their business. Start-ups need to make every shot count, especially because the proportional value of IP, compared to the total value of the start-up, is much larger than for an established company. Sometimes IP is the only asset a start-up has.

Types of IP protection

It is vital to know early on what IP protection a start-up can have, what the benefits will be, and what the costs will be to secure such protection over time. It is important not to bite off more than can be chewed.

Some forms of IP protection are not expensive.

  • IT system firewalls help protect your trade secrets.
  • Using non-disclosure agreements (NDAs) can ensure your know-how is not misused.
  • Copyright is free and can protect your source code or manuals from being copied.

Keeping all, or some, IP secret may be the best form of protection.However, the costs of keeping such secrets, or the cost of losing the secrets to your competitor, can also be high.

One employee of General Motors sold trade secrets a few years back, costing the company an estimated $40m of research and developmentspanning over 20 years. It is estimated that trade secret theft cost the US economy $300 billion in 2012.

Failure to protect IP is like not locking up the lab or office every night. Eventually someone will come in and use what is not their own hard work.

The key steps are to:

  1. identify what IP rights are going to have maximum effect in increasing the value of the business
  2. budget to protect your IP and implement
  3. do so early.

The crystal ball

I keep talking about being early with considering your IP strategy. This is because many forms of registered IP rights need to be in place before new initiatives are made public. This means that crystal ball gazing may be necessary. But being equipped with information about what will impact the scope of IP protection, and what you will be permitted to protect as yours, will help crystallise your thinking. Perhaps your invention is not as original as initially thought and, as a result, the scope of any patent will be so narrow that it will be of no commercial value. But on the flip side, the invention may be very unique and entitled to very broad protection.

Another difficulty that start-ups have is crystallising their business model so that the right IP tools can then be chosen to support the model. Changes are often made to the business model of start-ups based on changing exit or market opportunities and FTO risks that may surface down the track. Large companies have the benefit of knowing who they are and how they will grow older. A manufacturer like Gallagher knows its road to market and uses IP to keep competition out of the market. So some degree of a shotgun approach may be necessary, ensuring a regular review of the IP strategy is done so as to cull any redundant IP.

Points to think about

All of these things can help increase the value of a start-up and show you are on the ball with your IP when someone wants to make you an offer you can't refuse. This aspect is really important—being IP savvy and ready for the sale and purchase process, or whatever the next phase in the start-up's life may be.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
James & Wells Intellectual Property
James & Wells Intellectual Property
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Similar Articles
Relevancy Powered by MondaqAI
James & Wells Intellectual Property
James & Wells Intellectual Property
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions