United States: Top Tips For New Businesses: Essential Intellectual Property Considerations

As a new business, developing an IP strategy from day one is essential. IP is one of your company's most valuable assets and therefore laying the foundations for robust long-term protection should be of top priority.

The type of IP protection you choose will depend on a range of factors including the shelf-life of your product, who your target audience is, how your product will be delivered to your customers i.e. online or in person? Such consideration should be conducted at the business planning and development stage to ensure you accurately forecast costs and prioritise your investment.

What types of IP protection are available?

1. Confidential Information

As a business in the early stages of development, you may have concerns when approaching potential investors or suppliers about whether such discussions are protected against unauthorised disclosure. It is highly recommended that in advance of disclosing sensitive information about your business or product, you should obtain a signed non-disclosure agreement to protect your IP. 

It is also recommended that dated records are kept regarding all aspects of your IP, including statistics on how widely any trade mark is used, lab books detailing new inventions, copies of all agreements and minutes of confidential discussions as you may need to rely on them in the future as evidence in the event of a breach of confidence, or challenge to any unregistered rights.

2. Trade Marks

A trade mark registration can be used to protect your company's brand i.e. your business name or logo, the shape, colour or packaging of your products, etc. It is good practice, prior to choosing branding, to conduct a trade mark clearance search to determine whether any elements of your brand would infringe existing IP rights on the market in your territories of interest.

Once you have chosen a trade mark (tips can be found here), and determined it is free to use, registering your brand in the territories you intend to conduct business in, is the safest and easiest way to deter other companies from using it and to take action against infringers and third parties who adopt similar branding.

3. Patents

Patent registrations can be used to protect your inventions and give you the right to take legal action against anyone who manufacturers, sells or imports your patented products in the absence of your consent. A patent is a valuable monopoly lasting up to 20 years.

The decision to patent largely depends on the industry, for instance, where production costs are high, but the product can be easily copied, it would be wise to secure patent protection. For an invention to be patentable, it must be capable of industrial application (an invention that can be made or used), it must be new and involve an inventive step, i.e. it must not be mere modification of an existing invention or obvious to a skilled person in the art.   

4. Copyright

Copyright can be used to protect literary, dramatic, musical and artistic works as well as software, web content and databases provided the work is original. Sound recordings, photographs as well as film and television recordings, also give rise to an automatic copyright in the UK.

If you license the use of your work the third parties or agree to sell or transfer your work, it is recommended that you have a solid written contractual agreement in place to record the terms of agreement.

5. Designs

You can obtain a registered design right in the shape and configuration of your product in the UK for up to 25 years. In the EU, registered designs protect the appearance of the whole or a part of a product and can be renewed for up to 25 years.

While obtaining a design right is cost effective and simple, enforcing and defending your rights can be more difficult. For a design right in the UK or EU to be valid, it must be new and possess individual character; both of which are assessed with reference to the existing prior art.

6. Trade Secrets

Where a creation is not patentable or where a business decision is taken not to acquire registered protection say for security concerns over public disclosure, you can still protect your intellectual property in the form of trade secrets. In common law jurisdictions this would be protected by an action for breach of confidence.  Famous trade secrets are the recipe for Coca-Cola® and the WD-40® formula.

There are safety precautions one should take to ensure you can rely on rights protecting confidential information if ever there was a breach. Such precautions include, controlling internal access to confidential information, requiring employees to sign confidential agreements and where external involvement is required obtaining non-disclosure agreements.

Financing your IP protection

IP is a worthy investment, and there are various loans, grants, and tax relief schemes specifically aimed at UK & EU SMEs to assist with the financing your IP. For example:

  • If you live in the UK and your business has been operating for less than 24 months, you are eligible to apply for a government-backed start-up loan of £500 to £25,000 to start or grow your business. For further details and to apply, see link here.
  • The UK government offers four venture capital schemes designed to help SMEs grow by offering tax relief benefits to investors. Click here to determine whether your company is eligible.
  • The UK's Innovation Agency offers various grants for game-changing business ideas which focus on technological advancement. These are awarded through regular competitions. For further details of the current competitions available, see link.

This article is provided as a general guide when considering your intellectual property needs as a new business. However, each business model and jurisdiction are different, therefore, should you require any specific advice and guidance, please do not hesitate to contact one of our IP Practitioners based in the London Office. 

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.

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