Intellectual Property Law for Small Business
Article

10 Common Intellectual Property Mistakes Startups Make

While most startups are spending all their focus on developing the next big idea and getting that idea to market, protecting intellectual property can often get bumped on the list of things to-do.

However, not taking the right steps can be devastating to your business.

Fortunately, you can avoid many of these mistakes without spending substantial time or money. Here are ten mistakes your can easily avoid.

1. Using Materials from Previous Employer

Be careful how you use your business experience. If you are starting a business in a similar field to your previous employer it can be tempting to use some of the same strategies or techniques as you used there. They are often used without thinking – simply the way you have always done things. But this mistake can be fatal to a business, and may leave you with a criminal liability. So before you finalize your business plan, take a step back and consider if any of the strategies, processes or technologies could be seen as infringement.

2. Failing to Research Your Competition

Market research in the planning stages of your business is essential for so many reasons. One of those is competitor analysis. Part of that process is not just their sales and marketing strategies and profitability, it also includes their intellectual property, such as products, services, goods and concepts they have patented or have under copyright. Failure to conduct your due diligence can be seen as willful infringement. And, conducting the research will help you know if you have the freedom to operate how you want to.

3. Registering Your Business Name

So, you were able to register your business name with BC Registry, but did you check in the other provinces? Did you check the Canadian Intellectual Property Office (CIPO) database? It’s easy to assume that if you register your business name with one agency that if it is protected from infringement, but you must first cover all your bases.

4. Registering Your Web Name

Registering your business does not meant that you are entitled to the domain name that you want for your business website. Just as registering your domain before your business name does not mean your name will automatically be protected.

5. Narrow Patent Claims

When writing business plans and completing business forms, you are consistently told to be specific. Making patent claims is the one area you can afford to be broad. Narrow claims can mean that a rival business can sidestep the claims and exploit the innovation.

6. Filing Patents Too Late

Before you start talking about your idea or product in public, first consider registering a patent. By disclosing too much about your innovation in public you could jeopardize your right to obtai the patent that will prohibit others from making or exploiting your ideas.

7. Moral Rights Waiver

Although everything your employee creates for your business is owned by you, the employer, the authoring employee or the creator of the work, by default retains moral rights. Moral rights have been created to protect the integrity of work and prevent editing of things like a piece of code, a logo or a marketing plan. This can mean that your employee is able to exploit the work to their own economic advantage, should they wish or know this. To protect your business, consider including a moral rights waiver in your employee contracts.

8. Copyrights to Your Design

Similar to the moral rights of an employee, your graphic designer and web designer both own the copyright to your logo and web design, as they are the creators of the product. It is therefore important to add a clause to your contract agreement, which signs over the copyright of the designs to your business.

9. Due Diligence Overseas

It can be tempting to outsource the manufacturing of your product to an overseas supplier. However, your intellectual property is only protected in the jurisdiction that it is created in. Even if you can or do register your intellectual property in that overseas market, countries like China are notorious for infringing these rights. It therefore pays to be prudent and only send the products or pieces of products overseas that you can afford to have stolen and keep the rest to manufacture at home, under the laws that protect you.

10. Using Website Templates for Contracts

When creating employee contracts, non-disclosure agreements etc. for your business it can be tempting to use online templates. However, even if these templates are from reputable sites, it is essential you do your due diligence. Many templates are created in the US and include terminology or clauses which are not relevant to Canadian law.

Why Intellectual Property Mistakes Matter

With the startup phase of business, comes the search for investment. It is here where your intellectual property will come under the most scrutiny. Investors will conduct their own due diligence into your business before putting any money in the pot. If your intellectual property assets aren’t registered, or registered incorrectly, you may experience some serious problems. So, do your due diligence before the investor does and make sure you tie up any loose ends to your intellectual property ownership.

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