There are a million and one things to think about when launching a new business− from employees, partners, suppliers, lenders and investors to just making a product that works and that people want to use. It can be tempting to let many legal issues slide. However, for several reasons, properly identifying and protecting your intellectual property assets should be viewed as a priority from the very beginning.
Protecting your intellectual property preserves the value you create in your company in two main ways.
First, there is value in the brand you are creating and developing, i.e. your name and even your look and feel. Apple’s brand itself is estimated to be worth $153 billion− almost half of its market capitalization. Trademark protection is the primary method by which you will protect your brand. However, not all brands can be protected by trademark. You should not invest time and money in a brand until you know that it qualifies for trademark protection.
Second, you are creating value in the original aspects of your products or services, original content you create for marketing or other purposes, original processes you design that create efficiencies or otherwise give you a competitive advantage, or other aspects of your “secret sauce.” Intellectual property tools, such as copyright, patent and trade secrets, allow you to protect your “secret sauce” from misappropriation by others. It is important to understand when you are creating intellectual property assets in your business and takes the necessary steps to protect them.
Intellectual property tools are not just defensive mechanisms, however. They are also the means by which you identify value so you can “monetize” it, i.e. sell it, license it, or even use it as collateral for a loan.
A useful analogy is the tools used by ranchers (branding irons, fences, etc.) to identify and separate their cattle from both wild cattle and cattle owned by others. If you can’t point to it and prove you own it, lenders, investors, and potential buyers are unlikely to attribute any value to it.
Trademarks, patents, copyrights, and trade secrets are the tools that enable you to point to and prove you own the intellectual property assets you’ve created in your business. A properly maintained intellectual property portfolio can generate much more favorable terms for a bank loan or investment, additional revenue streams via licensing deals, or even a significantly higher price paid for your business should you sell it in the future.
Experienced entrepreneurs know that planning for a new business, right from the beginning, should include careful consideration of how you can create valuable intellectual property assets and the steps you need to take to protect and monetize them.