Many start-ups, particularly those in the tech sector, will be aware of the importance of intellectual property (IP) rights to the success of their business. However, many start-up owners would benefit from taking some basic steps to identify, protect and maximise their IP rights.
Stephen Thompson, Managing Partner at Darwin Gray shares his top 10 tips for start-up owners to maximise their IP and business value.
- Take stock of what IP you have with an IP audit.
A lot of start-ups don’t realise the value of the IP that they own – many think that IP refers only to physical products and creations. Undertaking an IP audit can be a useful way to identify what you own, as well as highlighting ways you can protect it. At Darwin Gray, we offer a partially-funded IP Audit, which is a cost-effective way to get a better understanding of your IP. Find out more.
- Maintain good records.
You should always keep good records of all IP development work, particularly during the start-up phase. If a dispute arises with a third party, it may be important to be able to prove that you created particular IP, and when.
- Keep your ideas confidential.
Be careful about sharing details of your IP with others, particularly during the early stages of a business, when your IP may not be fully developed or properly protected. Use confidentiality agreements where possible, but draft them carefully to ensure you are properly protected. If you are hoping to secure a patent for your new invention, confidentiality agreements are a must – openly telling others about your new design will be fatal to a patent application.
- Make sure any third parties that contribute to your IP assign any ownership rights.
Whether or not someone is paid for their work, if they have contributed to your IP the chances are that they will own their designs unless you have agreed otherwise in writing first. This can cause a lot of issues, so make sure that any ownership rights in the IP are properly assigned to your business. This can be achieved in their terms of the business, or by a simple assignment.
- Be careful to avoid infringing any third-party IP.
When developing your own IP, be careful to avoid infringing any third-party IP. If you need to incorporate third-party IP into your own IP, make sure that you have a proper licence to do so and that the third party will not have any ownership rights in your IP.
- Protect your IP from your employees.
You need to ensure that the ownership of all IP created by your employees automatically vests in your business. It’s therefore important that your contracts of employment and staff manuals contain robust IP and confidentiality clauses. Also, consider having a dedicated IP policy for employees and consultants.
- Check contracts with suppliers and customers.
Before signing, always carefully check contracts with suppliers and customers to make sure that you don’t inadvertently give away any of your IP. Even if you are proposing to grant an IP licence to a customer, you will want to make sure that it’s no wider than necessary.
- Agree IP ownership when undertaking joint development work.
If you are proposing to jointly develop a new product or solution (e.g. with a customer), it’s important to agree the ownership of the IP before work starts. This will hopefully avoid costly disputes arising in the future.
- Leveraging the value of your IP.
If you’re looking for outside investment, or thinking about your exit strategy, ensuring your IP is identified and protected will make your business a more valuable commodity for would-be investors or purchasers. On a day-to-day basis, speak with your accountant to make sure you are maximising your entitlement to R&D tax credits which will assist with cash flow.
- Take professional advice where appropriate.
Paying for good professional advice will pay dividends in the long run by enhancing the value of your business.
If you have any questions relating to IP please contact Stephen Thompson, Managing Partner and Head of Corporate & Commercial at Darwin Gray, on [email protected] or 029 2092 8136. For more information, you can also visit www.darwingray.com/intellectual-property