Navigating intellectual property protections and issues can be a complicated and challenging process for emerging companies. In the fast-paced start-up world, it is not unusual for IP concerns to take a backseat. But disciplined and proper IP management is critical to any emerging company. Strong IP rights can be used to impose a barrier to competition, generate a portfolio of assets that can be leveraged, and help increase the value of a business. Here are four essential steps to protecting and strengthening your IP assets. :
1. Insist that developers assign all IP rights to your company
Anyone who creates IP for a company should be under a written obligation to assign the rights in such IP to the company. This includes employees, independent contractors, suppliers, other developers and even company founders. Often, companies assume that because they are paying for development work, they own the results of the development. However, this is usually not the case, especially with respect to independent contractors. When it comes to development, having a written agreement that details assignment obligations is always a wise approach.
2. File early for patent protection
Patent protection may not be a top priority for an emerging company during its early stages due to cost concerns or because an invention has not yet perfected. But often, it is the technology developed during the early stages that ultimately has the most value. A wait-and-see approach to patent filing carries with it certain risks. For example, in the United States, a patent application must be filed within one year from the first public disclosure (i.e., a non-confidential, enabling disclosure of an invention such as a public use of the invention, a sale of the invention, an offer to sell the invention, a journal article describing the invention, a trade show presentation or the like). In addition, the United States operates on a first-to-file basis, meaning that the first person to file a patent application has rights for protection of the invention. As such, waiting to file for patent protection risks someone else filing first.
3. File for patents before public disclosure—especially for foreign protection
Although the United States has a one year grace period during which a patent application can be filed after a public disclosure, the majority of countries outside of the United States do not have comparable grace periods. Unlike the United States, a public disclosure is considered a bar to patentability in these countries. If foreign patent protection is part of a company’s IP strategy, then it is important to file a patent application before a disclosure in order to preserve foreign rights.
4. Understand and comply with the terms of your open source software
Open source code is often an efficient and cost free solution for emerging companies. Although use of open source software may be free of monetary cost, it is not free of responsibility. As a general rule, users may not use or distribute software without a license from the owner. And this rule applies equally to open source software despite its being publicly available or available for free. Like commercial software, the use of open source software is usually governed by a license agreement that includes terms and conditions controlling use of the software. It is critical to understand the license terms and also how conditions may apply to open source software usage. In addition, it is important for users to understand the terms of any viral open source software, especially if the open source software is being combined with or integrated into proprietary software. Failure to do so could lead to an obligation to make proprietary source code available under a similar license.