Intellectual Property Punch List for Startups

By: BRENT C.J. BRITTON

When you create, design, or invent things, the rules of intellectual property (IP) determine who owns your creations, whether or not you can prevent other people from copying them, and whether or not you yourself can use them freely. If you are starting a company, you should know enough about IP to make intelligent decisions about your business to add value and reduce risk.

IP law is esoteric, arcane, and often counterintuitive. Normal business assumptions do not always apply, and can prove to be dangerous. Aggressive, thoughtful management of your IP portfolio is a sound business practice, and you should start as early as possible.

You don’t have to know a ton about the theoretical philosophy or legal underpinnings of IP in order to use it effectively. As you begin your entrepreneurial saga, be sure to pay attention to the following IP issues:

Clear trademark rights before naming things

You cannot use a brand in commerce if your use would be confusingly similar to someone else’s brand. So, do not name your company or your product or service without clearing trademark rights first. Once you choose your name, scour the internet using the search engine of your choice to ensure no one else is using it as the brand name of similar goods or services. Also check the TESS trademark database at uspto.gov to see if your name turns up. Remember that trademarks are compared on the basis of their overall visual and phonetic impression, so clever spelling inconsistencies–substituting a Z for an S, for example–should be ignored in this process.

If you cannot find your name in use anywhere else as the brand of similar products, go ahead just in case and have a formal trademark search conducted by a competent trademark lawyer. They can tell you whether you will be able to get a trademark on your brand and, perhaps more importantly, whether someone else is going to sue you if you start using it.

Then, and only then, is it safe to start naming your company and branding your products with the name that passes through the above clearance process. Remember, trademark rights are obtained neither by forming your corporation or LLC at the secretary of state’s office, nor by registering a domain name. Those ministerial items, while important, do not matter to the trademark process and should happen only after trademark rights are clear.

Everyone signs the agreement

Have your lawyer prepare a short noncompetition, nondisclosure, and IP ownership agreement to be signed by every co-founder, employee, independent contractor, and anyone else in the company who is contributing to the conception or development of creative and innovative assets. The agreement should ensure that: (i) everything they create is owned by the company; (ii) they are bound to keep all company information confidential; and (iii) they will not compete with the company while they are working for it (and, depending on your state, for some time thereafter).

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