Three Keys for Unlocking Your IP Potential and Securing Funding
When should you start thinking about protecting your intellectual property (IP) as a startup? The short answer would be today! Timely IP protection is essential in obtaining a competitive edge and avoiding unnecessary legal disputes. Furthermore, recent findings show that IP has a bigger impact on attracting investments than previously thought. Continue reading to discover the three key aspects of successful IP protection.
This article was written by Maria Silvia Martinson, Patent Attorney at TRINITI.
Prioritizing your IP can truly be the precursor to your company’s success: it provides you with a competitive advantage in the form of exclusivity of rights, commercialization opportunities and enhanced valuation. You are less likely to end up in draining legal battles with competitors if you conduct freedom-to-operate searches and secure your own rights timely. Protecting your IP is also a major green flag for investors as it signals credibility, a thought-out business plan, potential for growth and increased revenue.
In 2023, a pan-European study was conducted on the role of intellectual property (IP) rights in raising venture capital. It was concluded that European startups that file patent and trademark applications in the early growth stage are 10 times more likely to secure subsequent venture capital funding than startups with no registered IP.
In light of reduced venture capital funding and weaker growth forecasts, protecting your IP in the seed or early growth stage should be at the top of your to-do list, even if it wasn’t before. This stands especially true for deep tech startups which are known to be IP-heavy.
Here are three key aspects to keep in mind for successful IP protection:
Want to learn more? Patent attorney Maria Silvia Martinson and attorney-at-law Peeter P. Mõtsküla will be giving pointers on successful IP strategy development for startups in a seminar on January 25 at 12:00 in Seminar Room 4. Check out the full sTARTUp Day 2024 seminar program.
Prioritizing your IP can truly be the precursor to your company’s success: it provides you with a competitive advantage in the form of exclusivity of rights, commercialization opportunities and enhanced valuation. You are less likely to end up in draining legal battles with competitors if you conduct freedom-to-operate searches and secure your own rights timely. Protecting your IP is also a major green flag for investors as it signals credibility, a thought-out business plan, potential for growth and increased revenue.
In 2023, a pan-European study was conducted on the role of intellectual property (IP) rights in raising venture capital. It was concluded that European startups that file patent and trademark applications in the early growth stage are 10 times more likely to secure subsequent venture capital funding than startups with no registered IP.
In light of reduced venture capital funding and weaker growth forecasts, protecting your IP in the seed or early growth stage should be at the top of your to-do list, even if it wasn’t before. This stands especially true for deep tech startups which are known to be IP-heavy.
Here are three key aspects to keep in mind for successful IP protection:
1. Have an overview of your IP assets
Considering how important IP is – or could become – for your startup, it is essential to have an overview of what types of IP assets the founders, employees or third-party service providers are creating. Ideally, you know who is creating what and this information is being logged to keep track, especially if you provide a multitude of products and services. Having an overview of your assets is important for determining your core assets as well as identifying what additional steps are required for effective protection. The bigger the role of IP in your business, the more you need to keep track of it, deep tech startups being a good example of this.2. Bring your IP “home”
A pivotal step in securing your IP is bringing it “home” by ensuring that your company is either the owner or exclusive licensee of everything that truly matters. There is nothing worse than releasing your long-awaited product only to discover that you cannot modify or even market it without the consent of an ex-employee because the relevant rights have not been assigned or licensed correctly. To ensure that your IP is not scattered among founders, current or ex-employees, and even third-party service providers, bringing it “home” with strong contracts is a must. It can never be stressed enough: legislation alone does not ensure this outcome without contracts in place.3. Register your IP timely
IP is divided into two major categories: copyright (and related rights) and industrial property. Copyright arises automatically at the time of creation, whereas industrial property objects (such as trademarks, designs and inventions) usually require registration. The general rule is to register your IP as soon as possible to make sure no one beats you to it. While there can be exceptions to this rule depending on your IP strategy, you should always keep in mind that some IP objects require registration within a certain time period to be valid. For example, Estonian industrial design, utility model and patent applications must be filed within 12 months from disclosing their subject matter to the public. Otherwise, novelty is ruined, and you’ll lose your chance at obtaining exclusivity.Want to learn more? Patent attorney Maria Silvia Martinson and attorney-at-law Peeter P. Mõtsküla will be giving pointers on successful IP strategy development for startups in a seminar on January 25 at 12:00 in Seminar Room 4. Check out the full sTARTUp Day 2024 seminar program.
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