Every startup has an intellectual property (IP) strategy. For many, it may be as simple as, “I’ll worry about IP after the next funding round.” Whether articulated or not, a startup’s IP strategy says a great deal about how well its leadership is balancing the company’s short-term survival with long-term growth and success.
Many inventors do not understand a very basic prerequisite to getting a patent: the duty to fully disclose to the United States Patent and Trademark Office (USPTO) how to make and use the inventor’s invention. The rationale for this requirement is deeply embedded in the U.S. Constitution—through amplifying statutes and case law—the implication of which is this: “You (the inventor) tell us what you know and we (‘the people,’ more specifically, the government) will give you exclusive rights to your invention for a certain duration.”
Why should research and development (R&D) teams or organizations care about patents? The answer might surprise you. A recent report by Forbes states that each year R&D introduces more than 250,000 new products into the marketplace. Of those, 66% will fail within the first two years.
In Part 2 of this series, we discussed the need to valuate your IP assets as well as the methods you can use to achieve this end. This final segment focuses on the rubber-meets-the-road question of what kinds of protection should be used for each IP asset and how much should be spent on that protection.
Patents, trademarks, and copyrights are commonly known as “intellectual property” or IP. As occasional high-profile lawsuits between large corporations illustrate, IP can be extremely valuable, causing companies to budget significant amounts of money to acquire, defend, and assert IP rights. The concept of IP can be controversial, prompting various constituencies to condemn the entire idea (e.g., as dampening innovation or hampering individuals and smaller entities), or to object to the vast sums spent on high-profile lawsuits and their resulting awards/settlement.
“How do I valuate my various IP assets?” At the outset, we recognize you likely already appreciate the difficulty of answering this question from first-hand experience. IP valuation is a complex, multivariable task and an industry unto itself. That said, this task is not impossible and can be approached from a number of ways, as we now discuss.