Understanding the market and its IP landscape will help you assess potential opportunities and also demonstrate to investors that you have a good understanding of what third party IP rights exist and how they can impact your innovation or brand.
Burying your head in the sand now could lead to costly and time-consuming legal problems down the road. More often than not, companies only become aware of IP infringement after receiving a cease and desist letter. At this stage it is usually too late to take any preventive action, and significant costs have already been spent in R&D and more costs can be incurred in defending your company against an accusation of infringement.
Since developing market awareness from an IP perspective is crucial in steering your IP strategy in the right direction, a simple place to start would be to ask these key questions.
1. WHERE SHOULD I PROTECT MY IP?
Having no IP protection, or only protecting yourself in a limited number of markets, can diminish the value of your start-up in the eyes of investors. You need to check whether you are protected in important markets, which can depend on the location of your consumers, manufacturer and competitors. These checks and any necessary corrective actions must be performed as early as possible to avoid losing IP rights due to missed deadlines and time constraints.
2. IF I AM PROTECTED, CAN THIRD PARTIES STOP ME FROM USING MY IDEA?
Having IP protection does not automatically confer the right to commercially test, market or sell your IP-protected innovation or brand. On the contrary, your ability to carry out your commercial activities may be restricted by the existence of third party IP rights. Thus, irrespective of whether you have any IP rights in place, establish whether your start-up is free to perform your proposed commercial activity in view of third party IP rights, which is commonly known as freedom to operate.
3. HOW CAN I ESTABLISH MY FREEDOM TO OPERATE?
Clearance searches may be performed to establish your freedom to operate by identifying third party IP rights that belong in a specific field or to a certain competitor. Whilst clearance searches are by no means a cheap process especially if conducted by professionals, omitting this step may discourage investors from working with you due to lack of information about IP infringement risk.
4. HOW DO I MANAGE THE HIGH COSTS OF CLEARANCE SEARCHING WITHIN MY START-UP'S BUDGET?
Initially you can mitigate risk and manage costs by doing your own searches, maintaining watches for the publication of competitor’s rights and undertaking clearance searches for any proposed brands and trade marks. However, once your start-up moves closer to launch, the need to establish a clear freedom to operate becomes more crucial, which is when extensive searches and legal opinions by professionals may be required.
5. WHAT SHOULD I DO IF MY PROPOSED COMMERCIAL ACTIVITY IS AT RISK OF INFRINGEMENT?
After doing the searches, you can seek legal advice on infringement risk or how to avoid infringement. If necessary, approach the IP rights holder to purchase or license the right, or take steps to challenge the right. This however can bring unwanted attention to your start-up because the IP rights holder now has reason to suspect that you are either infringing or planning to infringe. Alternatively you can change your innovation or brand to avoid any restrictions imposed by the third party IP right.
To find out more about how we can help university start-ups develop their own IP blueprint for securing investment, please contact Jason Teng at jason.teng@potterclarkson.com and Sara Holland at sara.holland@potterclarkson.com.
