Developing an Intellectual Property (IP) strategy is an important first step for startups to protect their innovations.
 
The IP strategy should take into consideration budgetary constraints, timelines associated with various rounds of funding and investment, along with an understanding of the different potential products, methods of making and using, and/or licensing opportunities associated with the technology to be protected. 
 
Utilizing a mixture of different forms of IP is imperative when protecting your innovation. By communicating with your IP attorney, you will build a real partner with your counsel to better protect your IP.
 
This article guides startups through essential IP considerations, offering insights into patents, non-disclosure agreements, trade secrets, and trademarks.
 
The First Line of Defense: Understanding Patents for Startups
 
Patents are a primary method to safeguard a startup’s innovations. Filing provisional patent applications can be a cost-effective strategy for startups.
 
Provisional patent applications act as placeholders at the U.S. Patent and Trademark Office (USPTO), securing a filing date for the invention without undergoing immediate examination.  By filing a provisional application, an inventor secures an early filing date. This has been particularly important in the U.S. since 2013 when the U.S. transitioned from a “first-to-invent system” to the current “first-inventor-to-file system.”   
 
A comprehensive provisional application should cover not only the current embodiments and/or uses for the innovation, but also potential variations and future applications of the invention. Including any known additional variations or embodiments of the innovation helps ensure that relevant commercial applications are safeguarded against potential competitors, who may try to design around the invention. 
 
Additional benefits of provisional patents for startups include:
 

• Providing additional time (up to 12 months) after filing the provisional application to seek funding, conduct more research, and refine the invention before committing to a more extensive process of filing a non-provisional patent application.
• Securing an early filing date while maintaining the confidentiality of the invention. A provisional application is not made public while the provisional application is pending. A provisional application only becomes public approximately 18 months after its filing date, if a regular U.S. Utility application is filed.
• Labeling your product, if you have one, as "patent pending," which can deter some potential competitors.

 
A provisional patent application provides a 12-month period during which the owners and inventors can further develop the invention, assess its commercial potential, and/or prepare a full non-provisional patent application.
 
During this timeframe, if additional embodiments and/or new methods for manufacture or use are developed, it’s recommended to file new provisional patents to protect these updates as soon as possible, particularly if the company is having meetings with third parties and/or the field is known to have ongoing developments by other parties. 
 
These new filings do not replace the original provisional patent, but rather secure the earliest possible priority date for the updates or new embodiments, in order to protect the innovation as soon as possible.  Subsequently, when the company files a U.S. Utility application and/or a Patent Cooperation Treaty (PCT) or any foreign applications, it can claim priority to all of the provisional applications filed within the 12-month period.
 
Cost-Effective Patent Strategies: Patent Efficiency
 
Cost is often a significant concern for startups.
 
Beyond provisional patent applications, startups can manage expenses by preparing a core application and then tailoring it to multiple, different markets or uses.  Then, if needed, these applications can all be filed on the same date. 
 
By filing these applications simultaneously, startups can avoid prior art issues while ensuring comprehensive protection and simplifying future license agreements with different companies in different markets.
 
Non-Disclosure Agreements (NDAs) for Startups: Protecting Your Ideas
 
Before engaging with third parties, such as potential investors or partners, it is essential for startups to have non-disclosure agreements (NDAs) in place. These agreements ensure that any information, including trade secrets, designs, and processes, shared between parties remains confidential and clarifies what information is confidential and prohibited from disclosure.
 
NDAs clearly define boundaries and expectations for all parties involved in discussions about the invention. In the event of a breach, an NDA provides a legal framework for pursuing action, such as a preliminary injunction, if needed, against the party that violated the agreement.
 
Combining NDAs with provisional patent applications provides a multi-level defense for protecting a company’s intellectual property.
 
Ownership and Inventorship: Clarity is Key
 
Establishing clear ownership of IP is critical for long-term protection. In the U.S., inventors initially own patent rights unless an agreement stating otherwise exists.
 
For startups, this means ensuring that any IP developed by founders, employees, or collaborators is formally assigned to the company. Employment agreements should include present-tense assignment language, such as “does hereby assign”, “hereby conveys, transfers and assigns”, or “agrees to grant and does hereby grant”.
 
Additionally, proper intellectual property ownership agreements should be in place for projects involving joint research or collaboration with third parties.  Clear documentation and executed agreements outlining who owns the IP are especially important if the startup emerged from a university or research setting.
 
If seeking investment or planning to sell as an exit strategy, having documents that clearly assign IP rights prevents complications that can arise during investor due diligence. 
 
Further, documenting inventorship correctly is vital, as incorrect inventorship can invalidate and/or lead to a determination of unenforceability of a U.S. patent.
 
Trade Secrets: Another Avenue for Protection
 
Not all valuable IP is patented or patentable. Some information is better protected as trade secrets.
 
Trade secrets, which include proprietary processes, formulas, and practices, must be protected through internal policies and non-disclosure agreements. Maintaining the secrecy of this information requires limiting access to only those who need to know and implementing security measures.
 
Should a breach occur, a startup must prove it had sufficient processes in place to protect the trade secret, that it was commercially valuable, and that it was stolen (not independently developed) or was used or disclosed without the owner's express or implied consent. 
 
Trademarks: Building a Strong Brand Identity
 
While patents protect innovations, trademarks protect brand identity.
 
Conducting thorough clearance searches before adopting a brand name, logo, or tagline is needed to avoid future legal issues. Startups should consider their target markets and potential international expansion, ensuring their branding is appropriate and protected in all relevant jurisdictions.
 
Engaging with an IP Attorney
 
Choosing the right IP attorney is key for startups. An effective attorney will help the startup understand the complexities of IP law and offer strategic advice tailored to the startup’s goals and timelines.
 
Open communication is a must — startups should share their commercial objectives, data, including what wasn’t successful during the development process, timelines, and potential markets to allow their attorney to provide effective guidance and serve as a true partner.
 
Conclusion
 
For startups, understanding and protecting IP is essential for long-term success. By engaging early in the process with knowledgeable IP counsel, your attorney can strategically safeguard your innovations and build a strong foundation for future growth and business opportunities.
 
It's better and more cost effective in the long run to be proactive about IP protection rather than to try to fix or mitigate issues later.
   
 
Questions about securing IP for your startup? Pabst Patent Group specializes in intellectual property law in the biotech, pharmaceutical, and chemical industries. Our lawyers leverage their deep scientific and legal expertise to create effective IP strategies to create real impact. Contact us today to learn more.