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Legal & Compliance
Intellectual Property for Startups
IP is often your most valuable asset. Here's how to protect it.
For many startups, intellectual property is the core of value. The code you write, the brand you build, the methods you develop—these create competitive advantage. Protecting IP properly isn’t optional. It’s how you ensure what you’re building stays yours.
Types of Intellectual Property
Trade Secrets
Confidential business information:
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Algorithms and processes
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Customer lists
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Pricing strategies
•
Business methods
Protection: Keep it secret. No registration needed, but require NDAs and restrict access.
Duration: As long as it stays secret.
Trademarks
Brand identifiers:
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Company name
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Product names
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Logos
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Slogans
Protection: Use creates some rights; registration provides more.
Duration: Can last indefinitely with continued use and renewal.
Patents
Inventions and methods:
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Novel processes
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Technical innovations
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Unique methods
Protection: Requires registration (expensive, slow process).
Duration: 20 years from filing.
Copyrights
Creative works:
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Software code
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Written content
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Design elements
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Marketing materials
Protection: Automatic upon creation; registration strengthens enforcement.
Duration: Life of author + 70 years (or 95 years for work-for-hire).
IP Assignment
Why Assignment Matters
IP must be owned by the company, not individuals:
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Founders have ideas before incorporating
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Employees create things
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Contractors build for you
Without proper assignment, ownership is unclear.
Founder IP Assignment
When you incorporate:
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Founders sign IP assignment agreement
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Transfers all prior relevant IP to company
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Company issues stock in exchange
Employee IP Assignment
Employment agreements should include:
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Assignment of all work-created IP
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Confirmation of no prior IP conflicts
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Acknowledgment of company ownership
Contractor IP Assignment
Contractor agreements must include:
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Explicit IP assignment clause
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“Work for hire” language
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Clear scope of assigned work
Without explicit assignment, contractors may own what they create.
Prior Inventions
Employees/contractors may have prior IP:
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Document in employment agreement
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Exclude from assignment if necessary
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Be clear about boundaries
Protecting Trade Secrets
What Qualifies
Trade secrets must be:
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Not generally known
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Provide competitive advantage
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Subject to reasonable secrecy measures
Protection Measures
Internal:
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Access restrictions (need-to-know)
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Employee confidentiality agreements
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Secure storage and systems
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Exit interviews
External:
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NDAs before sharing information
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Limited disclosure even under NDA
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Marked confidential
When Sharing Is Necessary
Sometimes you must share secrets:
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Investor due diligence
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Partnership discussions
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Customer demonstrations
Use NDAs, limit scope, track what’s shared.
Trademarks
What to Trademark
Protect your key identifiers:
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Company name
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Product names
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Key feature names
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Logo
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Tagline (maybe)
Trademark Search
Before committing to a name:
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Search USPTO database
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Search state registrations
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Search common law usage
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Consider international
Changing names later is painful.
Registration Process
Steps:
1.
Search for conflicts
2.
Choose appropriate classes
3.
File application
4.
Respond to office actions
5.
Publication period
6.
Registration
Timeline: 8-12 months typical.
Enforcement
You must police your marks:
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Monitor for infringement
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Send cease and desist when needed
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Take action against confusing use
Failure to enforce weakens protection.
Patents
When Patents Make Sense
Consider patents when:
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True technical innovation
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Defensible position matters
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Resources to pursue and maintain
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Time horizon supports
When Patents Don’t Make Sense
Skip patents when:
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Innovation is obvious
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Fast-moving space (patent takes years)
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No resources to enforce
•
Trade secret protection is better
Patent Process
Provisional patent:
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Lower cost filing
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Establishes priority date
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12 months to file full patent
Utility patent:
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Full patent application
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Expensive ($10K-50K+)
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2-4 years to grant
Software Patents
Software patentability is limited:
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Abstract ideas not patentable
•
Must have technical application
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Increasingly difficult to obtain
Open Source vs. Patents
Using open source may affect patent strategy:
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Some licenses include patent grants
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Some have patent retaliation clauses
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Understand what you’re using
Copyrights
What’s Automatically Protected
Copyright attaches automatically:
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Source code
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Written content
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Design elements
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Marketing materials
Registration not required for protection.
Benefits of Registration
Registration enables:
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Statutory damages
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Attorney fees recovery
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Stronger enforcement
Consider registering key works.
Open Source Licensing
If using open source:
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Understand license terms
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Comply with attribution requirements
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Understand copyleft implications
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Track what you use
Licensing Your Code
If others use your code:
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Choose appropriate license
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Document terms clearly
•
Consider commercial vs. open source
International Considerations
Trademarks
Trademarks are territorial:
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Register in countries where you operate
•
File in key markets early
•
Consider Madrid Protocol for efficiency
Patents
Patents are territorial:
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Must file in each country
•
PCT application buys time
•
Very expensive internationally
Trade Secrets
Trade secrets work globally:
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Similar principles apply
•
Local enforcement varies
•
NDAs may need local customization
IP in Fundraising
Due Diligence
Investors will check:
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Proper assignment of all IP
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No encumbrances on IP
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Clear ownership chain
•
Any disputes or challenges
Common Issues
Problems that kill deals:
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IP created before company not assigned
•
Contractor IP not properly assigned
•
Open source compliance issues
•
Prior employer claims
Fix issues before fundraising.
Common IP Mistakes
No Assignment Agreements
Built things without proper agreements.
Problem: Unclear who owns the IP.
Fix: Retroactive assignment if possible; proper agreements going forward.
Contractor IP Unclear
Assumed contractors’ work was yours.
Problem: Contractors may own their creations.
Fix: Explicit assignment in every contract.
Trade Secret Leakage
Shared too freely without protection.
Problem: Once public, no longer a trade secret.
Fix: NDAs, need-to-know access, careful sharing.
Trademark Not Searched
Chose a name without searching.
Problem: Someone else owns it.
Fix: Comprehensive search before committing.
Open Source Violations
Used open source without compliance.
Problem: License violations, forced disclosure.
Fix: Track usage, comply with licenses.
Key Takeaways
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IP is often your most valuable asset—protect it properly
•
Four types: trade secrets, trademarks, patents, copyrights—each needs different protection
•
IP assignment is critical: founders, employees, and contractors must assign IP to company
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Contractors don’t automatically transfer IP—explicit assignment required in every contract
•
Trade secrets need active protection: NDAs, access restrictions, confidentiality measures
•
Trademark search before committing to names; registration provides stronger protection
•
Patents are expensive and slow—only pursue when truly valuable and defensible
•
Open source licenses matter—understand and comply with requirements
•
Fix IP issues before fundraising; investors will do due diligence
•
Get proper agreements in place early; fixing later is expensive
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