Startups and SMEs: Think IP!

February, 2018

Congratulations! You have embarked on a new business journey, full of excitement, adventures and challenges.

As you are creating something from nothing, you have the potential to make a positive change on a large scale. By impacting an important number of people with your breakthrough innovation, the field in which you act will never be the same, whether it be technologies, life-science, robotics, financing, e-commerce, fashion or food supplies, to mention a few.

Venturing into entrepreneurship will not be an easy ride and you know well the challenges that lie ahead of you. So many exciting issues in the early life-cycle of your startup need to be considered at the same time and, lucky you, you get to be the conductor of the orchestra and run your business like a Swiss clockwork. While launching a revolutionary product or service, you also need to focus on hiring qualified employees, marketing your products or services, and managing IT, stock, delivery and more. At the very same time, you are contacting potential partners and investors to raise as much capital as you can, which is absolutely essential if you want to grow.

That your project is formidable and has a tremendous potential is obvious, but how can you persuade strategic investors, who are complete strangers, that it is innovative, unique or superior to the offers of competitors, and therefore a sufficiently good bet to fund your startup?

Whether you just launched your startup or you are running a SME, knowing the market, being a domain expert, explaining how game-changing your project is, surfing on a major trend and mastering the art of business pitch are not sufficient. In a world of constant innovation, it is critical to develop and retain a competitive advantage by safeguarding the knowledge, creativity, ideas, work and innovation which constitute the DNA of your business. Therefore, owning intellectual property (IP) rights is crucial to instill confidence into founders and investors, who often hesitate to invest money in something that can simply be copied.

Not only can IP be used as collateral to attract investors and secure the company’s financing, but it is a key consideration which offers multiple benefits and probably constitutes the most valuable asset of your business venture. As they generate revenue, including in the form of licenses, IP rights can be used as a basis for a firm’s growth, valuation and acquisition. Moreover, they enable to protect the core ideas upon which your company is founded, to increase your visibility and to distinguish yourself from your rivals. As an offensive tool, this levier is a useful instrument to take a leap and keep one step ahead, by further minimizing competition and protecting R&D investment. As a defensive mechanism, it can be used as a shield against infringement claims from others. In other words, it constitutes your added value and provides a solid foundation for your enterprise’s future success and a strong defense against infringers.

Still, building a clear IP strategy, aligned with your business needs and development plans, is rarely an easy task. You may perceive it as being distracting, complex, expensive or even daunting. Maybe you do not have the sales, marketing means and economic resources of well-established companies. Anyway, you certainly seek creative ways of reducing or delaying costs and productively investing your limited resources.

Without knowing where to even start, you are therefore inclined, like most young companies, to defer investment in IP. You should know, however, that IP matters are to be taken care of at an early stage. That is, before any public disclosure.

Indeed, it is never too early to protect your achievements. First of all, because while putting your business plan into action, all the preliminary groundwork agreements that you are about to sign with your potential partners are going to have IP terms (grant applications, incubator memberships, joint venture agreements, etc.). Globally, having a proactive IP strategy is much easier and always better than reacting to issues later on, not only on a financial level but also in view of reaping the benefits of your hard work: at some point, you not only want to be recognized as the original creator but also as the sole rights-holder.

Depending on your business area, patents, trademarks, designs, copyright, domain names, know-how and trade secret protection should be considered in your IP strategy. We welcome you in our firm to discuss what types of IP protection will suit you best and help you find your path throughout the IP maze.

 

By Milana Pantelic and Julie Mondon
Trademark Attorneys at KATZAROV S.A.

 

KATZAROV SA
Patent & Trademark Attorneys
Geneva Business Center
Avenue des Morgines 12
1213 Petit-Lancy
Geneva
Switzerland
T +41 22 342 66 30
F +41 22 342 66 15
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