Over the past few decades the economy has shifted from one driven by bricks and mortar to one of bits and bytes. And the best way of defining and protecting a knowledge-based economy is through intellectual property (IP). “There has been a significant increase in technological advancements not only by large companies but also by individuals and start-up businesses,” says Eugene Gierczak, a Partner with Miller Thomson LLP and Leader of the National Intellectual Property/Information Technology Group. There are generally four ways of protecting intellectual property—patents, trademarks, copyrights and designs—and with the speed and ease with which we can transfer information, it is even more important to ensure these protections are put into place. “I believe that innovation is going to become a key player in dragging us out of this recessionary climate,” says Gierczak. “And when it comes to small companies and start-ups there are 10 areas that are really important.”
1. While some start-up businesses may want to try to incorporate themselves (in hopes of saving money) this can cause difficulties. By seeking legal help, companies can avoid problems by incorporating with a correct set of by-laws and in the appropriate jurisdiction.
2. While inventors and innovators are very good at what they do, they may not necessarily be knowledgeable in terms of making business and legal decisions. It is best to obtain advice from a lawyer or accountant rather than simply going online and trying to make important decisions based on anecdotal advice.
3. Many start-ups either price products/services too high or too low, planning only for the moment and not thinking about the future. By obtaining counsel from lawyers and business advisors, entrepreneurs can establish a price that will be congruent with profitability and growth.
4. Start-ups must keep accurate and up-to-date records of all agreements.
5. Be sure to document inventorship and ownership of patents and copyright, especially before the patent application has been filed. Also, document the originality of the ideas and any patent searches that have been conducted through a patent office or online.
6. If an entity is looking at disclosing its invention to a potential partnering company, then they must have a binding non-disclosure agreement in place in order to protect their intellectual property. It is best to contact an IP lawyer who will help sort out the various details.
7. If the start-up is looking to approach investors for funding it is important to consider any security law issues. Some entrepreneurs are not aware that the laws which affect public companies may also impact private companies.
8. Some small businesses have a tendency to blindly use the agreements of others (found on the Internet) rather than seek out tailor-made agreements, which require legal input to avoid future difficulties.
9. It is essential that all businesses have a “document retention plan” and that they implement an information technology database to store all information agreements and licensing documents in case of any negative occurrence.
10. Finally, high-tech businesses should consider locating a lawyer who has expertise in dealing with the specific field of information technology.