Software solutions can make it possible to create substantial businesses from simple ideas, for example Uber and Airbnb. However, unless technological systems are protected by a suitable legal framework, businesses can lose the commercial advantages that their innovation has given them. Shireen Smith believes that IP is the foundation of any business and companies should ensure that it is protected as early as possible.
Shireen said, Because of the competitive and fast-moving nature of the technology industry, it is vital that tech startups consult an IP specialist as early as possible. Thats because IP law can sometimes lead to surprising results. For example, you might find that the person with ownership rights is not necessarily the one you expect.
If there is something to patent, then invariably filing for patent protection is necessary before even sourcing the funding for new software or technology.
In their haste to rush to market quickly, many entrepreneurs are making a classic mistake: failing to protect their IP before revealing their ideas. Patents are only granted if an invention is novel and has not been disclosed to third parties. Therefore, startups which raise investment through crowdfunding sites before securing a patent lose the possibility of patenting the concept later on.
Many entrepreneurs fail to seek legal advice before trying to raise funds through crowdfunding sites. They naively assume these sites must have thought through the legal aspects on their behalf.
However, in practice they need to find the funds to file an initial patent pending application before speaking to angel investors or seeking crowdfunding because few investors agree to sign non-disclosure agreements (NDAs) before listening to an opening pitch. It bolsters a businesss credibility enormously if it has taken steps to protect its IP beforehand.
Shireen continued, Another danger associated with using crowdfunding without appropriate IP protection is that well-resourced competitors are scouring these sites and are free to exploit the technology or concept you just shared with the world. Innovators often sabotage their own ideas by alerting businesses to it who are well placed to copy it.
Another issue is technology startups unwittingly infringing on the rights of others. Formlabs, a team of PhD students, managed to raise just under $3m (2m) to commercialise an accessible 3D printer. But the virtual high fives soon turned sour as an established company, 3D Systems, sued them for patent infringement.
IP has a potentially transformative effect on a business. If a fledgling technology company can claim sole rights to its software or systems, it can compete with the larger firms.
On the evening of October 13 at the Institute of Directors, Shireen Smith launches a new book called Intellectual Property Revolution, which is all about how to successfully manage IP assets, protect brands and add value to your business in the digital economy. It is written in plain English and is helpful for business owners and brand guardians.