Business Insider

Why tech startups need intellectual-property plans

Idaho has enjoyed dramatic growth in the technology sector over the last decade. It can boast of several successful tech startups. An increasing number of entrepreneurs and emerging companies call Idaho home.

While those who launch startups in Idaho enjoy a low cost of living and a desirable lifestyle, they face many of the same challenges and risks faced by their counterparts in other states. One is the need to develop a comprehensive plan that addresses securing and protecting the company’s intellectual property. Failure to develop such a plan could mean the difference between a successful startup and a failed one.

An intellectual property plan should first identify and protect the company’s IP. For example, a startup should ensure that its name, slogan or logo are entitled to protection under trademark law and do not infringe others’ trademark rights. Failure to do so could push a startup into an unwanted lawsuit, force the company to rebrand itself, or both. Startups can ill afford this kind of hassle and expense.

Startups in the business of inventing should also consider the best and most cost-effective means for protecting their inventions. For many companies, patent protection is the answer.

But securing patents can be expensive and time-consuming. Maintaining IP as a trade secret often is a better route.

A comprehensive IP plan should also address how to handle claims that the company has infringed IP rights. Unfortunately, as the startup becomes more successful, it becomes more vulnerable to attack by non-practicing entities — “patent trolls.”

These are often shell corporations that buy patents and sue companies based on alleged infringement. These lawsuits can be expensive, damaging ordeals. The companies make no products and provide no services. Their business model consists entirely of monetizing their patent portfolios. Defending these cases in court can be costly, so most companies settle.

Congress and several states, including Idaho, have passed legislation to curb abusive patent litigation, but these companies still flourish.

Intellectual property disputes can be prevented. There are resources for Idaho tech companies — starting with the Idaho Technology Council — that can help business owners navigate these difficult challenges.

Dana Herberholz is a registered patent attorney and shareholder at Parsons Behle & Latimer in Boise. 208-562-4900; DHerberholz@parsonsbehle.com. This column appears in the Nov. 16-Dec. 20, 2016, edition of the Idaho Statesman’s Business Insider magazine.

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