You need to take into account a number of things when building a successful startup, but none as important as intellectual property (IP). While the word is often thrown around and most entrepreneurs know about it by now, it still creates a lot of trouble for startups. While big companies are spending millions to protect their IP, startups can forget to look into the matter altogether or make silly mistakes.

Yet getting it right could be the difference between building a successful business and going bust. The following guide will help you understand the importance of IP and the most common mistakes startups make. More importantly, the guide will show you how to avoid these mistakes and plan your IP to succeed.

Common Intellectual Property Mistakes Startups Make

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In this article, we will explore 1) what IP is and why it matters, 2) common mistakes to avoid with intellectual property, 3) planning tips for startups, and 4) conclusion.


So, what is IP all about? In short, IP refers to inventions and creations of the mind. This could be a piece of art, like a symbol or a specific design, or the names and images you use for commercial purposes. They act similar to other property rights, in that they provide the creator or the owner of that product the possibility of benefiting from the creation.

Intellectual property is protected by law – there are different country-specific legislations, as well international laws that govern intellectual property rights. The laws used for protection fall under the following categories:

  • Patents – Patents cover products or processes, or the way things operate. The product or process must be original and inventive in comparison to ideas that are already out there. It is possible to file country-specific patents or apply for an international patent. A software program could be an example of intellectual property covered by a patent.
  • Trademarks – Trademarks protect the signs and designs, which distinguish the product from that of other traders. The Facebook logo and the Apple logo are examples of trademarks. Interestingly, you could also get a trademark for a specific smell or the product’s design, like a special bottle.
  • Registered design – Registered designs protect more deeply the way things look. A specifically shaped mobile phone or a pattern in a pair of jeans could have a registered design.
  • Copyrights – Copyrights protect the business or person’s artistic work from being copied. This could be the copy of a website or the content of a book, for example.

Check out the YouTube video below for more information:

Why does it matter?

The above should help you understand what intellectual property is, but it might not explain why it is crucial for a startup (or indeed any business).

There are a number of reasons for paying attention to the importance of IP. In short, the proper implementation of intellectual property will provide a startup with:

  • Protection – IP will provide a startup more protection against copycats. This in turn, will naturally provide more leverage against competition. Other businesses won’t be able to use your brilliant business idea and benefit from it. You’ll be legally protected – in case someone uses your product ideas without permission, you’ll have the law on your side and you can seek compensation. You won’t need to worry about a costly lawsuit, such as the one filed against Facebook.
  • Security – The business will enjoy more security against theft, for example, once IP is sorted. Furthermore, appropriate IP can protect your customers as well, as they are purchasing from a legitimate company that upholds their consumer rights. It also guarantees counterfeit products don’t become a headache you need to deal with down the road.
  • Leverage with investors – Another big benefit for startups is the improved attractiveness to investors, if you have sorted out IP rights. Investors know it adds more value to your startup and seeking financing is much easier once you have IP sorted out. This doesn’t necessarily mean a fully planned and organized IP system, but you should show investors that you at least understand the importance of IP and know how to go about achieving it.


As the above shows, intellectual property has plenty of benefits for startups and getting it sorted out will help your business to succeed. But unfortunately, many startups still fall for some of the common hurdles when it comes to IP.

Here’s a look at the most common IP mistakes and how you can avoid making them with your startup. First, it’s a good idea to look at the big picture and the crucial mistakes you need to avoid.

1) Assuming it’s unimportant

Among the biggest mistakes you can make is to assume IP doesn’t matter. Fixing your IP rights after you’ve already been operating the business will be a long process and not often even possible. For example, for a patent application to go through, the idea needs to have been out of public knowledge. As soon as you have put it out there and marketed your product, getting a patent will become a lot more difficult.

It’s also a lot more costly to start fixing the lack of IP, rather than spend money on sorting it out from the get-go. You might be faced with lawsuits, people might already be using your product design or names and sorting this out once your business is up and running won’t be easy.

As soon as you have a business or product idea and you’ve spent some time ensuring the plan could work, start looking into intellectual property.

2) Not doing sufficient research

Research isn’t just crucial in order to protect your intellectual property against other people using it. While it is naturally important to guarantee your intellectual property isn’t stolen and you are protected in the long-term, proper research can also save you from breaching another’s IP rights.

If you don’t look into trademarks, patents and trade designs, you won’t know whether someone has already protected a similar product. You don’t want to be breaching other peoples’ IP, as this could end up being the end of your business.

As well as ensuring you do enough research to protect your own products and ideas, make sure you also look carefully into the protection that is already out there. If you conduct proper research from the start, you can protect your business from any legal and financial troubles later on.

3) Rushing through the process

Many startups do understand the importance of sorting out IP. The problem is that many of them then decide to get it all sorted out quickly, without paying enough attention to the whole process. Sorting out IP matters won’t happen overnight and you don’t want to make mistakes by rushing your project.

The process of getting your intellectual property applications through isn’t always a straightforward process. The process can be complicated and costly and you don’t want to end up doing it more than once.

You also don’t want to waste money seeking a patent or a copyright for products that cannot receive one. For example, there are a number of technologically advanced systems that you might not be able to get a patent for or you might not need one in the first place.

Don’t just expect that every aspect of your business and product require intellectual property protection. First, understand what requires IP protection and fill out the application carefully afterwards. Don’t try to rush into anything.

4) Waiting too long

On the other hand, you can’t sit still and ponder about the IP issues forever. Especially if your startup is already running test or marketing groups and you are involving other people in the process. You need to act swiftly to ensure it isn’t too late to start protecting your intellectual property.

In most countries, applications for intellectual property rights have deadlines. For instance, a patent often must be filed within one year of it being printed, disclosed or offered to be sold. Similar time periods are in use around the globe so you need to make sure you start looking into intellectual property as soon as you have your business idea.

5) Using DIY strategy

The Internet is great for finding out more about legal proceedings and the processes behind setting up a business. Technology has empowered many entrepreneurs to take back more control. Using these online guides and tips can be a great way to save your business some money.

But the ‘Do It Yourself’ (DIY) approach can be the downfall of many companies, especially in the more difficult areas such as IP. While guidebooks like this can give you a better understanding of the processes and the importance of IP, it is essential to consider seeking out an expert’s opinion.

Generic information about IP will guide you in the right direction, but it can’t answer the more intricate details concerning your business. A legal expert in the field of intellectual property is much more able to ensure your business covers all the key areas.

The above mistakes are commonly made by startups and just by avoiding them, you can guarantee your startup is appropriately protected. But there are also more specific types of mistakes startups tend to make.

These include the following:

Having problems with the name

You might have come up with a catchy name for your business; you go through all the planning and setting up only to receive a notification the name is already trademarked. On the other hand, many startups set up and conduct business for years until they find one day that there have been new companies popping up using the same name.

Many startups also make the mistake of checking out a domain name and if it’s free, they assume the business can be registered with that name. Furthermore, many assume that by registering their business, the trademark of the name is also covered. But this doesn’t automatically happen; you need to register both – often separately.

When you are planning to start a business and you come up with a name, run a domain check and a business registration check. If both are clear, you should also check if the trademark is still free for use. Do all three checks before you register any of them or start using the name.

Signing the wrong contracts

Startups tend to be organic and often have a structure of informality. While these can be great in fostering innovation and ideas, you still need to make sure the formal aspects of running a business are taken care of appropriately.

It is easy to overlook the importance of having your intellectual property rights sorted and then including these into all agreements you sign with your employees and your business partners.

For example, you might ask an outside contractor to design a website for your company. If you don’t sign the right contract to commission the work, the contractor might end up with the intellectual property rights for the design! Whether you are creating a contract with your employee or another business, you need to make sure the contracts spell out the full rights of the products and design for your business.

When you are preparing the documents and contracts, again, professional help is often needed. A DIY approach to contracts can result in omitting certain information and you might not cover all the essential points. Furthermore, if you are using a professional, such as a freelancer, make sure they have the right qualifications and know how the legal system in your country works!

You also shouldn’t assume the documents you find on the Internet are appropriate to use. Sometimes this ‘copy & paste’ approach can lead to many problems.

Forgetting about trade secrets

Many startup ideas and products have their foundation elsewhere. Perhaps you were working for a technology employer and suddenly came up with a great idea for your own business. You might rush to start your business without realizing you are using trade secrets of your previous employer as part of your business idea.

There are tons of other types of information from prior employers that startups can utilize. These could be trade secrets, but they could also be customer lists, management strategies and the use of computer software. It is easy to overlook their importance to the previous employer or forget they might be covered by legal contracts.

Companies, especially the big ones, are aggressive in protecting their intellectual property – as they should. Forgetting about trade secrets such as this cannot just cost money for your startup, you might be found to be criminally liable for the breach.

You need to make sure you carefully look at your project and business, and separate the areas that you might be carrying over from your previous employer. Make sure you check that using the information isn’t a breach of intellectual property.

Using open source software

Open source software is a wonderful thing, but startups can make a number of crucial mistakes when opting to use it. While it might sound like a great idea, you can quickly contaminate the whole project by using open source software.

If your project uses open source, even in small bits, you might need to disclose the source code to your competitors. This might mean you cannot file for intellectual property protection.

The best option is to avoid using open source software altogether. If you must use it, you should consult a legal advisor before the final decision to guarantee you won’t hurt your business by doing so.


The above mistakes and tips on how to avoid them should help your startup in the planning process. On top of this, here are few more crucial tips to keep in mind when you start planning for intellectual property rights:

  • Begin by understanding as much about intellectual property as you can. By reading this guide, you are already on the right path. Educate yourself as much as you can and start looking for expert help as well.
  • While you need to begin looking for outside expertise, you don’t need to do it right from the start. Doing your own searches first can help you save a lot of time. For example, brings up a plethora of information for finding out about existing patents.
  • Find yourself a good intellectual property lawyer. Don’t hire the first one you find, but look into their qualifications and remember to agree on the price before signing a
  • Conduct an audit on your startup’s products and services to ensure you understand which aspects need protection.
  • When you know what you need, start filing as soon as possible to ensure you do everything on time.
  • Consider the future. You need to know the outlook of your business to ensure you are adequately covered for the future.


If you want to protect your startup and ensure it has the best possibilities to succeed, you need to make sure you pay attention to intellectual property rights.

Figuring out what your business needs is going to be easier to do right from the start, as it can prevent you from making mistakes or allowing other people to benefit from your ideas.

While professional services can cost a lot of money and your startup most likely doesn’t have a never-ending financing stream, in the long-term figuring out IP at the start and ensuring you do it exactly right will end up costing less. It gives you financial security and it could spark interest in investors.

Don’t try to save money by doing it all yourself either. As the above showed, a DIY approach to IP can sometimes end up in a disaster no matter how much you’ve tried. Just start planning early and ask for help from seasoned professionals.

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