It’s well known that startups need to protect their trademarks at all costs. Still, few entrepreneurs understand exactly how, when, and why they should do so. Below, we’ll explore the not-so-obvious pitfalls and best practices for protecting some of your company’s most vital assets.
“Assets” is an apt term here, since it is possible to assign a monetary value to a trademark. Though it may be the last thing on your radar if you’re a new business owner, the value of your trademarks can have implications at every stage in your company’s development. Even your business plan should explicitly deal with your trademark portfolio.
First off, what sort of intellectual property are we talking about here? A trademark is a feature that can distinguish your startup (or what your startup does) from other companies. A company slogan is a classic example, but a trademark could also be a sound or a color, for example.
It’s important to note that you should start considering all of these branding possibilities at the very beginning, before you’ve even chosen a name for your company. For instance, your company will, in all likelihood, need a logo. But there’s no point in creating and protecting a logo if your company name is already being used. You may wish to work with a trademark attorney to do the research at this point. They can help you confirm whether your desired name is available, change the name if necessary, or even devise a plan to buy a name that is already in use. Once you’ve got the name nailed down, you and your attorney will need to list all classes of goods and services that will be covered by your trademark, and register your mark in each of those classes with the United States Patent and Trademark Office.
Once your trademarks are protected, you’ll want to get them valued. Even if you don’t currently have any intention of ever letting anyone get their hands on any part of your startup, it’s still wise to go through this process early on. If your company ever becomes insolvent, gets sold, or undergoes a merger, the value of your intangible assets will be hugely important, and that much harder to determine at that later stage.
The accuracy of those valuations will prove vitally important as well. Buyers or creditors, when presented with the value of an intangible asset, aren’t just going to take your word for it. For this reason, one of the smartest moves you can make early in your company’s lifespan is to have all of your trademarked assets audited by an IP specialist, who will assign each of them a value.
Some startup owners aren’t overly concerned about the possibility of an acquisition or bankruptcy. Many people, when starting a business, believe that such outcomes are unlikely to occur anytime soon, if they ever come up at all. Even so, there are more immediate day-to-day reasons why you should run a tight ship when it comes to your trademarks. Two of the biggest ones are trolls and infringers.
Trolls are people who, often operating entirely within the bounds of the law, acquire rights to intellectual property related to your business with the intent of making a profit — by selling it back to you, or even by suing you for using it. The hard reality is that dealing with trolls can be the price of doing business these days. Still, if you have a good legal team on your side, you can minimize your exposure. Trademark specialists can keep an eye on domain names, trademark expiration dates, and the like, so you’ll be one step ahead of the trolls.
It’s not advisable to go rogue here. If you start trying to send out your own letters in legalese, you could end up doing more harm than good. There are things you can do to help, however. To guard against those who try to infringe on your intellectual property, it never hurts to set up a Google Alert for each of your trademarks. That way, if you spot anything fishy, you may be able to warn your lawyer about the problem before it gets too big. It’s a simple step, and it certainly is no replacement for an attorney, but this system can help you to keep tabs on your assets.