Intellectual Property (IP) is at the centre of technology businesses and investors are increasingly mindful of IP implications when considering whether or not to part with their cash. It is therefore vital that any technology company employs robust IP strategy from the outset, so as to not only maximise the business potential, but also be fully prepared for investment when seeking to apply.
From an IP perspective, investors will want to know 1) that they are investing in a well-protected business which is ready for expansion, and 2) that there is as low a risk as possible of the business ceasing to operate due to infringement of third party IP rights.
Identification of a business’ IP portfolio is a sensible first step, so create and maintain a thorough schedule of all IP rights owned and used by the business. Ensure that the business retains ownership of all IP rights that it creates – IP rights created by employees will usually be owned by the employer, but this is not the case for contractors or general service providers so having appropriate, well-documented contractual obligations in place is essential. If it is not possible to have rights assigned to the company, at least ensure that there are relevant permissions to use any necessary IP rights of others.
Ensure that you develop a sensible IP policy and management strategy, which should be reviewed and updated regularly. Such a policy may include clearance strategies, how and when to seek registration of IP rights, ownership policies, third party IP, maintenance of rights, and enforcement policies, such as detailing under what circumstances the business will seriously consider filing a claim at court. Investors will often ask about these policies and may even request a copy of the policy document itself.
It’s generally preferable to seek registered protection wherever possible, and you should have good reasons for failing to do so. For example, the desire to keep an invention secret may outweigh the benefits provided by monopoly patent protection but investors will want to see clear reasoned policies backing up such decisions. Note that some rights are invalidated by disclosure, so failure to consider registration early may result in the loss of rights. If this happens, be prepared to explain these shortcomings to would-be investors.
Retaining copies of all relevant documents, including certificates and contracts, will not only prove that your business is well-organised, but will also streamline any business activity. This applies to commercial contracts, too. Keep a diary of any deadlines, such as renewal deadlines, to ensure there are no loss of registered or contractual rights.
Considering IP implications early will not only allow your business to expand but will ensure that it is investor-ready when you decide to raise funds.
For more information, please contact me or a member of our Intellectual Property team who can provide advice and support to any organisation.
If you haven’t seen our North West Tech Funding report, this is available for download on our dedicated page on the Brabners website. We have also prepared a video around the report’s findings which is available on our video hub.
