Question
I would like to know, based on the experience of IP professionals, what are some typical IP-related mistakes that many startups make but which could easily be avoided? What are some issues that have made startups fail?
And, I guess this would differ from industry to industry, but would a startup focusing on software development ultimately go down because maybe someone drew up the wrong license agreement from the start, or some piece of code was GPL licensed or something like that? Or can these things usually be rectified later, maybe at some unnecessary cost but not essentially threatening the business?
Thank you for your input! -- John
Answers: 6 public & 0 private
In addition to the answers I've seen here, I'd add that few start-ups consider how they might protect their intellectual assets using appropriate internal business structuring techniques. Start-ups are very vulnerable during the early stages of their trading life - IP assets can get snaffled as a result of lawsuits, insolvency and other nasties. One of the key ways of reducing this risk is to prevent the start-up company or trading entity from owning the key IP assets in the first place. The start-up can have access to these assets to conduct its business, but it won't have ownership of them, and in fact, the access can be severed if the start-up's solvency is threatened.
This outcome is achieved through owning critical IP in a non-trading entity and licensing it from that entity to the start-up so that it can trade. There is certainly some magic to the way that the enabling licence is put together, but it is worth doing.
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