1. MISTAKE ONE: Rushing ideas to market and before an audience without adequate patent protection. If a new and useful idea is publicly disclosed or offered for sale, foreign patent rights are lost. In addition, if an inventor waits more than a year from the date of sale, offer for sale, or public disclosure to file a patent application, the U.S. patent rights are lost. SOLUTION: A patent application should be filed in the United States Patent and Trademark Office prior to the initial disclosure. If this is not possible, arrangements should be made for the disclosure to be made in secrecy. There is a one year grace period, but it should be relied upon only if you know that you have no interest in protection outside the U.S.
   
2. MISTAKE TWO: Not updating patent protection to allow for the natural evolution of original concepts and products. A fledgling company could be basing their future on products that are no longer fully protected. If investors are aware of this disparity, they are less likely to invest in a company. This will hurt the start-up’s efforts to raise capital. SOLUTION: Investors should conduct a survey of similar products offered by competitors and compare them with the patent protection owned by the start-up company. Entrepreneurs and corporate officers should periodically consult with their patent attorney to update their patent portfolio to reflect product changes. Timely review can prevent loss of rights due to public disclosure.

TRADEMARKS

1. MISTAKE THREE: Selecting product names to highlight qualities that will make an instant splash in the marketplace. If the chosen name is generic or too descriptive, the Trademark Office may not recognize the trademark itself, rendering it worthless and the envisioned protection illusory. SOLUTION: A protectable name should be chosen, which brings value to the product and company.
   
2. MISTAKE FOUR: Naming a product that causes confusion with an existing product’s name. Use of such a name by the start-up company is an invitation to a lawsuit that could result in an injunction against the use of the name and a monetary award. SOLUTION: A trademark search should be conducted prior to adoption to determine whether any registered marks exist that will prohibit the use of the mark or registration of the mark. This search will also uncover unregistered marks that still may prevent a trademark owner from utilizing the mark in specific geographic areas and even throughout the United States. An additional search should be made of the state trademark registers and common law sources, for marks, which could cause a likelihood of confusion.
   

COPYRIGHTS

1. MISTAKE FIVE: Affixing a copyright may not be sufficient to protect the work and does not necessarily provide the owner with all the rights to enforce the copyright. SOLUTION: A copyright in a work can be perfected by obtaining a copyright registration with the United States Copyright Office.
   
2. MISTAKE SIX: Trusting that the ownership of all copyrighted material such as brochures, software and even advertising materials is automatically secured because they were produced for the company. SOLUTION: Generally, ownership of a copyrighted work can only be transferred in writing. Companies will be hard pressed to prove that the original work is theirs unless they institute a company-wide program for the written assignment of ownership of all copyrighted materials.
   

TRADE SECRETS

1. MISTAKE SEVEN: Using unprotected trade secrets without adequate protection as a competitive advantage to attract business and entice capital investment. SOLUTION: A company-wide strategy should be implemented to prevent loss of trade secret rights through public exposure, which does not handcuff the company’s promotional efforts. Furthermore, a decision must be made early on whether to obtain trade secret protection or patent protection, because protection of a competitive advantage as a trade secret may void the ability to later obtain patent protection.
   
2. MISTAKE EIGHT: Trusting that the start-up companies’ investors, officers and employees will not take the know-how of the company with them when they leave. SOLUTION: Institute a company-wide program of employment contracts, non disclosure agreements, and agreements not to compete to prevent former employees from utilizing the trade secrets, know-how and competitive advantage of the company.

DUE DILIGENCE