Your Startup's Most Valuable Asset Is Its Intellectual Property

Your Startup's Most Valuable Asset Is Its Intellectual Property

by Joe Runge, Esq., May 2017

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The best technology is invisible. Whether it's your favorite social network, online streaming, or ride hailing—they just work. People choose these services, not based on the specific technological solutions that underlie them, but on the overall experience they provide.

That user experience doesn't just happen. It includes the code the programmer writes, the system the architect builds, and the interface the designer creates. If the company is missing any one of these parts, then it cannot deliver a great experience.

It's absolutely essential that the company have clear ownership for all the technology that goes into creating the experience—because it is the experience that makes the brand. As your customers begin to identify with that branded experience, you also need clear ownership of the brand to protect your place in the market.

Taking the Right First Step

When the programmer, the designer, and the architect come together to build the service that will support the customer experience, their first step is not to select a programming language or to buy hardware. The first step is to form a company and decide who owns it.

In order for the company to own all the technology that drives the experience, the company must own all the intellectual property for all the technology. The founders must agree to the terms under which they are trading intellectual property for a stake in the new company. The longer the founders wait to do this, the bigger the risk that some part of the technology will be unavailable to the company.

As the company grows and expands, its most valuable intellectual property may not reside in any of the specific technical features but rather in the brand that users associate with the service: the company's trademarks.

The Tech Behind the Experience

Services like Netflix and Facebook have staggeringly complex technology that does seemingly simple things, like curating a user's news feed or formatting a movie to fit any screen. It is a credit to the underlying technology that so many of these solutions are nearly invisible.

As the company succeeds, the individual technical components become less and less important. Instead, they contribute to the positive feelings that users have toward the brand. This appreciation of the brand gives Facebook and Netflix an incentive to continuously improve their services. And that's what trademark protection is all about.

So long as the service continues to work—and as their user experience improves—customers may not appreciate the efficient network architecture or the zero-second-latency protocol. Nor should they need to. People just love the brand that provides the service.

Smart companies will protect that brand, along with the individual technical components.

What Trademarks Do

How do you protect a brand? Through trademarks. Trademarks are different from other forms of intellectual property in that they protect the goodwill that companies foster with their customers.

Also, unlike most forms of intellectual property, so long as the trademark owner renews the trademark, the protection continues. With a simple filing every ten years, the trademark can potentially exist forever. No one else can use the same brand for the same kind of service.

Companies that take trademark protection seriously are investing in a lot more than just protecting their logo. They're investing in everything from the internal, technological components to the outward-facing public persona and brand. Because the whole is greater than the sum of its parts, you want to be sure to protect it.