Importance of IP For Start-ups and Entrepreneurs (Part I): Patents

Intellectual Property protection can provide business and competitive advantage to a company. While IP is assuming high importance for all companies, its value for a start-up  can be extremely high, depending on the nature of the start-up. While IP, many a time, forms the core of technology/knowledge driven start-ups based on novel ideas, the spectrum of its value varies for others. Irrespective of the nature of a start-up, IP can help in gaining business/competitive value by:

  • Providing the much needed market exclusivity;
  • Providing the tools to sustain and grow the business;
  • Laying a foundation of assets to raise investment and funds;
  • Enhancing financial valuation and minimizing dilution from investments;
  • Preventing misuse and misappropriation of assets; and
  • Offering the business tools to face competition from large entities.

IP has the potential to generate value in many ways, but it can do so only if a start-up uses IP in an appropriate manner. It must also be borne in mind that IP provides only one layer of business value among many others that  can make or break a business. Despite the value IP can provide to start-up companies, limitations with respect to financial and other resources in such companies poses challenges for protecting and managing the start-up’s IP assets.

The next posts provide an overview of some basic steps that must be taken by start-ups and entrepreneurs to safeguard their intellectual assets. More often than not, the advantage an intellectual asset can provide may be lost due to acts or omissions of start-ups and entrepreneurs, and the posts provide inputs to avoid the said situation.