IP rights protect intangible assets such as ideas, inventions, brands, and information. IP rights may also be used as a useful tool for attracting investors and encouraging them to provide financial support for your business. This usage of IP is often underappreciated, especially by early-stage companies looking to attract funding to continue their growth. We’ve put together a handy list of our top tips on how to best use your IP rights to attract investment:

Protect your intellectual creations

To have the best chance of using your IP to attract investment, your business’s core areas must be protected. You should review your IP rights and the protection they provide to identify any gaps in your protection that could be exploited by your competitors, which could potentially reduce your business’s value in the eyes of investors. For example, inventions that are key to your business should be protected with patent rights, core branding should be protected with trademarks and/or design rights, and all contracts and agreements should include IP provisions. Additionally, if your business is international, you should ensure your business has IP protection in all key markets around the world, not just the UK.

We recommend carrying out an IP audit with your IP attorney in order to identify any gaps in your protection. Doing so will Illustrate that you have reviewed your IP portfolio to ensure it is comprehensive and will encourage investors to put their money on the line.

Intellectual Property

Develop an IP strategy

Another important consideration that will show investors you are serious about your business’ IP is developing an IP strategy to cover any future IP generated by your business. It is important to note that there is no “one size fits all” for IP, and you should tailor your IP strategy to your business’ specific needs.

Planning the trademarks you wish to use for any future products and services is crucial. You must take early action by registering the trade marks in countries where you want protection. Trade mark searches should also be carried out to check that your mark won’t infringe any previously registered trademarks.

It is also vital to educate your employees about the importance of confidentiality. This education is particularly important with respect to patents as disclosures made outside of the terms of confidentiality may make it difficult to protect your inventions. An “invention harvesting” procedure may also be advantageous, to identify any technical innovations that may be protected with patent rights. It is also essential to think about registered and unregistered design rights that protect a product’s shape and appearance rather than its function. Keeping records of all new designs and their creation date is important.

A sensible IP strategy helps build valuable IP within your business as it develops, ensuring that all bases are covered when the time for investment is right.

Intellectual Property

Appropriately mark your products

Marking your products to indicate any registered or unregistered rights shows investors that you believe in your product and do not want any competitors riding on its success.
For trade marks, you should mark your products that are associated with your registered trademarks using the ® symbol. Use of the ® symbol is reserved for registered trademarks. You should also highlight your products which are branded with unregistered trademarks with the TM symbol.

For patent rights, you may mark your products associated with a pending patent application as “patent pending” or “patented” for products protected by a granted patent. Marking your products can boost the reputation of your company as an innovative business.
Highlighting your IP rights can deter any potential infringers, having a dissuasive effect on anyone considering copying your products. Particular care should be taken when marking a product as “patented” or “patent pending” as marking a product falsely is a criminal offence in the UK and you may be fined for any misstatement. Product marking is a key method of highlighting and increasing the value of your IP in the minds of investors.

Be aware of who owns the IP rights

Ownership is a core aspect of IP rights as the owner (or assignee) of the IP right has control over its use. IP rights may only be assigned or licenced by the owner. Therefore, knowing who the owner of the IP rights is very important.

Confusion often arises when, for example, an employee of your company invents a product or process. Importantly, a patent for the invention will belong to the employer where the invention was made in the course of the employees’ normally or specifically assigned duties and the invention was made in circumstances under which an invention might reasonably have been expected to have arisen from carrying out those duties. Further criteria apply where the inventor is considered to have a ‘special obligation’ to their employer, for example, directors and company owners. Where the ownership of an invention is unclear, it may be useful to have your patent attorney review the inventors’ contribution and contract.

Other common sources of confusion may arise when embarking on R&D collaboration ventures or with contractors. In these situations, it is important to be of which party owns the IP generated. Again, it may be useful to have your IP attorney review any joint venture agreements you have in place. Investors will want to know whether you have full ownership of your IP or whether some of it is co-owned. Of course, ensuring the ownership of your IP is resolved is important to investors, and is a focus of any due diligence before a deal completes.

Joseph Spencer
Trainee Patent Attorney at Murgitroyd

LinkedIn / joseph.spencer@murgitroyd.com