The decision of “when to file a trademark” for a startup company is an important one. Many intellectual property attorneys will tell you “the sooner, the better,” but there are times when that may not be the best approach depending on the unique circumstances of each individual startup. The following are some of the issues we often help startups work through while developing a solid strategy for securing their intellectual property.
How Tight is the Budget?
Cash is often tight for startups. Difficult decisions are made daily to ensure that every dollar is spent wisely and with maximum ROI in mind. It’s no surprise then that filing for trademarks is one of those expenses that often wind up on the financial chopping block. How your attorney advises you to proceed if finances are a concern should depend on your unique situation, the nature of the startup, and your business plans.
If you are close to launch, you already have funding, or you are completely secure with your branding strategy, your attorney will likely say that filing for your trademarks at this point is a wise expense. Conversely, if there are still some gray areas – maybe there are doubts that the project will make it through to completion, or if the founders still aren’t yet sold on the venture’s name or branding strategy – it might make more sense to utilize alternative options that provide some level of protection until outstanding issues are resolved.
Do You Anticipate any Changes in the Product or Brand?
The initial product or service envisioned often changes and/or is modified fairly frequently as you research, develop, and create your minimum viable product. With these changes, the brand mayalso evolve. Once you file an application for a trademark or patent you are very limited in what changes you can make, so being strategic about when to file, for what to file, and how to file is imperative.
Another important issue to consider with regard to brand changes is how to avoid unplanned and/or unwanted changes such as being forced to rebrand because of a cease & desist received as a result of not doing a search prior to choosing a name. See my post about the importance of conducting a trademark search (https://jhrlegal.com/conducting-searches-on-a-trademark-before-filing/) prior to finalizing your brand to avoid infringement accusations.
What About Investors?
The role investors play in a startup can also cause some “chicken or egg” hiccups on the IP side. That is, investors are attracted to startups that have their IP portfolio organized and protected, but the limited funds available to some startups mean they are waiting for an investor to help fund certain aspects of business development such as IP. After all, trademarks, copyrights, and patents are all assets that bring value to your startup. So, if your main goal is to attract an investor, filing for your IP as soon as possible is a wise strategy. However, we have seen cases where investors have requested that the startup change the name of a product, service, or even the company to be more attractive to customers. Again, if this appears like it could be a possibility, we may advise the client to pursue alternative options to a formal trademark registration until everyone is on the same page.
What Country are You Filing In?
Your startup’s IP strategy may also depend on in what countries you are planning to work or market since this will dictate which countries you should protect your IP. You should also consider countries that you will manufacture your products in and countries that your competitors may manufacture or market their products. Different countries have different laws and practices as it relates to use and registration of trademarks, patents, and copyrights. Some are “first to file” countries and some are “first to use.”
If you’re seeking to secure rights in a first to file country, you’ll obviously have to prioritize the registration of your marks and move faster than you would in a country where you stake claim to your trademark by just using it in the natural course of business.
Are You Anticipating Any Shakeups?
It’s not unusual for startups to experience shakeups and turnover in personnel. Sometimes, the company’s name changes, the branding strategy may change, the entire business concept may need to change at the request of an investor, etc.
If there’s a sense that the startup may be experiencing changes or shakeups, it might be worthwhile to push “pause” on your IP strategy until you are ready to make more permanent decisions.
Bottom Line: There’s No “One Size Fits All” Trademark Approach for Startups
It is vital to protect your startup and a solid intellectual property strategy is a key piece of the puzzle, but it can be a waste of everyone’s time and money if there are elements of the brand or company that are still subject to change. If you’re unsure, the best course of action is to develop a relationship with an attorney whom you trust to guide you through each phase of your startup journey. If you don’t have an attorney, we’d be happy to explore your options and prioritize the registration of your trademarks, copyrights, and patents. To schedule an appointment, simply call 888-666-0062.
DISCLAIMER: The information contained in this article is for informational purposes only and is not legal advice or a substitute for obtaining legal advice from an attorney.