On one consistent thread of most start-up businesses is the lack of money. Many companies put off speaking with an intellectual property attorney in an attempt to conserve resources. However, this approach is usually pennywise and foolish.

Any start-up company ought to perform at least five basic steps up front. These need not cost much money and can help the business avoid substantial harm down the road.

1. Do a trademark search.
Your company name or the name of your leading product may sound pretty cool. Unfortunately, it probably sounded pretty cool to the other company that adopted it before you did. Thus it is a good idea to conduct a trademark search before you launch your product or begin building brand loyalty. You can spend about $500.00 for a trademark search through an attorney, the attorney will typically look not only at your exact name but variations used by potential competitors that may raise trademark issues. While no trademark search is a guarantee that there will not be conflicts in the future, it significantly reduces the risk. At a bare minimum, do your own trademark search at www.uspto.gov. A little bit of your time now will save many headaches later.

2. Consider patent issues.
Many tech oriented companies are familiar with the need to obtain patent protection. However, if there is something truly unique about your product that you believe provides a competitive edge, it is wise to have at least an initial consultation with a patent attorney. This will probably run you $200.00 to $300.00 for an hour of the attorney’s time. It may save you hundreds of times that in the long run and improve the chance you will properly protect your inventions.

At a bare minimum, every business person should know that you have one year from the date that a product is first sold, offered for sale, or in public use in which to file a patent application. Wait one day longer and you have dedicated any invention you may have made to the public. Additionally, if foreign markets are of concern, please note that a U.S. patent application must be filed prior to any public disclosure of the invention. You will then have one year in which to take steps to preserve any patent rights in foreign countries.

3. Get your employment agreements in order.
A start-up company may face a significant competitive threat from its own employees. If the employees decide that they can do better by going into competition, you may have little recourse if non-compete and other employment related documents are not in place from the beginning. Therefore it is strongly advisable to have any employees sign employment agreements which restrict any use of confidential company information and, for those employees who may pose a competitive threat, which prevent them from competing directly with the company for a reasonable period of time.

4. Ensure ownership of your intellectual property.
Many small companies use independent contractors to save on costs, and to provide greater flexibility. An independent contractor, however, will generally have greater rights to ownership of any work which he or she creates. If you hire an independent contractor to write code, come up with company design, or otherwise do anything which may involve company inventions, trademarks, or copyrightable materials, it is critical to have contracts which will vest all ownership of the intellectual property in the company. No matter how friendly the independent contractor seems today, he or she may subsequently claim that they own part or all of your important company intellectual property. An ounce of prevention in this regard is worth many pounds of cure.

5. Protect confidential information/trade secrets.
Virtually any company generates confidential information. While it may not be as important as the actual formula of Coca-Cola, it is probably important to the competitiveness of your company. It is not uncommon for renegade employees or others with access to confidential information to use that information to the competitive disadvantage of the company. By the time that happens, however, the horse is usually already out of the barn.

Reasonable steps should be taken from the outset to protect the company confidential information. Client lists and term sheets which are not publicly available and cannot be easily deduced should be provided only to those who need to know within the company. Documents containing confidential information, to the extent practicable, should be stamped confidential and should not be left in open view.

Likewise, any scientific or technical information which provides a competitive advantage should be protected.

The Utah courts have traditionally been very favorable toward the protection of confidential information and enjoining parties who attempt to misuse it. However, one of the first questions will always be did the company take reasonable steps to protect the confidentiality of the information. f not, there will be little recourse.

The preceding steps need not cost a lot of money. In fact, with the possible exception of a technology based company, it should amount to a fairly small percentage of early expenditures. Neglecting them will cost many times the perceived savings down the road.

This blog post is intended for informational purposes only, and should not be construed as legal advice or as pertaining to specific factual situations. Consult with an attorney concerning your own needs and circumstances and to obtain any legal advice with respect to the topics discussed in this post.