Each year, hundreds of thousands of startup companies are created in the U.S. For the companies' founders this is an exciting and stressful time. Among the matters to juggle are funding, hiring, product refinement, marketing and product placement. A misstep in any direction can lead to failure. Amidst these considerations, protecting the company's intellectual property is sometimes overlooked or delayed because of budget constraints. However, this too could prove to be a fatal mistake for a startup.

Protecting the IP assets of a company brings significant value. Investors understand the value of IP assets. Competitors understand the power of IP assets in the marketplace. Successful research and development creates corporate wealth in the form of innovation. But, innovation alone is not likely to propel a company into a favorable market position absent an intellectual property strategy to protect those assets. Without proper protection, competitors can do the same thing—maybe even better and cheaper having saved the R&D cost—and thereby dominate the innovative company in the marketplace. In contrast, when innovation is protected by legally cognizable assets, a startup has a stronger lever against competitors, even those that are well‑established.

This is why a startup should think about IP asset protection during the company's infancy. Devising a startup IP strategy requires a keen sensitivity to costs and a sharp focus on how IP assets can support marketplace revenue generation. Often this is achieved with an IP strategy broken down into short-term and long-term plans. To figure out how to prioritize, it is helpful to understand the variety of IP protection options available.

When many business owners think of intellectual property, they typically think about patents. "Can I get a patent on this?" is a question heard often. It's a great question, and an important one to ask early on in the process. But, while patents are certainly an important part of a company's IP portfolio, there are many other ways to protect a company's IP assets.

Brand protection in the form of trademark registration with the U.S. Patent and Trademark Office (USPTO) is critical. Trademarks protect the name that people will use to refer to the company or its product. Purchasers need to remember the name of a startup to find it, contact it, or order products. Startups should select a brand name that is unique and memorable, but not too difficult to pronounce. Additionally, care should be taken to investigate whether the selected brand name is likely to be confused with an extant brand. Commissioning a search for brand conflict in early phases of product development will save costs in the long run, by avoiding costs associated with rebranding a new name if a conflict arises, and costs associated with litigating the right to use the name.

If the target market for the startup is not limited to the U.S., international legal strategy should also be considered. There are a plethora of options for seeking international trademark protection. In view of the number and complexity of these options, consultation with an experienced IP lawyer is essential.

Once a brand is selected, a domain name should be secured so that the company can build an online presence associated with the brand. For companies whose product is a software application or web tool, those companies should also consider a Terms of Service and Privacy Policy that governs how the application should be used and protects the company in the event of misuse by consumers.

Copyrights protect creative works that are fixed in some tangible form. Examples include software, website content, photos, music, artwork, etc. While it is not always necessary to register copyrights with the U.S. Copyright Office, it is necessary to do so before asserting infringement of the copyright. Copyrights also present a trap for the unschooled. U.S. law heavily favors the creator of a work with respect to ownership of the copyright. Extreme care must be exercised to ensure that the startup owns all copyrights underlying created works.

Patents protect innovations, which can come in various forms. Patents can protect software applications, computing devices, chemical compositions, mechanical devices, and numerous other types of inventions. Utility patents can exclude competitors from making, using, selling or importing goods covered by the patent for a period of 20 years from the date the patent application is filed. While securing utility patent protection tends to come at a higher price than other types of IP, it is often worthwhile to invest in one or two foundational patents early on in a startup's life. The USPTO operates under a "first to file" system, where, if multiple inventors are independently working on a solution, the first inventor to file a patent application is awarded priority.

Provisional patent applications are useful tools to secure priority rights under tight budget constraints. Commonly, provisional patent applications are not as formal and polished as traditional utility applications, and they can be prepared at lower cost. A provisional patent application can be filed to obtain an early "first to file" date, and thereafter serve as a placeholder for up to one year. However, that "first to file" date is lost unless a traditional utility patent application is filed within the one year. Provisional applications provide a startup with time to refine a product, determine whether the product will be successful, obtain additional funding, or consider other IP asset protection strategies.

Design patents are another lower cost tool to protect IP assets. They protect ornamental designs of functional items. For example, design patents can be used to protect designs of virtually any type of product, including shoes, cars, purses, furniture, tools, toys, phones and other electronic devices, etc. Additionally, and often overlooked, design patents can be used to protect graphical user interfaces (GUIs) and GUI animations. This can be particularly useful in protecting software applications with user interfaces.

International patent protection should also be a consideration for companies with a global market. However, it can quickly become very expensive, and therefore international patent strategies should be carefully tailored to the startup's business goals. International patent laws can also be nuanced, with different requirements in different countries. To avoid unintentionally foreclosing international patent protection opportunities, innovations should be kept confidential until a patent application is filed or an alternative strategy is decided.

Trade secrets can be critical assets to a startup company, often at very little cost. Maintaining information as a trade secret is useful if competitors won't be able to reverse-engineer or otherwise figure out how a product works. To maintain something as a trade secret, however, a company must be careful in how information is maintained. Dissemination of the information must be limited, and those with access to the information should sign a confidentiality agreement stating that they will not share the information outside the limited group.

As part of protecting IP assets, it is also important to make sure the company retains ownership of its IP. Employment agreements should include provisions clarifying that innovations developed by employees on company time or using company resources are owned by the company. Startup companies will often seek assistance from vendors, such as software developers, who will provide a form agreement to the startup company to sign. Such agreements should be reviewed by an IP attorney to ensure that the startup company owns all necessary IP rights, especially in the realm of copyrights.

A startup's short term protection strategy often includes pursuit of selected prioritized IP assets. Additionally, procedures should be put in place to preserve IP rights. Such procedures can include ensuring that employees keep information confidential by not talking to friends about their potential innovations, or sharing too much information on social media. Moreover, it can be helpful for employees to have a reporting system for reporting possible new ideas or innovations to someone within the company that can decide whether and how to protect them.

For the longer term, startups should remember that any provisional patent application that is filed will be due for conversion to a utility patent application in one year. It will also be due for international filing at the same time. Accordingly, the long-term strategy should include consideration of foreign markets, and whether and how to protect the company's IP assets overseas. Longer term strategies may also include plans for monetization of IP assets, such as patent licensing.

Having considered the various IP protection options, formulating a strategy can be daunting for a startup company. Even breaking it down to short term and long term, it is difficult to balance IP strategizing among the other stresses associated with making the company succeed. Each company is different, with different products, goals and values. An experienced attorney can help to devise a tailored strategy for protecting IP assets that is synergistic with the startup's business objectives.

Natalie S. Richer is partner at Lerner David Littenberg Krumholz & Mentlik, an intellectual property boutique headquartered in Westfield, New Jersey, with additional offices in Tokyo, Japan, and Guangzhou, China.