Lack of IP Protection Could Impact Future Financing

by | May 20, 2015 | Intellectual Property

How do intellectual property and finance protection go hand-in-hand? I cannot emphasize enough the importance of protecting your emerging business’ intellectual property. We have talked about it in past posts, and I will reiterate that message again and again. Lack of IP protection can have a devastating impact on your business just as you are hitting your stride.

If you plan to attract investors or secure financing to move your business to the next level, an IP dispute could derail your efforts.

According to Westlaw, a legal research division of Thompson-Reuters:

A dispute with a third party over a key piece of intellectual property when the company is on the verge of securing financing might be lethal for the new financing, in addition to being a major embarrassment for the company.”

On the flip side, if you can prove that you own your intellectual property – with a patent, copyright, or trademark – it can strengthen your case with lenders and investors. The World Intellectual Property Organization writes that small- to medium-sized enterprises (SMEs) can use their IP to help secure financing:

“The investor/lender, be it a bank, a financial institution, a venture capitalist, or a business angel, in undertaking an appraisal of the request for equity assistance or loan, will assess whether the new or innovative product or service offered by the SME is protected by a patent, a utility model, a trademark, an industrial design, or copyright or related rights. Such protection is often a good indicator of the potential of your SME for doing well in the marketplace.”

It is no secret that being a small business owner involves a lot of planning. Do your due diligence now to protect your new business and its future potential. Don’t let an intellectual property dispute ruin your hard work. Consider intellectual property and finance protection similar goals.

To protect your intellectual property and help ensure the growth of your emerging business, contact EmergeCounsel today.


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