Intellectual Property for Startups
By Lexus Tatge & Samantha Sakells, with Maggie Wang
So, you have an idea—exciting! But what comes next? A crucial question follows: To protect or not to protect your idea?
In reality, if your idea is novel, nonobvious, and has utility, the answer should almost always be "To protect". But protection doesn't always mean you need a patent. If you're starting a company, you have multiple intellectual property (IP) options to consider, each serving different strategic purposes.
Four Main Types of IP for Start-ups
1. Patents: The Heavyweight Champion
If you're launching a biotech or pharmaceutical company, patents are likely your most marketable asset. A patent grants you exclusive rights for 20 years, preventing others from making, using, or selling your invention without permission. This is particularly crucial if your drug, device, or technology could be reverse-engineered or if you're entering a highly competitive field. However, keep in mind that patents require public disclosure, are expensive to obtain, and have a fixed lifespan.
2. Trade Secrets: Keeping It Confidential
Trade secrets protect proprietary knowledge without requiring public disclosure—if you keep it a secret. This is ideal if your innovation isn't easily reverse-engineered but holds significant economic value. Think formulas, manufacturing processes, or algorithms (e.g., Coca-Cola's recipe or Google's search algorithm). Unlike patents, trade secrets don't expire—but once leaked, they're gone. Non-disclosure agreements (NDAs) are crucial to maintaining trade secret protection.
3. Trademarks: Building a Brand
Your company's name, logo, slogan, or product name can be trademarked to establish market identity. Unlike patents, trademarks can last indefinitely if renewed, making them a long-term investment. A strong trademark builds consumer trust—think Nike's "Just Do It" or the USPTO's own trademarked logo (fun fact: it's the only U.S. government agency with one!). If you plan on building brand recognition, trademarks should be on your radar.
4. Copyrights: Protecting Creative Works
Copyright might seem less relevant for biotech, but it still plays a role. Copyrights protect original works of authorship, including:
- Software code (e.g., drug-discovery algorithms, bioinformatics tools)
- Marketing materials (branding content, website text, promotional videos)
- Scientific publications (R&D reports, white papers)
Copyrights last much longer than patents—lifetime of the author + 70 years, or 95 years for corporate works. While not always essential for startups, they can be valuable for protecting proprietary content.
Okay… so you figured out how you wanted to protect your idea. You want to patent your novel molecule, trademark its name, keep the formulation a trade secret, and copyright the branding content—I call that an IP-quad-fecta. But what comes next?
Whether you're one person, a group, or a startup, you should absolutely seek legal advice to optimize your protection strategy and close any gaps where others might exploit your idea. Develop an IP strategy outlining:
- Timelines for protection
- Confidentiality considerations
- Risk of reverse-engineering
- Competitor landscape
- Investor expectations (e.g., strong patent portfolios attract funding)
Keep detailed, secure records of the invention process to provide proof of creation. And most importantly, don't disclose your invention until you have the proper IP protections in place.
Common Pitfalls to Avoid
Many inventors stumble by:
- Underestimating time and costs required for obtaining a patent
- Failing to conduct thorough prior art research
- Publicly disclosing their invention too soon
In the U.S., once your invention is publicly disclosed, you have one year to file a patent—after that, you lose protection. And remember, the U.S. operates on a first-to-file system, not first-to-invent. If you present your molecule at a conference but delay submitting your patent, and someone files before you—even minutes earlier—they get priority.
Finding the Right Legal Support
If you need expert guidance, numerous top-tier firms specialize in life sciences IP. While this blog isn't sponsored, you can check out ranked firms at Chambers & Partners. Some notable firms include:
- Cooley LLP
- Covington & Burling LLP
- Goodwin
- Latham & Watkins LLP
- WilmerHale
- Ropes & Gray LLP
- Sidley Austin LLP
- Wilson Sonsini Goodrich & Rosati
So are you done now? Can you sit back and make all of this money since you decided to protect your invention? No. Not even close. This is only the beginning. If you're at a university, this is where the last blog post comes in handy. Check out your tech transfer office way before you get started—this will actually help you through ALL of the things I mentioned above. However, that is if they see a monetary value behind your idea. Tech transfer offices run off of licensing agreements, where they will license the IP out to companies, and if your invention lacks licensability, then you may be out of luck.
Relationship between VC and IP in biotech startups
If that is not the case, and you are interested in starting your own company with no relation to a university, then you might want to start thinking about your pitch to venture capitalists (VCs) to get your start-up up and going. How do VCs typically evaluate IP when funding biotech start-ups? Now that is the million-dollar question—literally.
VCs typically prefer patents with broad claims for the life sciences because this provides well-documented protection for the invention, giving less risk of losing an invention to a competitor, and it can provide more protection against competitors designing a similar invention. VCs also typically look for a startup that owns their own IP to avoid potential lawsuits. Beyond just securing patents, VCs want to see a well-rounded IP strategy. This includes ensuring freedom to operate—meaning the startup won't inadvertently infringe on existing patents—as well as clear ownership of the technology. Remember that a patent grants the right to exclude others from using, making, or selling your invention, but it doesn't give you the right to use, make, or sell it yourself. If your invention requires resources protected by other patents and you lack the proper licenses, you cannot legally produce or sell your invention, even with your own patent. If the IP was developed in a university or previous company setting, VCs want to be certain there are no unresolved rights or licensing obligations that could complicate future commercialization.
Another factor VCs consider is the scalability of the technology. Does the IP provide a foundation for multiple products or future applications, or is it a one-time innovation with limited market potential? A strong patent portfolio can position a startup for strategic partnerships, acquisitions, or future funding rounds, making it a critical component of early-stage biotech business plans. Ultimately, securing VC funding is not just about having IP—it's about having an IP strategy that aligns with the company's business goals, competitive landscape, and long-term growth potential.
In conclusion…
So, NOW are you done? Can you sit back and relax with all this VC money and IP protection? Doubtful. The harsh reality is that about 90% of biotech startups fail. Coming up with the idea or invention is just the beginning. If you're a scientist looking to start a company but lack financial expertise, managerial experience, or the bandwidth to handle it all—that's okay. There are professionals who specialize in those areas, and bringing them in is essential. As long as your science is sound, reproducible, and scalable, focus on what you do best and build a strong, well-rounded team to bring your vision to life.
And remember, intellectual property protection is not just a legal formality—it's a critical component of a successful biotech startup. Whether through patents, trade secrets, trademarks, or copyrights, a well-planned IP strategy can provide a competitive advantage, attract investors, and drive long-term growth. But securing IP protection is just the first step. Entrepreneurs must also navigate university tech transfer policies, venture capital expectations, and broader market strategies to turn their innovations into viable businesses. By understanding how VCs assess IP, ensuring clear ownership, and securing freedom to operate, startups can position themselves for funding, partnerships, and long-term success.
Sources:
More info on patents and their value to private institutions and the public:
https://www.sciencedirect.com/science/article/pii/S0048733319301945
IP Strategies for Biotech Companies:
https://www.excedr.com/resources/intellectual-property-strategy-for-biotechs
IP and VC for Startups:
https://www.mbhb.com/intelligence/snippets/intellectual-property-and-the-venture-funded-startup/
Patent Strategies for Biotech Startups:
https://outlierpatentattorneys.com/patent-strategy-for-biotech-startups
Life Science Law Firm Rankings:
https://chambers.com/legal-rankings/life-sciences-usa-nationwide-5:376:12788:1?l=en-GB
Grammar edits with help of ChatGPT.