What Most Start-ups Get Wrong About Intellectual Property (And How to Fix It)

Intellectual property is one of the most widely misunderstood areas of law. Every day, we meet brilliant start-ups with exceptional products, innovative ideas and the capital to build successful businesses, yet many still hold fundamental misconceptions about how to protect what is often their most valuable asset: their IP. Below are ten of the most common myths founders believe about intellectual property, and what they should be doing instead.

1. There’s no IP in my business

Founders often tell us, especially if their business is based on a simple concept, product or service, that there’s no IP in their business. They assume that IP = patents, or at least that patents are the only valuable form of IP, and so it’s only big tech or pharma companies that need IP strategies.

This is the first major misconception that needs to be dispelled. IP is about much more than inventions and patents, and for many startups their most valuable assets are actually: (a) their brand and their goodwill or reputation; (b) their software, marketing and training materials and other content; (c) their customer databases and other proprietary datasets; and (d) their internal know-how including business strategies, processes and methodologies.

Fix: instead of focusing only on patents, or assuming that you have no IP if you don’t have a patentable invention, develop an “IP portfolio mindset”. IP is not any one thing. It is a collection of rights and assets that protect your business and add value to it.

2. I can’t afford to protect my IP – I’ll deal with it later when the business grows

When we first meet founders at a pre-revenue or very early stage, IP is often seen as a grudge purchase. They have manufacturing and supply chain costs, staff costs, marketing, rent, insurance and so on. IP is often very far down the list of priorities.

The reality is that, compared with those costs, it is relatively inexpensive to protect your core IP rights at an early stage. Moreover, if you have issues in other areas, for example you have to move premises, change manufacturers or insurers, or replace staff members, the problem is usually fixable and unlikely to bring the business to a halt. In contrast, if you ignore your IP early on, the resulting problems are not always fixable. Ownership may become unclear, third parties may end up owning part of your IP, new inventions or product designs may be disclosed too early, or someone else may file an application for your trade mark before you do.

Fix: identify and protect your core IP rights as early as possible. Put agreements in place with every stakeholder who touches the business, including employees, freelancers, consultants and investors, to ensure that IP rights are owned by the company. Use non-disclosure agreements and appropriate confidentiality procedures with outsiders. Run clearance searches for your core brands in your key territories. You don’t need a large IP portfolio on day one, but you do need clean and clear ownership of your key IP assets.

3. I’m never going to sue someone if they infringe my IP – what’s the point of it?

This is a fair question. Most early-stage founders cannot imagine going to court over an IP dispute. The cost of bringing a claim in the Intellectual Property Enterprise Court, as well as the risk of paying the other side’s costs if you lose, means that founders often dismiss the need for IP on the basis that they will never enforce it.

However, enforcement is only part of the picture. The vast majority of NDAs are never seen by a court. Most cease and desist letters in relation to unauthorised use of trade marks, copyright or designs do not end in proceedings. In most cases, IP rights are used as leverage to achieve a commercial outcome, such as stopping infringing activity, securing payment or agreeing future conduct. Most importantly, taking active steps to protect your IP and putting third parties on notice from the outset has a deterrent effect.

Fix: as mentioned above, identify and protect your core IP rights as early as possible. Clearly “planting your flag” early often prevents problems arising in the first place.

4. I own the company name and the domain for my brand name – I don’t need a trade mark

Anyone can incorporate a company and anyone can buy a domain name. It takes minutes to do it online and it is usually inexpensive. Provided someone else is not already using an identical name, you will generally have no difficulty obtaining the name you want.

However, a company name or a domain name gives you no right to trade under that name. If someone else owns a trade mark registration for the same or a confusingly similar name, they may be able to prevent you from using it, even if they obtained their registration after you incorporated your company or bought your domain.

Fix: do not assume that incorporating a company or buying a domain name gives you brand rights. It doesn’t. Before settling on a brand name, and ideally before incorporating a company or purchasing a domain, run trade mark searches to identify any conflicting rights. If the position is clear, file a trade mark application.

5. I’ve checked my brand name on Google and the results were clear – I don’t need to do trade mark searches

It is always sensible to run Google searches before committing to a new brand name. If someone else is using a similar name, they may well have left a digital footprint.

However, Google searches rarely give a complete picture. Trade mark searches are needed if you want a reliable view of existing rights. It is not uncommon for businesses with enforceable rights to have a limited online presence (e.g. where a small/local business operates primarily offline, but nevertheless has a registered trade mark), or for registered marks to show little or no current use online (e.g. where a business has discontinued a brand, but nevertheless retains the relevant registered trade mark rights).

Fix: do not assume that clear Google results mean there are no risks. Before committing to a name, carry out proper trade mark searches and file an application where appropriate.

6. I’ve been using the brand for ages without any problems – I don’t need a trade mark

It is true that long-standing use without complaint usually reduces the likelihood of a challenge. A business may have built up goodwill and may be able to rely on passing off, and in some cases acquiescence to long use may be available as a defence to trade mark infringement.

However, relying on these routes is risky and expensive. Passing off is highly fact-specific and evidence-heavy. And the resulting scope of protection may also be limited. Acquiescence requires proof of knowledge and timing, which can be difficult to establish.

Fix: do not assume longevity makes you immune to challenge. Conduct trade mark searches and file an application as early as possible. The cost is likely to be dwarfed by the cost of dealing with an unexpected dispute later.

7. I’ve found open source code and other content online – that’s ok to use, right?

This arises frequently. Developers use open source code without fully understanding the relevant licences. These licences can impose disclosure obligations and other requirements (e.g. copyleft), and they often become a red flag in due diligence.

Similarly, startups often use images, marketing materials, datasets, scraped content or AI-generated outputs without checking the underlying rights. As a starting point, most of this material is protected by copyright and is owned by someone. Unauthorised use can therefore create copyright infringement risk, licensing disputes and platform issues.

Fix: if you use open source code, understand the licence terms, have an OSS policy and keep track of what you are using. If you use third-party content (e.g. images) found online, check the licence position before using the content, pay any required licence fees and maintain clear records of provenance, particularly for AI-generated content.

8. I came up with the idea, so I own it

In general, IP rights do not protect ideas. Instead, IP rights protect the expression, fixation or manifestation of ideas. Patents protect novel inventions, design rights protect the appearance of novel or original product designs, copyright protects original creative works and trade marks protect brands. The idea itself is usually not protected.

The only limited protection for ideas or information is through trade secrets or confidential information, and even then protection depends on how the information is handled and disclosed.

Fix: focus on the expression, fixation or manifestation of the idea. This is especially important for patents and designs, both of which have strict novelty requirements that can easily be lost through premature disclosure. If you have a new invention or product, be very cautious about early disclosure (especially non-confidential disclosures such as disclosures online, disclosures at trade events and other disclosures to the general public). If protection is important, consider filing an application for a patent or a registered design before disclosure.

9. I paid a freelancer to design my logo, so I own it

In the UK, the author of a work is generally the first owner of copyright. If a freelancer designs a logo, they will usually own the copyright unless there is a written agreement assigning/transferring copyright ownership elsewhere. Payment alone does not change this.

There is an exception for employees acting in the course of employment, but even then the position can become unclear without properly drafted agreements. Disputes are particularly common where employees also undertake freelance work (e.g. an employed software developer who also does freelance development work on the side).

Fix: ensure that all employees and freelancers sign agreements that clearly deal with IP ownership and assign IP rights to the business.

10. NDAs aren’t worth the paper they’re written on

This is a common complaint. NDAs can cost money, slow down negotiations and are not always easy to enforce.

However, even where they are not enforced, they still serve an important purpose. They regulate the behaviour of the receiving party by setting out what can and cannot be done with confidential information. If drafted properly, they also provide useful leverage in resolving issues without going to court.

Fix: do not dismiss NDAs simply because enforcement can be difficult. When sharing confidential information outside the business, use NDAs that clearly define what is confidential, how it can be used and what happens if it is misused.

Key takeaways

Ultimately, intellectual property is not just a legal exercise or a box-ticking exercise for investors – it is a source of commercial leverage and value.

The most damaging IP problems are rarely dramatic courtroom disputes. More often, they stem from operational oversights such as unclear ownership, failure to undertake the appropriate filings, poorly drafted contracts (or no contracts at all) and/or inadequate internal processes.

The difficulty is that these issues almost never come to light at a convenient time. They tend to emerge during disputes, fundraising rounds, investment due diligence or the sale of the business, when the stakes are highest and the cost of fixing them is greatest.

Start-ups that treat IP protection as part of building the business from day one are far better positioned to scale, attract investment and protect long-term value.

Briffa are experts in all aspects of intellectual property law and practice. If you are a start-up looking to get your IP house in order, please get in touch.