SMEs: The worst intellectual property mistakes are not what you think.

by Todd Bailey
4 minute read - April 26, 2021
IP without Jargon

Generating value in today’s digital world is easier than ever. So is copying and stealing.

But you can reduce the risks by protecting your IP (intellectual property). Although information about IP is everywhere, Scale AI wants to help you transform IP information into IP action. In this blog, IP without Jargon, we’re unpacking IP concepts, debunking IP myths and, along the way, throwing in some IP terminology [in square brackets] to help you learn the lingo. Let’s go.


SMEs: The worst intellectual property mistakes are not what you think.

On this April 26th, designated by the World Intellectual Property Organization as “World IP Day”, Scale AI wants to raise awareness about the importance intellectual property (IP) has for your business’s future success.

As an SME, the most important reason to protect IP is to attract potential investors. At each investment stage, your IP – or lack thereof – comes under close scrutiny.

Protecting your IP shows investors that you have a proprietary offering that can provide a sustainable edge over the competition. In other words, having protected IP makes investing in your business less risky.

Protected IP provides real value to your business. A home built on swamp land won’t attract much interest, and neither will an unprotected business. Businesses that protect their IP are 4x more likely to succeed. That’s a proven fact.

But the biggest IP mistakes SMEs make will surprise you. Addressing these relatively simple – but important – problems will help get your business on track for success.

1) An unprotected name brand.

IP Myth: Registering a business name or domain name protects it from competitors.

IP Fact: Only trademark protection can help prevent others from using a similar brand name in the marketplace. Just registering your business or domain name doesn’t do that, or guarantee that you can use that name with your business.

Your name is everything. You spent months choosing just the right one. It’s how customers know you. There’s no question that your brand name is your single most important IP asset.

But how much thought have you given to protecting it?

What if a competitor suddenly starts using something similar? Or, worse, what if someone demands you stop using it immediately because it’s too close to theirs?

SMEs often overlook registering for trademark protection, or checking if other businesses are already using a similar name or brand.

Although you can file for trademark protection yourself, doing that will likely weaken your protection, so it’s best to hire a trademark professional to do it right. This is an investment in your future success. Don’t cut corners with your most important IP asset.

Investors will be looking for strong registered trademark protection.

2) We don’t have any IP.

IP Myth: IP is just another word for patents or inventions.

IP Fact: IP is any idea, information or data that can be legally protected against unauthorized use.   

Every business has IP, especially technology and digital businesses – and so does yours.

Scale AI’s blog article Your IP Needs You has many examples of IP that you may have. Being able to see the IP in your business is an important step on your path to success.

But this is not about awarding excellence. Leave that for the Nobel and other prizes. Protecting IP is actually about reinforcing your business strategy, plain and simple. What IP helps you succeed and grow?

Your business has IP. Find it. Understand what gives it value. Then, protect it according to what supports your business goals.

Investors look for protected IP as a sign of a business that’s on-track for future success.

3) Who owns your IP?

IP Myth: Our business automatically owns all the IP created by our employees and vendors.

IP Fact: Unless contracts expressly transfer IP ownership, IP will be owned by the employee or vendor that created it.

Many people just assume that their business owns its IP. Perhaps that’s because they paid a vendor or employee to create it, or because they had a verbal agreement with a business partner or technology collaborator.

In reality, unless you have a signed, written contract with your employees, vendors, founders, business partners, etc., ownership of IP will remain with the person that created it.

It doesn’t matter who paid. The first owner of any IP is always the creator (employee, vendor, R&D partner, etc.).   A written, signed contract transferring ownership is required.

Don’t wait for a nasty surprise. Ensure you have written contracts with IP clauses that a lawyer has helped ensure are right for your business.  Involving a lawyer to get it right is also an investment in your future success.

Investors will want to know: do you actually own your IP?

4) What’s your plan?

IP Myth: We don’t need an IP plan because we don’t have any protected IP.

IP Fact: Even if you choose not to protect your IP now, your competitors or others may have IP that you might infringe. Having an IP plan will help identify your risk areas, and proactively adapt.

When you want to get to someplace new, do you wander aimlessly until you get there? Of course not. You enter the destination in your trusty mapping app and then follow the directions.

Your IP objectives need the same – a roadmap. Also known as an IP strategy, an IP plan is a roadmap to help you identify and manage IP risks and opportunities.

SMEs develop all kinds of plans: business plans, recruiting plans, marketing plans, and social media plans, to name a few. An IP plan is also essential.

But if you think it’s too soon to develop an IP plan, think again. Do you wait until after you’ve done marketing to do a marketing plan, or until after recruiting to develop a recruiting plan?

Having an IP plan before risks and opportunities arise will help you identify the important ones when they do appear. Successful SMEs are proactive.

Baseball legend Yogi Berra once said: If you don’t know where you are going, you might not get there.

Having an IP plan shows investors you have a savvy business strategy built for growth.

IP Without Jargon

Understanding and protecting IP is essential to your business’s growth and success. That’s why we started our blog series IP Without Jargon, to give you simple information and tech-focused real case studies to demonstrate how protected IP can help you. Check it out.

Happy World IP Day!

*Todd is Chief IP Officer at Scale AI, and a lawyer, patent agent and IP strategist with 25 years’ experience helping startups, SMEs and multinationals protect and commercialize their IP.

Please Note: Concepts discussed here have been simplified to facilitate learning. You should consult a qualified IP lawyer or agent to discuss your unique IP needs. Protecting your IP should not be a do-it-yourself project.

Scale AI is Canada’s AI Supercluster, investing in AI supply chain projects, acceleration and talent development across Canada. Visit us at www.scaleai.ca to see how we can help your business grow.

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