4 Common IP Mistakes Startups Make (And How to Avoid Them)

Don’t let simple mistakes cost your business time and money. This insight will explore how you can protect yourself from intellectual property (IP) errors from the outset – often involving prompt engagement with a lawyer.

1.  Skipping registrations

Registering your rights is important. A registered trade mark grants you exclusive rights which last for years. These rights come in the form of a registration certificate, which is a physical document you can point to if someone uses identical/similar marks for similar goods and services.

An unregistered mark does not give you these statutory protections. If you do not register your trade marks, it leaves your branding open for another party to copy and/or register it themselves. This could lead to a lengthy dispute, irrespective of whether you created the branding first.

Without registration protections in place, you may experience a loss of market identity due to your product being diluted by copycat products made to a lower standard or that have not been tested for safety, which can also damage your reputation.

How can Tozers help your startup?

Our fixed fee Branding MOT Service can help identify and protect your trade marks. Even if trade mark registration has been completely overlooked, there are different ways forward, and we can provide specialist advice to get the application right and avoid conflicts, saving you time and money.

2.  Unclear ownership and lack of agreements

It’s sensible to have an agreement about the ownership of IP rights at the commencement of your business venture. We regularly act for individuals who are business partners/businesses where ownership of the IP rights has not been clarified, and the relationship may have broken down.

“You’ve developed a brilliant product, but is it protected?”

Recently, we supported a client whose product had undergone extensive development and testing, but they hadn’t protected any of their registrable IP rights. Copyright ownership was unclear, and no trade marks or design rights had been sought. We helped them understand that securing IP is not just a legal formality – it’s a prerequisite to licensing and commercial success.

You should also be aware that investors will be interested in understanding how the rights are safeguarded, and you can avoid disputes with a clear agreement. Understanding how IP rights operate and how they will be owned is crucial and is often overlooked.

How can Tozers help your startup?

We can provide advice and draft a bespoke agreement to secure your IP rights.

If you are involved with a dispute/potential dispute, we understand that IP can be complex, and our experts can guide you through the relevant processes. Our feedback reflects our plain English guidance, strategic oversight, and proactive communication:

“Knowledgeable, responsive, and guided us through every step with clarity and confidence. They handled our case with expertise, providing practical advice and securing a positive outcome.”

“The communication was very good, even late in the evening. I would definitely use Tozers again – I'll be straight on the phone.”

3.  Ignoring online infringements

This works both ways:

• Not responding to infringement claims/threats against your business; and/or
• Not enforcing your IP rights (see below).
• Ignoring infringement claims can be costly. An IP owner can escalate infringement by you in formal letters, which may lead them to issue proceedings. Litigation is risky and costly, and the key to reports of infringement against you is to take swift action.

If you use a trade mark/try to register it without first undertaking conflict checks to see whether there is an earlier right, you may be infringing on someone else’s patent. This could lead to infringement claims and an opposition to your trade mark application. If this happens, your startup will likely have to go back to the drawing board for the company branding, which can be costly, especially if you have already gone to great expense producing branding materials with the infringing IP used.

Owning a registered IP right is only the first step on your IP journey. To truly safeguard your innovation, brand, or creative work, you must be proactive in enforcing those rights. Infringement can dilute your brand, confuse customers, and undermine the value of your work. That’s why monitoring the market, sending cease and desist letters, and taking legal action where necessary are essential parts of a wider IP strategy. You do not want to find that your claim is out of time or that the defence to infringement is that you did not take action soon enough.

How can Tozers help your startup?

At Tozers, we focus on dispute resolution and managing disputes. We regularly help clients resolve complex IP issues without setting foot in Court. If you have received notice of a dispute, you can speak with a fee earner on the telephone to understand how we can help you and what the estimated costs may be.

If you require advice in relation to your branding, we can perform preliminary due diligence and conflict checks to identify the risk of trade mark infringement before you have committed to using your branding and ordering marketing/promotional materials.

4.  Misunderstanding how the law operates when commissioning works

Many startups use third parties such as graphic designers and freelancers to create their website and logo. When a third party, such as a graphic designer, is instructed to design/develop products, websites and branding, the default position in law is that the designer (the commissioned party) is the legal owner of the copyright. The exception is where there is an agreement to the contrary or the individual is an employee.

Many startups are unaware of their position in law and find that the copyright has never been assigned to the business. This can be problematic because it may be difficult for your startup to pursue third-party copycats for infringement.

“Your freelancer’s gone rogue. Who owns the work?”

When a freelancer left our client’s business on bad terms and claimed ownership of key materials, threatening to hold them hostage, we stepped in. We clarified the terms of the implied licence and set out our client’s position in a robust letter. This led to early settlement discussions and a copyright assignment for a commercially sensible figure that was a drop in the ocean compared to litigation.

How can Tozers assist your startup?

Our expert IP team can assist you with the drafting of an assignment of IP rights to ensure that the rights transfer legally. An invalid assignment will have no legal effect. Where the matter becomes contentious, we will support you every step of the way, and our focus will be on resolving the matter swiftly and at proportionate cost.

Summary

IP isn’t just about protection – it’s about enabling growth, licensing, and investment. If you’re developing a product, make sure your IP foundations are solid.

Registering an IP can be vital for many a startup's success. We can advise about how to maximise the protection available to you and how to best secure your rights at an early stage. Proactive protection will save you time, costs, and stress in the long run. There may be an upfront cost, but you should consider the cost to your startup if you establish a business before securing your IP rights and losing it all because a third party copies your precious work.

Why instruct Tozers?

As a top firm for client satisfaction, we have built a reputation as good listeners who can help break down complex legal jargon into words you can understand and are experts at advising on your specific situation.

You can arrange to speak with us in a preliminary, no-obligation call today.

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