Patents can provide a barrier to entry to competitors of a company, particularly where the company can patent its business model or an important feature or features of its main product or service. Such a barrier may give the company just the competitive advantage it needs to become a success in this free marketplace in which we live. Patent protection now is available for business models and software, and Courts are favoring patent protection in these areas. Presently, one of the hot areas is patenting e-commerce business models. Given the fact that the Internet is in its relevant infancy, broad protection may be available for new business models in this area.
Trademarks can assist in protecting brand names coined by the company.
The trademark protection similarly can prove to be extremely valuable to the company, particularly where the mark protected represents a product or service that becomes a standard in the industry. Financing is crucial for the survival of most early-stage companies. IP also can be helpful in marketing. The company can tout its patent and trademark protection by appropriately marking its products and by noting its protection in its promotional literature. IP should be a very early consideration for a start-up company.