Most likely, after reading our first three articles in this series, you’ve recognized that it’s best to proactively avoid costly mistakes when starting a business rather than retroactively correcting them. This next pitfall is no exception. Perhaps equally insidious as the risk of not assembling the right team is the danger of ignoring the concept of intellectual property.
Intellectual property, or IP, describes most of the intangibles in your business, including trademarks, copyrights, patents, trade secrets, etc. If you don’t pay attention to your own IP, others can copy it. If you don’t pay attention to the IP of others, they can sue you for infringing on their intellectual property. At the very least, you could end up spending valuable time and money developing a product or service that you can’t use due to IP issues.
Let us imagine a scenario where you have spent substantial amounts of money developing a branding and marketing strategy. You’ve paid for new letterhead, new signage, new business cards and an updated website. The only problem is that there is another firm with a very similar logo. The only reason you know is that you got a notice from their legal counsel kindly asking you to cease using the offending marks. Now you’ve wasted precious resources on unusable marketing collateral.
This could have easily been avoided by consulting experts such as your financial advisor and attorney before fully committing to the branding. These upfront legal costs may seem daunting when you’re already stretched with the expense of starting a new business but they could pay dividends in both time and money in the long run. Join us again next time for a look at the necessity of market research.
John R. McCallum, CPA
John R. McCallum is a member with GranthamPoole PLLC and a recognized leader in the field of cost segregation and various real estate taxation matters. He has also written, taught, and spoken on many topics in the area over the years. Please contact John at firstname.lastname@example.org, www.linkedin.com/in/john-mccallum, or 601-499-2400. CPA License # 5323
The above does not represent tax advice. Each situation is fact-dependent, and you should seek the advice of a competent advisor. GranthamPoole PLLC is a provider of tax, accounting, advisory and strategic services, partnering with clients across a broad spectrum of industries and sizes.