Inventors, entrepreneurs and start-ups often like taking risks and pushing the boundaries. That is what innovation is all about and surely our world would not have progressed as much if it wasn’t for this risk loving business community. However, when it comes to the legal aspects of a business, making mistakes can have disastrous consequences.   

With this in mind I wanted to highlight the 6 deadliest legal mistakes that a business owner may make and also look at how to avoid them.

1. Not seeking legal advice at the beginning/Not having a legal budget. When starting a business, many entrepreneurs and business founders will have a budget for accounting, marketing, product development and sale. However many will not have a budget for legal advice either because they are too busy or because they think a lawyer will cost too much. One thing that I want to make absolutely clear is that knowing the legal pitfalls is crucial to avoiding or at least managing them. Prevention is better than cure also in legal matters and certainly the cost of prevention is much less than the cost of correction. You need a lawyer that understands your business. If you are involved in the technology field, then having a lawyer that appreciates the intricacies of technology licensing and protection can be invaluable, so that you can genuinely trust your advisor to help you navigate the obstacles and avoid the pitfalls that your business will face. You must be able to connect and communicate with your lawyer.  Communication is essential.  The more your lawyer knows about your business plans/needs/challenges, the better and more cost effective the advice from that lawyer will be. At Anassutzi & Co we devote and invest time (our time!) to understand your business so that we can provide the best solution for you, your business at that point. 

2. Not protecting intellectual property.  Intellectual property includes a variety of rights patents, copyrights, trademarks, trade secrets, and other confidential or proprietary information.  Many businesses fail to protect their inventions, works and brands and to restrict disclosure of confidential information. In addition, a business owner may think that if he does not have a patent there is nothing he can do and vice versa that if he applies for a patent that is all the protection he needs. Unfortunately it is not that simple. It is important to understand that even if a business does not have patents it is still worth discussing the various options for protection with an intellectual property specialist since it may have copyright or trade secrets as (or even more valuable). At Anassutzi & Co we aim at providing the right solution for you and your business reality.   

3. Not completely recognizing the value of intellectual property. Entrepreneurs often do not realise how they can profit from their intellectual property and if they do not do this, then they may not be able to capture all the intellectual property that they create potentially wasting valuable resources. Intellectual property (even if not core for the business) can produce extra revenue through: (a) negotiation of a license with another business, (b) sale/assignment of the intellectual property (or part of it) to another business, (c) enforcing intellectual property rights against a suspected infringer and collecting extra revenue by way of settlement, licences or damages, or (d) protecting the business against competition and gaining an increase share of the market.   

4. Not using these rights as a part of their overall plan of success. It is important that the intellectual property strategy the entrepreneur selects aligns with his business and personal goals, so that intellectual property can be managed to help the business achieve its goals. This means having a fluid intellectual property strategy that can be amended and reviewed continuously as the business grows. At Anassutzi & Co we are experienced in providing training and intellectual property management for businesses large and small. 

5. Not carrying out appropriate clearances. Using a trademark, domain name, design or product manufacture without searching whether someone else has registered or applied for registering a similar name, design etc, can be a very expensive mistake not only in terms of having to adopt another name, domain name etc, but also in terms of bad publicity and PR, lost customers and potentially very expensive damages. 

6. Not having appropriate agreements.  Without the use of appropriate agreements, a business may lose its valuable intellectual property assets. A business often needs people to perform various tasks either as employees or third party suppliers/contractors. In each case the business must adopt the correct agreement establishing ownership of intellectual property and other rights and obligations such as non-competition, non-solicitation. It is important to remember that a business does not own the rights to the product it just paid to have developed because there is nothing in writing to secure those rights or the written document is inadequate. At Anassutzi & Co we will advise on the best and most cost effective contract for your business.