Understanding intellectual property

Understanding intellectual property: what startups need to know

Wayne Bryant works at RTC North and has worked with businesses helping them in managing and exploiting IP for over seven years, working with SMEs across all industries as well as larger organisations including NHS Trusts and European Research Consortiums. Here, he explains what entrepreneurs need to know about intellectual property.

What is intellectual property?

Intellectual property (IP) refers to creations of the mind: inventions; literary and artistic works; and symbols, names and images used in commerce.

The following are ways of protecting your IP:

  • Copyright – is the right to copy. This means that the original creators of original literary, dramatic, musical and artistic work, including illustration and photography, and anyone they give authorisation to are the only ones with the exclusive right to reproduce the work.
  • A Trademark (registered) – refers to a recognisable insignia, phrase, word, or symbol that denotes a specific product and legally differentiates it from all other products of its kind.
  • A Trade Secret – is information that has either actual or potential independent economic value by virtue of not being generally known, has value to others who cannot legitimately obtain the information, and is subject to reasonable efforts to maintain its secrecy. 
  • A Patent (registered) – is an exclusive right granted for an invention, which is a product or a process that provides, in general, a new way of doing something, or offers a new technical solution to a problem. To get a patent, technical information about the invention must be disclosed to the public in a patent application.
  • Designs (registered) protect the visual appearance of a product or item and gives you exclusive rights for that appearance to the extent that, if necessary, there is a legal right to stop an unauthorised party from producing or using your design.

“Registered” means IP rights that are registered with the Intellectual Property Office within the country that they are protected. This often provides stronger protection than non-registered rights but there will always be costs associated with attaining registration.

Who owns the IP?

  • The  owner is normally the inventor/designer/creator
  • But ownership often automatically gets transferred to an employer when the Intellectual Property is created within the first owner’s job role.
  • But not always; it is worth having an IP management clause in employees’ contracts.
  • IP agreements transferring ownership of IP to the correct party are VERY important.
  • Never assume IP rights have been properly transferred until you see it in writing.

What’s the point of the IP?

  • IP provides a mechanism to sue third parties for unauthorised use (legal action can be costly and other avenues to resolve any disputes should be explored in the first instance)
  • “Keep off the grass” – a deterrent. IP lets people know that someone owns the rights to an idea and it cannot just be used freely.
  • Licensing opportunities – your intellectual property is a saleable/tradeable asset and you can license its use to third parties under terms agreeable to yourself.
  • Increases credibility – when seeking investment or applying for funding a tangible and tidy intellectual property portfolio can increase your credibility.
  • Leverage in negotiations – IP adds value in negotiations as it is a saleable/tradeable asset that often the other negotiating party will require use of.
  • Tax relief – registered IP can be used in applications to claim tax relief such as R&D tax credits.

If IP doesn’t:  a) deliver return on investment b) deliver clear commercial advantage, then make some serious consideration as to whether to invest in it.

Common problems

•the business doesn’t know what IP they own

•the business believes they own IP when they actually don’t

•the business is using someone else’s IP without authorisation

•the business is giving their IP away for free

•the business is misrepresenting their position to third parties

•the business is over-estimating the value of third party IP

•the business is pursuing expensive registered IP that is unnecessary

•the business entering into confidential negotiations without an NDA

•the business is failing to protect valuable IP with registered rights

Why do business owners need to understand IP?

• So that they can make a return on investment and profit from IP and/or gain commercial advantage against competitors

• The better the business understands IP the better they can exploit it as a business asset and make better decisions regarding IP.


• Agreements: ensure agreements are in place addressing IP ownership with the following:



Third party suppliers

• Protect IP with registered rights, registered with the IP Office in the country you wish to protect them, using:




Find more advice and support for startups in our Business Startups Toolkit.