The US has one of the largest numbers of startups, with the latest numbers from Demand Sage stating there are 1.14 million startups in the country. The estimates for tech-specific startups differ, with the average being around 68,738 (EmBroker).
And, arguably, tech startups are some of the most innovative. From AI to smart home tech, it’s these businesses that are creating the technology-first world we 100% couldn’t live without. The issue, however, can be that businesses aren’t necessarily protecting the business behind the innovation.
Below, we’ll explore the ways tech businesses can protect what they’re building.
Standard Business Insurance
Insurance is the least exciting part of a tech venture. But is it the most essential? Yes. The reality is this: data breaches, operational failures, employee disputes, and product liability don’t disappear just because a startup is small or early-stage.
It’s common for tech startups to have highly sensitive data. Some of that includes:
- Beta user information
- Prototype code
- Investor documentation
- Confidential business roadmaps
It’s such a big hassle if any of that leaks. Or, perhaps tech founders would argue that it is worse if any of it leaks, is corrupted, or becomes publicly exposed. The resulting damage can be massive. It’s not uncommon for this to halt funding, dissolve partnerships, and lead to costly legal proceedings.
Business insurance can cover all of that. We wouldn’t call it simple, but it is simple to take out a policy for:
- Professional liability coverage
- Cyber liability insurance
- Errors-and-omissions policies
- Business owner’s insurance
- Professional liability cover
Tech founders can bundle these for a better deal. Insurance defines the difference between a fixable mistake and a lawsuit.
Patents
The issue with patenting is that it’s slow and expensive. And sometimes, it’s intentionally complex, so we can see why tech founders avoid it, especially startups. The issue is that without thorough patent filings, even the most groundbreaking tech becomes vulnerable to replication. You will have seen it happen countless times, where products look almost identical. When one feature becomes widely adopted or imitated, founders have little recourse beyond frustration.
Patents give startups the right to defend originality. It’s not that competitors are malicious, but the speed of development makes overlap inevitable.
Essentially, a patent protects utilities, methods, and unique executions. Everyone is building the “next big thing,” so patent ownership remains the decisive advantage, however expensive and annoying it is to acquire.
Intellectual Property
Intellectual property (IP) is the foundation of value for most tech startups. Unlike retail or manufacturing, tech innovation isn’t built on materials. It’s built on logic systems, algorithms, branding, and proprietary frameworks.
Protecting IP establishes authorship before growth accelerates. The more successful the product, the more appealing it becomes to replicate. IP rights ensure that originality is tied to the creator. Don’t get it confused with patenting. Intellectual property is more of an umbrella term for creations of the mind, and a patent is a specific type of IP that protects new, useful inventions, like a process or machine.
Copyrights
Copyright protection gives founders leverage over the creative and structural output of their technology. Those include:
- Software code
- Written documentation
- UI/UX layouts
- Product design content
- API documentation
- Media assets associated with launch or branding
Copyrights confirm what was created, when it was created, and who created it. Disputes will frequently arise, so proof becomes the difference between reclaiming ownership and losing it.
Trademarks
Trademarks are another layer of identity. Tech products rely on names, visuals, interface impressions, and brand language to separate themselves. A product without a protected identity is a product that can be rerouted, renamed, and rebranded out of its own market.
Similar to a patent, it’s a long process but not impossible. Tech startups must first do a long trademark search to ensure their mark is available. Then, file an application with the United States Patent and Trademark Office (USPTO) online. The base fee is only $350, so it’s not too expensive.
Tech companies have the responsibility to protect their innovation. Founders don’t need to pause momentum, but they do need to match it with legal and structural protection.
