Why Do Tech Companies Need Legal Advice When Launching a New Product?

Why Do Tech Companies Need Legal Advice When Launching a New Product?

The fiercely competitive world of the tech industry attracts some of the planets brightest minds. The incentives include attractive remuneration packages, state-of-the-art working environments and the opportunity to work on ground breaking projects, products and services. When a project comes to fruition, however and it is time to launch the new product or service, it is the legal experts that tech companies need counsel from and not the tech whiz kids. With that in mind here we explore why tech companies need legal advice when launching a new product.

A survey carried out by YouGov in 2016 found that, on average, tech companies are losing around £11.5K per year because they are not receiving enough legal advice.

Documenting Ownership of Products  

Having spent a significant amount of time and effort researching and developing new innovations and products, tech companies need to protect this intellectual property (IP) by getting it patented. There are two main reasons for this:

• Legally documenting the ownership of IP prevents employees from leaving the company, setting up independently and claiming the idea for themselves.
• Investors are more attracted to companies who are able to prove ownership of their IP assets.

There are several examples of how not properly protecting IP can lead to significant problems and expense. Mark Zuckerberg paid his ex-classmates $65 million to end the lawsuit over who owned the IP for Facebook.

To ensure that the procedure is completed properly and that all legal and regulatory challenges have been met, it is advisable to take expert legal advice from a specialist firm like DWF.

Protecting the Work from Competitors

Not only will securing patents help protect your IP from within the company and help secure potential investment, it also helps keep it safe from competitors. In fact, this is the case even if you only take the patent to the point at which the application is published. From that date on the IP is owned by you and can’t be used by competitors without your permission.

Inspire and Reward Your Team

Another good reason to seek a patent application is to inspire and reward your team and thus encourage hard work, innovation and collaboration. A published patent application and the impending patent itself serve as a just reward for the hard work employees will have put into developing the IP and recognising that is paramount for morale.

Other incentives for reaching such milestones include stock options, bonuses and public recognition.

Taking legal advice and covering your tech companies IP properly has many benefits, but those associated with not doing so are difficult to pin point.