Intellectual Property (IP) clearance should be an integral part of business planning, regardless of the size of the business. IP clearance may be as simple as checking the proper trademark databases before choosing a name for a new business or subsidiary. In other situations, IP clearance may include conducting an extensive patent search and analysis prior to building a new industrial facility. IP clearance is the process of checking whether IP owned by others may be an impediment to your new venture. Or to put it more bluntly, IP clearance is undertaken to minimize the risk that your new business venture will be a losing defendant in an infringement suit.
IP clearance should be proportional to the scale of the business venture. It makes no sense to spend several thousand dollars in legal and search firm fees conducting extensive trademark searches in far-flung jurisdictions for a new single location auto repair business. Similarly, it is poor business judgment to spend hundreds of thousands of dollars in product development costs and zero on IP clearance, when you can be met with an IP infringement suit enjoining sales of the new product and potentially stripping you of profits.
Businesses should consider the potential risk and then conduct the proper, proportionate IP clearance to minimize the risk. As with any legal liability risk, it is impossible to achieve 100% elimination of the risk from IP infringement lawsuits. Good business judgment should guide the decision as to the level of IP clearance needed for each circumstance. In some cases the risk may be better known, such as when a known competitor has dominated the market with a history of aggressive enforcement of its IP rights. In that scenario, it may be necessary only to look at the IP held by that single competitor, as opposed to trying to search the entire landscape of applicable IP held by others.
Consultation with experienced IP counsel can provide you with IP clearance options and estimates for those options. With that knowledge, you can make a fully informed business decision that protects your company’s resources.