Building Smart: Legal Strategy for Startups
In this episode of The Deal Scout, host Josh Wilson sits down with Jeff Holman to explore brand protection, legal strategy, and entrepreneurial growth. Jeff shares insights from his journey as both a business owner and attorney, offering valuable advice on everything from trademark clearance to navigating licensing deals.
Whether you're building a brand or looking to protect one, here’s a guide to the legal frameworks every founder and investor should understand, and how to build smarter from day one.
Links to this podcast episode on various platforms are embedded at the bottom of this post.
The Four Types of Intellectual Property
Founders should understand four core types of intellectual property:
1. Trademarks
Trademarks are how the world recognizes your brand. Names, logos, taglines, and even certain shapes, colors, or sounds can qualify as brand identifiers that deserve legal protection. Trademarks are one of the most important (and commonly misunderstood) areas of IP protection for startups.
Startups often unknown seen too many startups build momentum around a name or logo, only to find out later that someone else was using it first. Many startups build momentum around a name or logo, only to find out later that someone else was using it first. At best, this means a painful rebrand. At worst, it could lead to a cease-and-desist, a lawsuit, or major business disruption right when they’re trying to grow.
Getting ahead of this risk doesn’t have to be complicated. A basic trademark search early on—and ideally a federal registration as you scale—can save a lot of future headaches.
2. Patents
Patents protect inventions and processes, especially in tech-heavy or product-focused industries. Whether you copied it or not, if you invent something and it infringes the claims in a patent that somebody else owns, then they would have a right to stop you from doing it
Even well-meaning innovation can cross a legal line — and patent litigation is expensive. That’s why startups need early screening.
3. Copyright
Copyright protects original creative works: the paintings you paint, the code you write, the videos you film, and more. If it’s creative and fixed in some tangible form—digital or otherwise—it’s likely covered by copyright. However, unlike trademarks or patents, copyright does care about intent.
For copyright, intention is relevant. The actual facts of copying have to be there. You can’t infringe if you created something independently, but if you did copy, even accidentally, you’re at risk.
The big difference here is that copyright protection kicks in the moment the work is created. You don’t need to file anything to have basic rights. But if you want the ability to enforce those rights in court or pursue statutory damages, registration is a must. So, while inspiration is fair game, copying isn’t.
4. Trade Dress
Trade Dress is the look and feel of your product. Trade dress protects the visual design of products and packaging, such as the shape of a Kit-Kat candy bar or the colors they use on their packaging.
These four protections are all about one question: Can I stop someone else from doing what I did first?
Legal Clearance
When it comes to trademarks, a common startup mistake occurs when founders think if a domain name is available or a Google search doesn’t turn up an exact match, they’re in the clear. But that’s not how trademark law works. Search engines aren’t legal clearance tools; just because something doesn’t show up on Google doesn’t mean there’s not a conflict.
What real issue is whether your brand could be confusingly similar to one already in use, not just identical. The law looks at how your brand sounds, how it’s spelled, what it means, how it appears in context, etc.
The importance of a proper trademark clearance search cannot be overstated. This search stage involves checking trademark databases to ensure the brand isn’t already in use and legally protected by someone else. It also helps determine not just whether you can register your brand, but also whether using it could be seen as infringing on another. Doing this early helps avoid costly rebranding or legal conflicts later on.
One basic research tool is the US Patent Trademark Office’s official website, where you can search for existing patents or trademarks in the US.
When to Get Legal Help in Your Startup Journey
Founders often wait too long to get legal advice, which is usually after there’s already a problem. So, when should you get legal help involved? Founders should consider seeking legal protection as soon as they start using a brand, starting with common law rights, and then moving to federal trademark registration as you grow.
Even if you’ve never heard of a company or product, if your offering overlaps with protected IP, you could be legally liable. This is why legal screening early in the product and brand development process is essential. Startups that plan ahead reduce risk, avoid rework, and look more credible to future partners and investors.
The Investor’s Lens: Why IP Due Diligence Matters
Startups are often fueled by fast-paced creativity, bold ideas, and a fast and loose mindset. That early-stage momentum is often what makes them successful, but that momentum can lead founders to overlook critical legal concerns, especially around intellectual property. While that might not seem urgent at first, this approach becomes a major risk when third parties, like investors, get involved.
Investors typically conduct rigorous due diligence before putting money into a startup. Due diligence often involves setting up a data room where pitch decks, vendor agreements, employee contracts, and legal documents are made accessible for scrutiny. They’re scanning for anything that could become a liability after they write the check. If there’s a trademark dispute or a patent risk buried in the background, investors want to know before they put their capital on the line.
Even partnerships, such as those between brands and influencers, need to be legally structured with protective clauses. For instance, when high-profile influencers face controversy or a company experiences a product liability crisis, partners want the ability to legally sever ties quickly. Smart contracts allow for this flexibility.
Once investors are in, their options to exit the deal are often limited. Most startup investment agreements are filled with disclaimers outlining potential risks, such as market changes, failed products, political disruptions, and more. Unless there's a clear violation of investment law (think breaking SEC rules or fraud), investors can't easily back out. And when those violations do occur, they can result in serious consequences, including criminal charges.
What Intellectual Strategies Does Differently
Intellectual Strategies supports growing companies through a fractional legal model. Startups get access to patent attorneys, trademark attorneys, contract experts, and others as needed. Over time, each startups’ fractional team grows, morphs, and scales with the company.
Intellectual Strategies offers their new clients a free 30-minute strategy call, where they walk through where the business is now, what’s coming next, and how to implement legal strategy into it.
In Conclusion
If you’re building a company, you need to think about legal infrastructure early. Not because you’re planning for worst-case scenarios, but because you’re laying the groundwork for scale. Trademarks, copyrights, patents, and trade dress are all tools to help you grow smart and protect what you’re building.
*Podcast Links
*Disclaimer: This content is for general informational purposes only and does not constitute legal advice in any jurisdiction or create an attorney-client relationship with any attorney or law firm, including Intellectual Strategies. This might include legal advertising for applicable jurisdictions. Any discussion of past results, strategies, or outcomes does not guarantee similar results in any future matter. The views expressed do not necessarily reflect those of Intellectual Strategies or any affiliated organizations. Listeners, viewers, and readers should consult a qualified attorney for legal advice specific to their situation.
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