Recognizing a trademark certificate as invalid due to infringement of the rights of others: what a business should know before a dispute arises

Intellectual property is one of the core assets of any startup. Yet IP protection is often postponed while founders focus on product development and fundraising. This usually leads to critical mistakes that can delay market entry, undermine investor confidence, or even put the business at risk.

In this article, we review four common and high-impact IP mistakes made by startups, explain their consequences, and provide practical steps to avoid them.

Mistake 1. Delaying trademark registration

Many founders postpone filing a trademark application until the product proves traction. This seems cost-efficient at first, but creates significant legal exposure.

Why this is risky

In Ukraine, trademark priority is determined by filing date, not by first use. If a third party files first, the startup may lose the right to use its own brand.

International angle

If you plan to expand abroad, your Ukrainian filing strategy should be aligned with future foreign filings. Delays weaken your position in conflicts and enforcement.

Legal role

An IP lawyer helps with clearance searches, risk assessment, class strategy, and coordinated filing in Ukraine and other target jurisdictions.

Recommendation: file your trademark as early as possible, ideally before public launch or active investor outreach.

Mistake 2. No proper assignment of IP rights from employees and contractors

Startups usually rely on mixed teams: employees, freelancers, agencies, and external experts. Without proper documentation, the company may not own key IP assets created for the product.

Employee-created works

Employment documents should clearly define ownership transfer of proprietary rights for works created within job duties.

Commissioned works

Contracts with contractors must include explicit assignment of exclusive proprietary rights to the startup.

Code, models, product assets

Special attention is needed for source code, ML models, documentation, design systems, and databases. Without proper clauses, ownership may remain with the creator.

Due diligence risk

In investment rounds, unclear ownership is a frequent red flag that reduces valuation or blocks the deal.

Recommendation: implement a standard IP package: assignment agreements, acceptance acts, NDAs, and employee IP clauses.

Mistake 3. Underestimating patent opportunities

Many startups think patents are relevant only for large corporations. In reality, patents can be a strategic tool for technology businesses at different stages.

Patentability potential

Patentable subject matter may include technical solutions, processing methods, architecture-specific implementations, and hardware-software interactions.

Business value

• increases company valuation;
• builds barriers to entry for competitors;
• improves negotiating power in fundraising;
• enables licensing-based monetization.

Recommendation: run an early patent assessment and define a filing strategy for your target markets.

Mistake 4. Using third-party IP without proper permissions

Startups often use third-party assets: images, fonts, music, code libraries, templates, and datasets. If rights are not properly secured, this may trigger legal claims and operational disruption.

License complexity

Even when assets are used under licenses, terms may not permit intended commercial use, redistribution, or scaling.

Practical consequences

Potential outcomes include takedown requests, damages, product restrictions, app-store issues, and litigation.

Recommendation: conduct an IP audit of all external assets and document legal basis for each item used in the product.

All four mistakes are preventable if IP strategy is addressed from day one. Prevention is significantly cheaper and safer than fixing disputes after damage occurs.