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4 Ways to Avoid Failure Due to Litigation: A Guide for Startups

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A whole host of hazards stand between startups and long term success, and while you might be focused on things like finding investment and bolstering your relationships with clients, this could cause you to overlook other important obstacles.

For example, plenty of fledgling firms fail before they reach their full potential as a result of litigation. Luckily for you, with a few deft moves you can diminish the chances of this fate befalling your startup, so let’s explore your options right here.


Get expert legal advice ASAP

Rather than waiting for a lawsuit to fall into your lap, it’s better to preempt this possibility by working with an experienced, qualified attorney like those at Heer Law from day one.

The guidance of a professional in this field will ensure that you are able to pinpoint potential problems before they balloon into potentially disastrous legal action taken by a third party against your business.

If your startup blossoms and grows, then you’ll eventually need to think about having an in-house legal team. But during the early stages, simply consulting with a lawyer at the right moments will be cost-effective as well as informative.

Steer clear of potential infringement

The main issue you’ll encounter when building a startup is finding yourself in the firing line because you have infringed on the copyright or trademark belonging to another organization or individual.

This could come about because you develop a product which crosses over with existing IP that has been patented. It could arise because your branding is too similar to that of a rival in the same market niche that you are targeting.

Guarding against such eventualities requires a good amount of research. Thankfully it’s easy enough to search for existing patents, look up registered trademarks and seek out copyrighted content so you can stop short of intruding into creative and commercial territory that’s already been claimed by another.

Once again, if you are in any doubt then an IP lawyer will be the best person to find potential points of conflict and suggest solutions to preempt any likely litigation which may arise in the future.

Avoid procrastination

Another important defense against litigation which startups can mount involves making sure that pain points are identified and reported as a matter of internal procedure, rather than being swept under the rug or set to one side while other aspects of your operations are prioritized.

Part of this requires you to encourage employees to speak out if they think there is a potential risk for litigation based on the projects you are pursuing or the products you are developing. Half the battle is identifying the problem areas in the first place, and you might not be able to do this on your own.

Don’t skimp on insurance

There are lots of types of litigation which new businesses might encounter, and having adequate insurance in place to encompass legal costs if any need to be incurred is a good idea.

For example, liability insurance is a must-have for firms that want to avoid the damaging fallout of an on-site injury or accident, especially one involving a third party.

There will of course be a price to pay for this, but as with working with a lawyer, it is better to invest in insurance as a precaution rather than taking a risk with the future of your startup.

Final thoughts

There is no way to guarantee that your startup will soar to new heights rather than falling short or failing altogether. However, it’s eminently advisable to embrace a cautious approach when it comes to the prospect of litigation, as the alternative is leaving your company on the precipice of catastrophe at all times.

Written by Marcus Richards

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