“Better, Faster, Stronger” — Identifying and Protecting Your Competitive Differentiators

17 November 2015 Innovative Technology Insights Blog

Competitive differentiators are the beneficial and unique aspects of your product or service compared to those of competitors. These qualities may provide benefits to consumers, such as a useful and unique feature, more reliable operation, or lower price; or may provide benefits to your organization, such as reducing manufacturing or operational costs. A competitive differentiator may be the functional and technical capabilities of your product or service that make you superior to consumers over your competition. In one sense, your competitive differentiators are your “secret sauce” or your organization’s reason for existing: they’re why customers should come to you rather than someone else. In this next post in our Startup Intellectual Property (IP) Series, we will explore why identifying and protecting your competitive differentiators is a key IP consideration for startups.

When we meet with new startups or emerging technical companies and ask them to describe their competitive differentiators, their answers often fall short of providing a specifically defined competitive differentiator that ties into the technical capability or functionality of their product or service. Many such companies describe their competitive differentiators simply by high level results or vague statements that their product or service is faster, better or easier to use. But, just as every company has a reason for existing, every company has similar high level claims, including the competitors and unrelated companies. So is this then really a competitive differentiator?

For technology based companies, the key to identifying your true competitive differentiators is to ask yourself, “what are the functional and technical capabilities of my product or service that enables it to be faster, better, or easier to use?” Is there a technical or functional feature of your product or service that the competition does not do that provides the results that you tout? If you are not just a “me too” company that copied the technology or functionality of your competitors, what specifically did you implement differently? Those functional and technical aspects of your product or service are your true and tangible competitive differentiators. Identification of these elements will improve your company’s story of differentiating its product and services by allowing you to confidentially and explicitly describe those differences. Investors, partners, advisors and potential customers will be more impressed with specific tangible competitive differentiators that are tied or built into your product or service.

Also once identified, the company can take steps to determine protectable intellectual property related to such differentiators. Many companies again struggle with this determination: when asked if they have any intellectual property, many will answer no or that they do not think so. But in the same breath, they will say they are a first mover or the only company to implement certain functional capabilities of its product or service and are not a “me too” company. Which one is it? Unless your sole distinctions from your competitor are location or capital, what makes you new and innovative will be a result of underlying intellectual property.

Your intellectual property can be protected by several different methods, including contracts, trade secrets, trademarks, copyrights, and patents. Each tool has its own advantages and benefits, and can be used alone or in combination to provide overlapping protection and exploit each of those advantages.

It is important to work with advisors who are not only technology savvy, but also understand business operations and can recognize valuable competitive differentiators of the company that are worthy of protection. By highlighting such differentiators as tangible, specific, and protectable, your corporate story is strengthened and validated to investors, partners, advisors and potential customers.

This blog is made available by Foley & Lardner LLP (“Foley” or “the Firm”) for informational purposes only. It is not meant to convey the Firm’s legal position on behalf of any client, nor is it intended to convey specific legal advice. Any opinions expressed in this article do not necessarily reflect the views of Foley & Lardner LLP, its partners, or its clients. Accordingly, do not act upon this information without seeking counsel from a licensed attorney. This blog is not intended to create, and receipt of it does not constitute, an attorney-client relationship. Communicating with Foley through this website by email, blog post, or otherwise, does not create an attorney-client relationship for any legal matter. Therefore, any communication or material you transmit to Foley through this blog, whether by email, blog post or any other manner, will not be treated as confidential or proprietary. The information on this blog is published “AS IS” and is not guaranteed to be complete, accurate, and or up-to-date. Foley makes no representations or warranties of any kind, express or implied, as to the operation or content of the site. Foley expressly disclaims all other guarantees, warranties, conditions and representations of any kind, either express or implied, whether arising under any statute, law, commercial use or otherwise, including implied warranties of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Foley or any of its partners, officers, employees, agents or affiliates be liable, directly or indirectly, under any theory of law (contract, tort, negligence or otherwise), to you or anyone else, for any claims, losses or damages, direct, indirect special, incidental, punitive or consequential, resulting from or occasioned by the creation, use of or reliance on this site (including information and other content) or any third party websites or the information, resources or material accessed through any such websites. In some jurisdictions, the contents of this blog may be considered Attorney Advertising. If applicable, please note that prior results do not guarantee a similar outcome. Photographs are for dramatization purposes only and may include models. Likenesses do not necessarily imply current client, partnership or employee status.

Related Services