Introduction
Imagine the following scenario: You come up with an idea, put your soul into it, cultivate a prototype and finally turn it into a product which is backed by investors and that the customers will buy. Out of nowhere – a rival or a former employee says it was their idea. You now realize that you don’t have any evidence to showcase that the idea, prototype/product is actually yours.
It’s an entrepreneur’s absolute nightmare, which, sadly, happens all the time.
Mark Zuckerberg famously spent years battling the Winklevoss brothers over who owned Facebook and ended up settling for $65 Million. To avoid such hassles and to protect what’s yours, one must understand how to safeguard one’s “Intellectual Property”, a term that applies to things as diverse as your business plans, your algorithms, your Company’s name and logo.
IP rights protect one’s creation and innovation from unauthorized replication by a competitor. Thus, it is absolutely imperative that a startup must protect its IP assets. IP serves as a cornerstone for a startup by setting it apart from its counterparts due to its uniqueness.
Registration for a startup is approved only for companies engaged in developing products and services. Technically, any organization or company working towards finding a solution through innovation for an already existing problem can register itself as a startup. Subsequently, protecting innovations through IP rights becomes essential.
IP rights serve as a safeguard, ensuring that the unique ideas and technologies developed by startups are legally protected from unauthorized use by imitation. By securing patents, trademarks, copyrights, and trade secrets, startups can maintain their uniqueness and continue innovating without fear. This protection is not just a legal formality but also a necessity for sustaining the startup’s growth.
How does such IPR protect startups?
You don’t have to be Isaac Newton to create something worthy of a patent. Patents can apply to everything from a design, an algorithm, software, a chemical drug, and even a game. IP is the product of an individual’s intellect; thus, it is indispensable and needs to be protected. IP can be protected by obtaining exclusive yet transferable rights over the property and enforcing the associates’ rights under the IPR regime. Patents safeguard inventions and unique processes; copyrights protect creative works, trademarks secure brand identity, and trade secrets encompass confidential business information that gives you a competitive edge.
Assessing IP value
The prima facie step towards developing a sound IP strategy is to appraise the startup’s IP assets. This involves identifying which business aspect is unique and how they contribute to a competitive advantage.
Prioritization
Given the multifariousness of intellectual assets, prioritizing which IP to protect first is critical. This decision should primarily align with the startup’s resource allocation and business goals.
IP Audits
IP audits are crucial for maintaining effective protection of the IP. They help identify new assets that require protection, making it easy for the startup to have a clean organization and record keeping.
Patent filing
The patent filing process involves an exhaustive patent search coupled with preparing a detailed application. Subsequently, this also involves responding effectively to any office actions.
Trademark selection
Choosing a unique brand name and logo is indispensable for any startup. A unique or creative trademark of a startup serves as a beacon for its popularity and helps customers identify its product. Subsequently, securing them through trademark registration is vital as this establishes dominance over the said logo or words used in the mark. This way, any rival cannot use the startup’s logo, and if infringement happens, the startup can institute a legal proceeding against the infringer.
Copyrights and Trade secrets
Copyrights protect creations, whilst trade secrets protect confidential business information. Both are of utmost importance for any startup as these play a pivotal role in ensuring the startup has a successful career in the future.
IP in the business sphere
A strong IP portfolio can notably enhance a startup’s attractiveness to investors, highlighting its potential for innovation and market dominance. IP assets can be leveraged through licensing agreements, partnerships, and other commercial arrangements, turning them into valuable revenue streams.
Government Initiatives for Startups
Startup Intellectual Property Protection (‘SIPP’) is a scheme launched by the
Department for Promotion of Industry and Internal Trade to clear the way for protecting patents, trademarks, and designs for startups involved in innovation.
Patents – Startups can benefit from fast-tracking patent applications to expedite the realization of their IPRs. Under the SIPP scheme, a panel of facilitators assist the startups in filing their IP applications. The central government covers all the expenses of these facilitators so that the startups solely focus on paying statutory fees for their IPs. Furthermore, Startups can receive an 80% rebate on patent filing fees compared to other companies, thereby providing additional benefits to Startups.
Trade Marks – The central government, under the SIPP scheme, pays the statutory fees for a trademark filing on behalf of the startup. Further, the Trademark Rules, 2017, were recently amended to provide a 50% rebate on the Trademark filing fee to startups.
Industrial Designs – Under the SIPP scheme, the central government pays the statutory fee for filing a design application on behalf of the startup, protecting any design produced by the startup.
Conclusion
IP protection in India for any growing startup is not just about securing mere legal rights but more so about creating a foundation for sustainability and competitive advantage on a long-term basis. Conducting IP audits, registering IP, monitoring and enforcing the rights, using IP to fuel further growth, educating the team, and considering global strategies are all ways startups can effectively protect their innovations and improve their market position.
Of course, it is daunting, but a little planning with the right resources can help one navigate the fine print of IPR. A startup should delicately build its IP into an asset that drives growth, attracts investment, and shores up a strong position in the market. In other words, IP and its management form vital steps toward a sustainable and successful enterprise in a fast-moving business environment.
~ Sanjay Sethiya is the Managing Partner at Law Square, Advocates & Solicitors.
~ Akshatha Prasad M D is an Associate at Law Square, Advocates & Solicitors