Intellectual property & Start-ups

Intellectual property (IP) is a term used to describe the creations of the Research & innovation. Although intangible (in the sense of not being physical), intellectual property is immensely valuable because it gives the owner certain security over the product/idea and also some rights — including the exclusive exploitation of the IP for-profit and the right to exclude others from using the IP. These rights are generally known as IP rights. The purpose of IP law is to protect and govern all aspects of IP rights.

More often than not, when the protection of IP comes to mind, people tend to think it relates just to the media — artists, actors, and writers. IP is much more than that. There are various aspects of IP which also apply to large companies as well as start-ups.

Unfortunately, many start-ups have a minimum interest & mindset towards the protection of their IP rights. This often stems from their belief in the notion that "ideas are a dime a dozen; only execution matters." The problem with this mindset is that the delay in securing a start-up’s IP can do severe and sometimes irreversible harm to the start-ups, both from a legal and business standpoint. IP matters, which is why companies like Google, Apple, and other tech giants spend billions of dollars suing to secure their IP.

The IP of a tech start-ups is typically its most valuable asset. The products and services it bring to market will help it secure market share and earn revenue, but neither the market share nor revenue will be secure unless the company can prevent other companies from stealing its concepts, brands, and inventions. IP also constitutes a major consideration for investors because they'll want to know that your start-ups have control over all the ideas, code, and branding you'll need to develop and market your products and services. Clearly, without its IP, a tech start-up would have little leverage in the market, thus making it essential to protect these rights as quickly as possible.

The importance of the protection of IP rights cannot be overemphasized. A start-up is simply unlikely to survive unless its IP is securely under its control. Some of the more common errors start-ups make, such as failing to get IP assigned to the company, can be incredibly difficult to fix if not resolved early on. Registration is also often tied to timeliness as highlighted above, and failure to register in time might result in another company securing the rights in question. Clearly, the protection of IP must be an integral part of every start-up’s business strategy, to facilitate growth, prevent infringement, and increase revenue.

Patents may provide a number of benefits to young businesses. For example, a robust patent portfolio or a key patent can help attract investors, since it may serve as barrier to entry by competitors. Furthermore, the filing of a patent application will enable the company to advertise "patent pending" along with its product or service. In addition to potentially attracting investors, the "patented" or "patent pending" labels may deter would-be competitors, or force those competitors to adopt different designs and technologies.

As indicated above, once a patent issues it may be used to stop competitors from entering the field and allows for recovery of damages for infringement. Patents can also help the finances of a business by providing an opportunity to generate revenue from licensing.

1. Patents are not the only IP asset that should be protected early
   A key component of a start-up’s IP strategy typically involves the early filing of at least one patent application; however, the early protection of other forms of IP may be beneficial for a startup to consider, including: Trademarks
2. You have a patent – now what?
   Contrary to a common belief, the grant of a patent does not grant the right to the patent owner to practice the subject matter claimed in the patent. Rather, a patent grants the right to the patent owner to exclude others from making, selling, using or importing the subject matter claimed in the patent. Further, the grant of a patent does not automatically equate to the formation of a successful business. While some inventors are able to successfully develop and expand a business based on a technology covered by one or more patents, many inventors are ill-equipped to successfully transform a patent grant into a successful start-up.
   There are a variety of resources available to help inventors formulate a successful business plan. For example, business incubators and accelerators may provide resources (i.e. training, workspace, mentoring, connections, etc.) to a startup to help grow the business.
3. Filing in as many jurisdictions as possible may not be the best approach

   Most start-ups have limited resources and must selectively limit its filings.

   A good rule of thumb is to file for protection, in order of importance, in:

   • Jurisdictions where the start-ups is operating,
   • Jurisdictions where the start-up’s customers are located, and
   • Jurisdictions where the start-up’s competitors are operating.

   While there may be value in obtaining patent protection in a jurisdiction where enforcement by the start-ups is unlikely, eliminating jurisdictions where enforcement is not feasible may be one way for a start-up to reduce desired filing jurisdictions.

4. Take advantage of available IPIndia programs
   A first action from the USPTO in response to a newly filed application may take two or more years to receive. The total time from filing to grant can exceed three years. For a start-up that needs to show immediate results to push for more funding, such a delay can be harmful. Fortunately, the USPTO has a variety of programs and procedures that may be successfully used to speed up the patent grant process.
5. Broad does not always mean better
   

   A long-standing philosophy in patent law has been to claim an invention as broadly as possible to prevent as many potential infringers as possible. In theory, this is a good idea; however, in practice, it may not be the most efficient approach for a start-up with limited resources.

   Instead, it may be more practical to focus the claims on a specific embodiment of the invention closely tied to an actual product or process being practiced or envisioned by the start-ups. By focusing the claims in this way, an Examiner’s search and consideration will be limited to art related to the claimed embodiment and not irrelevant art arguably reading on overly broad claims.

   As a result, a valuable patent having claims focused on the actual activity or product of the start-ups may be granted more quickly. Subsequent continuation applications may be used to broaden the scope of the claims to cover more embodiments, but at least the start-ups will be able to restrict others from making, selling, using or importing a system or process that closely matches their own. Such a patent focused on a specific activity or product of the start-ups, issued relatively quickly, can also be a valuable marketing chip for the start-ups with respect to investors and customers.

6. Intellectual Property Strategies for Technology Start-ups:
   
   1. Keep your employment work separate from your new idea
   2. Don’t let other people claim ownership of your IP or your company
   3. Have contributors assign their IP to the company
   4. Evaluate your core assets and decide on the type of IP protection you need
   5. Make sure you have a unique name
   6. Patent strategy should be cost-effective and not avoided
   7. Consider a global patent strategy
   8. Take care in using open-source software
   9. Only litigate IP disputes out of principle in rare cases
   10. Be careful in hiring new employees