Protecting Intellectual Property: 11 things startups should keep in mind
India is crucible for entrepreneurship and innovation. It’s the entrepreneurial ventures that drive real innovation and growth, thus encouraging creativity to introduce new products, solutions, and business models. The country is poised to leapfrog into an era of new ventures across industries on the back of growing aspirations and supportive policy makers.
It’s raining startups in every corner of the world and each firm is trying to establish an image in the minds of the consumers. While the new-age ventures focus on growth and profitability, there is also a need to protect the intellectual property assets owned by the entity. However, for these people having chosen to endure the entrepreneurial journey and pursue their dreams, the market is growing at a faster clip.
With rising competition, organizations are developing innovative strategies to develop more business and attract investments from numerous venture capitalists and private equity firms. The startups focus on upgrading their business models in a bid to cater to diverse needs of the consumer, thus contributing to the constantly evolving dynamic business environment. The current wave of startups has reached a scale where the game-changing players are battling it out for leadership slots. The startups face unique challenges but they have to think about succession planning regardless of any growth stage.
A patent is a form of intellectual property that refers to protection of an invention for a limited period of time, wherein the inventor can exclude others for making or selling a product or service. There are treaties and bodies for defining, protecting and enforcing intellectual property rights. The IP space is considered niche and nascent in India. Intellectual property is intangible and has to be protected through intellectual property rights such as copyrights, patents, trademarks.
A well defined intellectual property strategy should be in place to protect the intellectual property from potential infringers in the marketplace. Corporate bigwigs such as Google, Apple, and Microsoft spend billions of dollars in research and development and ensuring that the inventions are protected adequately. But, the big question is – How important is intellectual property protection for a startup?
The success of high profile Indian startups including the likes of Flipkart, Snapdeal, etc. which are relatively weak on making investments in intellectual property. Certainly, creating and maintaining a robust IP portfolio involves time and cost. It has been witnessed from the current market scenario that most of these startups are introducing novel solutions to serve their customer base and not focusing on getting their ideas/technology patented. But, every startup needs to plan and think for success and scale up rapidly.
A strong patent portfolio helps the innovators to protect their assets and ensure success in the long term. In order to survive in the fiercely competitive market, new-age startups should ensure that their IP portfolio is rich in innovation, diverse, and allow them to outdo the competitors.
Developing and protecting intellectual property can help startups gain competitive advantage and earn additional source of revenue through licensing. The new-age ventures have to develop intellectual property portfolio in order to attract investors, thus building credibility in the market. It is pivotal to identify the IP assets owned by the company and benefits in obtaining for securing such protection over time.
Some of the steps that startups should embrace to protect their intellectual property:
1.Startups should invest time and resources to get their ideas/solutions patented with PTO in order to exclude others from using patented invention. As patents are country-specific and limited to a particular territory, they should first apply for the patent in the domestic market and then build a strategy for to apply for patent in international markets.
2.They should invest time in developing intellectual property and educating themselves for the need to understand the basics of intellectual property including trademarks, designs, patents, and trade secrets.
3.Minimize the cost and work by outsourcing patent-related task to attorney who specializes in intellectual property and will assist in filing patent application in single/multiple jurisdictions. The attorney can help in developing the patent document describing the method and use of the invention and also incorporating the claims which helps the inventor to obtain a patent.
4.Identify potential infringers of the particular technology and earn revenues through licensing and cross-licensing negotiations.
5.Enter into well-drafted non-disclosure agreements (NDAs) while disclosing the invention to others.
6.Ensure the employee agreements, licenses, technology transfer agreements are in place to protect critical information leak/breaches.
7.Assess international patents if the key competitors exist beyond the respective country. For instance, a patent granted in India will not protect the organization in countries such as Europe, the US, China etc.
8.Conduct a Freedom-to-operate (FTO) search in order to launch a particular product and service in other country.
9.Perform patentability searches in order to invalidate the patent in the marketplace.
10.The company should conduct landscape search in order to locate potential competitors and their activities. They are crucial to determine technological advancements for In-licensing and Out-licensing in the respective filed of technology.
11.Think about the future and devise patent strategy in line with business goals and the need to be legally protected.
Many organizations fail to understand the need to protect their intellectual property assets and the value offered by them at the time of mergers and acquisitions. Thus, not taking an appropriate action can pose a threat to the success of the organization in the future. Intellectual property plays a vital role in protecting and monetizing innovation. In this competitive world, it is critical for organizations to understand intellectual property and stay abreast of the current technologies, innovation, knowhow, and thus, need to revisit their existing IP strategy.