Startups, do you know your Intellectual Property rights?

This article is a first in the series of articles on IP rights for startups...

You have tested your product, researched the market, but are you really ready to launch you product? Are your Intellectual Property Rights secured? Some Intellectual property rights, if not secured at the right time may be lost forever. Intellectual property is a business asset which has commercial value that many startups possess but fail to realize the importance of it. This could be due to the sheer lack of knowledge in the field of IP. Intellectual property rights protect several aspects of a business and each type of IP carries its own advantages. This table gives a brief description of the different types of intellectual property that are significant for start-up companies.

There are several examples that show how intellectual property has played a crucial role in some businesses. The recent Google’s acquisition of Nest Labs was majorly based on Nest Lab’s patent portfolio. Many speculate that Google’s interest towards Nest Labs’ patents in the home automation technology and related technology is what sealed the deal!

A startup’s negligence in securing its intellectual property could end up as an expensive lesson in the long run. Failure to secure inventions has also led to losses in certain cases, for example, in the case of Xerox PARC. Their inventions with respect to computer mouse and graphic user interface was not patented and therefore other companies such as Logitech and Apple Computer Inc. basically built their companies based on these innovative technologies, with no royalty payments to Xerox.

Here is an interesting scenario where a very well known mark ‘Gmail’, Google’s email portal was barred from use in Germany since the launch in 2005 until April 2014. It turns out that German entrepreneur Daniel Giersch, had already registered the ‘G-mail’ trademark (short for Giersch mail) in Germany in 2000. This was much before Google had even introduced its email portal Gmail. So for this reason, instead of ‘Gmail,’ German Internet users who used Gmail were required to go to googlemail.com. But recently, Google settled its dispute with Giersch, and the gmail.de domain is now transferred to Google. Improper brand selection and protection policies may turn out to be quite costly and restrictive.

Irrespective of the technical field of business there is a scope to protect your intellectual property. Despite the company size, it is essential for any growing company to have an effective IP management strategy. These IP rights will help establish a portfolio of intangible assets of the company which may be used to generate revenues in the long run; in the form of licensing, valuation of the business in a merger scenario, IP transfers, etc. These rights can also be used to create legal barriers to competition.

Any startup that is dedicated towards the growth and success of their company should ensure that the right steps are taken to develop the assets of their company, and not potentially lose them. One of the first steps with respect to IP would be to carry out an intellectual property inventory of the company. Another crucial step would be to educate everyone in the company with the basic knowledge and importance of Intellectual property in your business.

Next week we will get back to you with glimpses of another important checkpoint before moving into the market, i.e., activities required to ensure avoidance of infringing the Intellectual Property Rights of others.

About the authors:

Gaurav Singhal is the Director and Principal IP Attorney at Patracode Services Pvt Ltd. He is a B. Tech in Computer Science, LLB from IIT-Kharagpur and Masters in Business Laws from National Laws School of India University, Bangalore. Gaurav has been working in the IPR field since many years and has been the Strategic IP Counsel at Siemens India, headed Intellectual Property Department of a Singaporean firm, and is also a practicing Patent Agent at the Indian Patent Office. This post has been co-authored with Ananya Dhuddu who works as an Intellectual Property Analyst at Patracode.