Knowledge & News

IP Essentials for Start-Ups

12 September 2017

Intellectual Property (IP) is a barrier to market, not a licence to practice the idea. Realistically, it may not even guarantee commercial success…! However, IP may:

  • Allow your idea to be monetized. For example, IP may be licensed to generate a revenue stream, or may be valued as an intangible property asset to be sold for a one-off payment;
  • Act as a ‘sword’ against potential competitors intending to launch a similar product
  • Act as a ‘shield’ by allowing cross-licensing in case you infringe someone else’s IP. Otherwise you may need a licence – increasing costs – or risk infringement proceedings.

This means that IP can attract investment, help you to sell your business on or do deals, and can help to keep others out of the market. ‘First mover advantage’ is rarely adequate.

Some important IP types:

  • Trade Secrets registered IP is generally published, whereas you may prefer to keep your idea secret. For example, secrecy may prevent third parties discovering your manufacturing process or computer algorithm. However, this does require strict control of your working environment (colleagues, business partners, premises and IT equipment) and of the security of any computer code to be protected. Also, a third party may be able to work out how your invention works by observation, and someone else may register the idea independently.
  • Patents generally provide a monopoly for working a “technical invention”, eg, product, process or computer program. The invention must be new and non-obvious to a skilled technician in the field at the filing date.
  • Trademarks generally provide a “badge of origin” to protect your brand. For example, a trademarked word, symbol or logo can identify goods from one particular manufacturer
  • Designs generally protect the appearance of a physical product or graphical user interface (GUI). Registered designs protect features that are visible during normal use, and need to be new and have ‘individual character’. Unregistered design rights arise automatically buy may only prevent direct copying (hard to prove!) of the shape and configuration of a 3-D product
  • Copyright generally arises automatically and protects that “expression of an idea”. This typically means artistic works, but can also include software source code and GUIs.
  • Database rights apply if there has been a "substantial investment" in obtaining, verifying or presenting the contents of the database.  Protection lasts for 15 years from completion/first  publication.


Important messages

  • Hold invention-harvesting sessions to identify all of your IP and determine how best to protect it. Identify your most important, ‘platform’ IP and prioritise protecting this.
  • Public disclosure: before registration, don’t discuss your ideas except under a signed Non-Disclosure Agreement (NDA). This also preferably applies during the “priority period” (12 months for patents) after the filing date of your IP application.
    If there is a requirement to publish or exhibit, e.g., at an academic conference, register your IP first.
    For patents, a grace period for disclosure is available in a few countries such as (most notably) the US, but not in most countries including in Europe, China and Japan. There is also a grace period for some types of designs. In any case, never rely on a grace period, in case someone else registers a similar or identical idea in the meantime.
  • Keep up-to-date ownership records, to prove exactly who any IP belongs to. Ensure that employment contracts are created that vest the IP with the desired party, and obtain signed assignments from all designs, inventors and authors. Create clarity on ownership whilst collaborators are (still) collaborating – business relationships do sometimes change unpredictably. Be aware, too, that ownership can become unclear due to, e.g., university or sponsorship relationships, or where consultants or contractors are involved. For example, if you commission a work, the ownership will generally rest with the designer/inventor/author absent a written assignment.
    Also, keep any work carried out during any other employment separate from any personal ideas generated independently for your start-up company. The IP will probably belong to the other employer if carried during work or using their facilities.
  • Remember that ownership of registered IP such as a patent doesn’t give you the ‘right to work’ the claimed idea. You may still infringe another patent, particularly if you are using your idea in conjunction with someone else’s. If unsure, consider obtaining a ‘Freedom To Operate’ opinion.

Please feel free to contact Marks & Clerk LLP for further advice on protecting your innovations: cambridge@marks-clerk.com, tel. 01223 345520.

Authors

Esther Ford

Esther Ford Partner Cambridge (UK) Chartered (UK) and European Patent Attorney

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