Some Intellectual Property Considerations: Startups and SMEs

Undoubtedly when you are deep in concentration thinking about bringing your ideas to market or else looking for ways to stabilise and grow your business, intellectual property is not going to be high on your list of priorities. Maybe it deserves some early attention though. Intellectual Property (IP) can stop you doing business, it can be a barrier not a licence to practice an idea. Obviously, everything is determined by need and cost but some knowledge of this area will help you to make decisions as to what your business needs as opposed to what would be desirable.

IP may not guarantee commercial success however, it may allow your idea to be monetised. As an example, your IP could be licensed to allow others to use it or it could be valued as an intangible asset and sold. It could stop potential competitors who intend to launch a similar product. It could protect you in case you infringe someone else’s IP.

Having control of your IP could make investment more attractive, help you sell your business or shares in it, do deals or restrict competition.

Many of you will want a logo or design and so you should be thinking about IP.

Here are some important IP types.

Trademarks: generally, provide a badge of origin to protect your brand. This can be a logo or symbol or word that identifies your product from that of another competitor.

Designs: generally protect the appearance of a physical product or graphical user interface (GUI). By registering, you protect features that are visible and need to be new and individual. Unregistered design rights arise automatically but may only protect from direct copying which is hard to prove i.e. to prove you developed the design first.

Patents: generally provide a monopoly for a working technical invention such as a product process or computer programme. The invention must be new and not obvious to a skilled technician in the field.

Copyright: generally arises automatically and protects the expression of an idea. Typically, this will be artistic work but can include software source codes and GUI’s (above).

Database rights: apply if there has been a substantial investment in obtaining verifying or presenting the contents of the database. Protection lasts 15 years.

Trade Secrets: generally registered IP is published. You may prefer to keep your idea secret. As an example, to protect a manufacturing process or recipe. This requires control of colleagues, business partners, premises and IT equipment. Be aware that if you don’t register then someone else might also they might work out how your process works or the recipe by observation.

IP bullet points:

  • Periodically review your IP and decide how to best protect it.
  • Before registration avoid discussing your ideas except under a Non-Disclosure Agreement (NDA).
  • Keep up to date ownership records. Review any employment contracts as they should have appropriate clauses regarding ownership of any IP.
  • Create clarity of ownership whilst you are working with collaborators.

Be aware that ownership and registration of IP is not an automatic licence to work with the claimed idea. You might still be infringing another patent particularly if you are using your idea in conjunction with someone else’s. If unsure take advice or consider a Freedom To Operate opinion.

Alexander Business & Law Solutions

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