Why IP Protection is Important for Startups?

Why IP Protection is Important for Startups. Have you ever thought about it?  

When starting a business, you must consider many factors, from branding and target markets to financial flourishing. Apart from all these things, the security of your Intellectual Property (IP) is one of the crucial parts of the market challenges. Intellectual property is an intangible asset for any company, especially a startup. It creates a special bonding between the manufacturer, supplier, and customer. Due to the Lack of brand development, no product can attract the customer. Therefore a brand image is an internal part of a company, which is an essential part of the brand value. 

The patent is the most expensive and time-consuming process among all the intellectual property rights available in India, but it provides you unparalleled protection. 

When a startup moves for a patent for its invention, the company’s value rises, and the entire business perspective changes. 

After getting a patent, the value of the startup will increase. 

Therefore a startup is always eager to secure every corner of intellectual property rights directly or indirectly related to their invention or services. 

Hence, patentable concepts are essential to the success of a startup business.

Key Asset to the Success of Startups

Intellectual Property Rights have been prioritized more since it creates good value for the venture. IP can be a unique selling proposition (USP) product or service in today’s competitive and dynamic world. It helps to create a sustainable and defensible understanding of the startup. Creating a high entry barrier allows startups to grow faster than their competitors.

According to the  Startup Genome Project, startups who want to evaluate themselves in market stability must determine with other startups on many levels.

Assessing this way gives investors, consumers, and other stakeholders confidence in the startup. It is imperative not only to succeed but also to become a market leader in their domain. In engineering startups, where innovations are produced daily, IP assumes much greater importance. A tremendous brand value is attached to its valuation in the manufacturing and service industries.

Types of Intellectual Property (IP)

For idea Protection, there are four primary types of intellectual property (IP):

• Copyright – This legal term is used to describe the creator’s rights. The conditions for copyright registration are based on originality & creativity, and the duration of copyright protection is a lifetime of author+60 years. Copyright covers:
  • Literary work, including Software – Computer Compilations, Books, essays, and Programs.
  • Artistic work – Drawing, Painting, Logo, Map, Chart, Photographs, Work of Architecture.
  • Dramatic work – Screenplay, Drama.
  • Musical work – Musical Notations.
  • Sound Recording – Compact Disc.
  • Cinematography – Visual Recording, which includes sound recording.
• Patents -It grants the holder the right to decide how or if anyone can use its invention or not. A few Examples of patentable inventions are; 

1. A new drug to treat COVID-19
2. A new display system for mobile phones 
3. A new waste management system 
4. A unique suction system for vacuum cleaners 
5. A new image development system for digital cameras 
6. A new formulation of a medicinal composition 
7. An original method for water purification and other technical inventions can be recognized as patentable inventions.

The standard for registration depends on Novelty, Inventive Phase, Effective, and NP & patent protection period is 20 Years. The patent registration process involves:

• Idea or Concept
• Patentability Search (Optional)
• Drafting and filing Patent Application
• Publication of Patent Application
• Examination of Patent Application
• Response to Examination Report
• Patent Grant or Rejection
• Maintenance 
• Trademarks – This symbol has the power to differentiate between a company’s name, goods, or services. To create a different identity, creators mostly use trademark registration to put their “unique mark” on their products/ services. It is essential to register a trademark because it protects businesses and consumers alike, making them a necessary part of running a successful business. For example, California-based PayPal has filed a notice of opposition against Paytm in the Indian trademark registry for using a logo like its own. Paytm’s logo will likely confuse the public as it has a two-tone blue color scheme similar to that of PayPal.

Trademarks must be unique and distinctive. They cover devices, brands, headings, labels, names, signatures, words, letters, numerals, shapes of goods, packaging, or color combinations. A weak trademark is not distinctive, mainly when the products and services have not correctly described. It is confusingly similar to other brands. On the other hand, a definite trademark is short, memorable, and straightforward. It is timeless, consistent, and instantly recognizable. A good logo is versatile, allowing you to extend into different jurisdictions and product or service lines.

Trademark registration criteria are based on their uniqueness and distinctiveness & the duration of trademark protection is till you wish (renewal every ten years).

For further information about Trademark Registration, Click here.

• Trade Secrets – Broadly speaking, any private market information that gives a competitive advantage to an organization can be considered a trade secret. Trade secrets can be from the industrial, manufacturing, and commercial sectors.

Government Schemes & Preferences for Start-ups & MSMEs

The Indian government has developed many startup kits and funds to empower startups over the past 18 months. The GOI has given several exemptions in the IP protection fees for registered startups under the Startup India scheme of DIPP. For patent protection, the charges for startups are brought down by 80%; for trademarks, the fee reduction is 50%. Further, a startup can avail of an expedited examination facility at the Patent Office, wherein the patent application can be disposed of within 12-18 months from the filing date. Hence, IP protection is not as costly for a startup as for non-startup companies. What is most important to Indian Startups is that they should focus on creating and identifying IP while working towards innovation and protection to excel in their respective businesses.

Here is a list of startup schemes launched by the Indian government under different ministries and headed by various departments.

1. Start-up India Initiative and Make in India
2. Expedited Patent Examination (Available for Startups only)
3. Discounted Filing Fee (80% discount to startups)
4. Start-ups Intellectual Property Protection (SIPP)
5. Support for International Patent Protection in Electronics & IT (SIP-EIT)
6. Schemes by M/o MSMEs
7. Accelerating Growth of New India’s Innovations (AGNIi)
8. Cell for IPR Promotion and Management (CIPAM)

Why IP specialists and legal advisors are required

Protecting, growing, and keeping startups up to date is necessary. That is why it takes IP experts and legal advisors to plan and use IPRs for the business’s 360o benefit. Here’s why they are needed:

1. To Identify Types of Intellectual Protection.
   1. What type (s) of protection is suitable?
   2. Not every idea is patentable/registrable.
2. Multiple IP protection for single work
3. Drafting applications and taking care of prosecution
4. Requires professional and legal expertise to draft, file & prosecute
5. Timing and Territory
   1. When to file and where to submit your application
   2. Applicable laws & rules are territorial.

An efficient IP ecosystem has built on four pillars: Origin, Portfolio Building, Litigation Licensing, and Monetization Revenue Generation. The expert roadmap helps gain insight into the patents filed in the product segment/country of interest. These help tremendously identify and use relevant patents (and probably the related products, if any) in the public domain by being either off-patented or having no equivalence in a country of interest. Therefore, informative studies help avoid needless research and development that has already been done.

We at lawmitra are always ready to help you to register your intellectual properties.

Expedited Patent Examination

The Entities who Registered as startups can also apply for an expedited patent filing for faster disposal of their patent applications.

Discounted Filing Fee

Startups and MSMEs are also eligible for a discounted patent and trademark examination filing fee.

These programs and schemes aim to facilitate and support startups to establish awareness of IPR-related issues and, more specifically, to educate them about the value and economic benefits.

For startup and their growth, the following are the benefits given by the government to entrepreneurs.

1. The simplified and easy registration process with apps and websites
2. Low-cost IPR Services
3. Easy access to Funds through venture capital
4. Tax exemptions
5. Online tenders
6. Research & Development facilities
7. No time-consuming compliances
8. Tax savings for investors
9. Option to choose enablers of the startup ecosystem
10. Easy exit – A startup can close its business within 90 days from the date of application or wind up in times of crisis.

Conclusion:

IP-related issues shouldn’t be wiped aside in the nascent stages of a business. Developing a careful and intelligent IP strategy early on is crucial. Because of its long-term economic benefits, startups and well-organized companies cannot (and should not) neglect the importance of IP. To avoid disputes with IP resources, startups need to secure their technologies and lay the foundation for their future success. IPR strengthens the integrity of startups in the long run and generates more opportunities to reinvent and redefine