India: Intellectual Property Rights For Startups

Last Updated: 17 August 2016
Article by Intepat Team

An intellectual property rights strategy is an effective instrument that can facilitate a successful business. Intellectual Property Rights themselves are important for determining the success of a business. In this scenario, the significance of intellectual property rights for a startup cannot be over-emphasized. More often than not, startups are hotspots of innovation and emerging technologies. Streamlining the system of protection of their innovations will be an important value addition to their business strategy.

Intellectual Property Rights may be in the form of Patents, Trademarks, Design or Copyright. In whatever form, IPR can be capitalized upon to improve the finances as well as the credibility of a company in the economy. IPR is intangible property. This means that care must be taken to protect these invaluable assets at the inception of the business. Recognizing this, in India, the Government launched the Scheme for Facilitating Startups Intellectual Property Protection (SIPP). The object of this scheme is to nurture the creativity and innovation of startups, promote awareness and encourage the protection of IPR among startups.

The Starting Point:

After the creating a startup, what must be done insofar as IPR is concerned?

  1. Be conversant with all forms of IPR– An indispensable requirement, after the inception of a startup is being conversant with all forms of IPR, their registration process, requirements and the like. Below is a brief description of the different forms of IPR:

    1. Patent: Patents are arguably the most lucrative form of IPR. Getting an invention patented requires the innovation to be novel, have an inventive step and have industrial applicability. Registering a patent is necessary to tap on the benefits of getting a patent. The key is to ensure the complete and adequate protection of the core invention and then build around it to ensure commercial viability of the patent.
    2. Trademark: a Trademark's importance lies in the fact that it serves a source-identifier. For this reason, trademarks have to be unique and distinctive. It tells the consumers the source of the product/ service that they are availing. This enables the company to garner a goodwill and reputation in the market, based on of the quality of the products/ services offered by them. Registering a trademark gives the proprietor of the trademark the statutory right to sue an infringer and claim damages for the infringement.
    3. Industrial Design: Any unique shape, configuration or pattern, applied to an article may also be protected. A lot of consumers base their purchase decisions on the aesthetics of a product. Registering the design of an article protects the design from being used by any third party without the permission of the Registrant. Though a relatively lesser known form of IPR, it has a lot of capitalization potential.
    4. Copyright: Literary and artistic works may also be protected under a copyright. Copyright subsists in the creator of the work from the moment the work was created. This means that no formal registration is required for a copyright. However, registering a copyright is always better as it acts as a proof of ownership of the copyright. An important point in copyright is that copyright only protects the original expression of an idea. The idea itself does not have to be unique. The expression of the idea has to be unique.
  2. Do not infringe on existing IPR's: Before registering any form of IPR, it is important to ensure that it does not infringe on any subsisting IPR. This can be done by conducting patentability search, public search of trademarks or design and the like.
  3. Draw up an IPR strategy: Having an IPR strategy always enables a business to streamline the protection of their innovations. Adequate time and energy must be expelled in ensuring the IPR of a business are protected against potential infringers. This is especially required for a startup if it wants to increase its credibility in the economy. An IPR strategy is required to determine whether the intellectual property must be accorded protection. Not all intellectual property is worth protecting. For instance, some inventions may not be commercially viable. For such inventions, a defensive disclosure is better than spending money on getting a patent for the invention. A good IPR strategy will facilitate decision-making to this end.
  4. Be wary of public disclosure: Sometimes, startups may, in the event of describing their product, reveal too much information about the product. So much so, that the process behind the product becomes public knowledge. In such an eventuality the product cannot be patented as it would have become public knowledge. Hence, it is very important for startups to keep a check on the amount of information they reveal.
  5. Avail the benefits under SIPP: In India, the government, in a bid to encourage innovation and creativity among startups has accorded a lot of benefits to startups under the SIPP scheme. Startups must be sure to avail the benefits under the scheme. Please refer to this link to understand how to avail the benefits.

These are some of the points that startups must incorporate in their business strategy in order to protect the intangible IP rights. IPR's are as important as tangible property and can prove to be just as lucrative if protected and utilized in the right manner.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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