India: Dear Startups: Who Owns Your Idea? And Why You Should Be Serious About It

Last Updated: 6 November 2019
Article by Essenese Obhan and Chethan Kamath

All Startups start with an idea. An idea that solves an existing problem in a unique way. If your idea is truly unique, you could potentially be the owner of your intellectual Property (IP). This could be done by filing for a combination of patents, copyrights, and trademarks (IP) with respect to your idea.

What could happen if you don't own your idea?

  • A competitor could easily replicate your idea and profit from it. Worse, you could do nothing about it except compete.
  • In a first-to-file world of IP today, your competitor could claim the intellectual property for your idea as their own by filing for IP protection before you do and yes, could potentially sue you for using "their" idea.

Now let's assume for a minute that your unique idea is not so unique after all. So, you decide to overlook everything related to its IP and proceed to build/sell your idea unaware of the potential pitfalls of this mistake.

What could happen if you overlook your potential IP?

  • You might be wrong to assume that your idea is NOT unique. In doing so, you may have missed an opportunity to protect your idea.
  • You could be right about your idea not being unique, BUT there's also a very good chance someone else might have the ownership of that idea on the merit of having invented it first.

Now let's take this further and assume that you go on to be successful with your idea (without protecting your idea/IP) and your Startup is about to explode both nationally and internationally. You're also contemplating selling your company at its current valuation.

Right then, unexpectedly, you receive a long Cease-and-Desist letter from a reputed Law Firm stating that you're infringing on a lesser known competitor's IP and you no longer have the right to make, sell, or promote your own product or service.

What could happen in such a scenario?

  • Years of your hard work, your reputation, and your wealth could vanish in no time if the charges of infringement are proved right in the courts.
  • You'll be stuck in a long drawn legal battle and you'd have no legal documents to support that your idea is not infringing on competitor's IP.

So, it's apparent how important it is to legally own your idea/IP and not have a "let's-think-about-IP-later" attitude that many Startups tend to have.

Here's what you should do at various stages of your Startup to own your idea:

Idea Stage: Get your idea evaluated by a good law firm before you get started with your idea. Don't be in a haste to disclose or publish your idea or invention publicly on any website, journal, or other such platforms. Doing so, could potentially harm your chances of protecting your idea.

The Law Firm could help you:

  • Conduct a Prior Art Search to help you find out if your idea is indeed unique so you can rely on facts and not assumptions.
  • Inform you regarding other players/competitors who might already own IP rights over your idea on the merit of having invented it first.
  • Conduct a Freedom-To-Operate (FTO) search and let you evaluate if you can still make/sell you product/service in your targeted markets even if you don't own the IP.
  • File Patent/Trademarks/Copyright applications for your idea if it's found to be unique.

Production Stage

Once you've carefully evaluated your idea (with help from the law firm) and taken sufficient steps in protecting it (filing Patent/Trademarks/Copyright applications), you can take advantage of the privileges it affords, such as:

  • Marking your product or service with a "Patent Pending" tag (after a patent application has been filed). This establishes your competence, attracts investors, and wins customer confidence.
  • Marking your company or your marketing slogans with a "Registered Trademark" tag (once approved by the Trademark Authority). This helps build brand value and wins over customers.

Growth Stage

When you Startup begins to grow, it's wise to be subtly aware of any IP or ideas owned by your competitors too. This helps you stay ahead, distinguish yourself, and stay legally safe while you're still growing. Again, it would be wise to consult a good law firm to help you keep track of your competitors' IP as well as assist you in any litigation cases that may arise during the course of your growth.

Success Stage

Success in your Startup could potentially give you the necessary powers to legally take on competitors whom you've identified as infringing on your IP (with help from your law firm). This is very important in the business world to stop copycat Startups or businesses from benefitting off of your hard-earned success.

Hope this article was useful and helped you carefully consider the next steps for your Startup with respect to your idea and your IP (depending on what stage your Startup is).

Good luck and Happy responsible inventing.

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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