A guide to intellectual property protection for startups
Defining an IP strategy will enable nascent companies to prepare effectively for their future growth. Colombe Dougnac from Novagraaf’s SME and Startup team explains where to start.
The different intellectual property rights provide wide-ranging benefits and opportunities for emerging companies; especially those that are looking to establish themselves in innovative sectors, gain market share or attract investors.
For startups, as with other businesses, patent, design and trademark rights represent vital development tools that promote investor confidence, generate income and enable competitive advantage. The value that intangible assets will provide in the mid to long term will largely offset the cost of acquiring them in the first place, so long as they are maintained, protected and defended.
Intellectual property protection for startups: Where to start
IP law protects and positively sanctions the inventive, human and financial efforts of a company. Due to their unique contribution to innovation, such laws are particularly relevant for startups.
Here are six fundamental steps to follow when considering intellectual property protection for startups:
- 1. Identify added value
The first step is to identify what can be protected. For example, a brand name, a logo, a technique, a site, an application, a product, packaging, a concept, music, a database, software, code source and so on.
The law has not defined an exhaustive list of elements that can be protected by IP rights. This is all the better insofar as this leaves room for the protection of new technologies, subject to meeting the required conditions.
- 2. Check freedom to operate
Conflict checks are an essential prerequisite before any market launch. Through prior art (patents) and (trademark) availability searches, you can facilitate a smooth launch, and better understand how to position yourself, the competitor landscape and how to react.
These checks are essential in the competitive sectors targeted by startups, as they make it possible to identify the existing rights of possible future competitors in an identical or similar sector.
In many cases, it is advised to work with a third-party specialist to run these types of searches. The main registries (such as the European IP Office or EUIPO) do not conduct such checks when examining trademark applications for example.
- 3. Ensure ownership of your creations
Startups must take care to protect their rights, particularly at the early stages of creation when many stakeholders will often participate in the development of a product or message. Businesses are often surprised to discover that the assets created on their behalf – by a marketing agency, intern, graphic designer, developer or freelancer – do not automatically belong to them.
Companies must formalise the transfer of ownership via contracts, transfer clauses or IP assignments, both for external suppliers and employees.
- 4. Protect your assets
If the assets of budding companies are to ever have value, they must be protected. When it comes to intellectual property protection for startups, numerous protection routes can be considered or combined depending on the strategy chosen and the objective sought.
The intellectual property protection for startups toolkit includes trademarks, designs, patents, copyright, domain names, the blockchain, trade secrets and know-how.
A key pitfall to avoid here is not protecting or depositing assets that reflect either the activities of interest or the territories of exploitation or obtaining protections unnecessarily.
The second important pitfall to avoid is not waiting too long to obtain protection... If a third party has already registered the sign as a trademark or an invention has previously been disclosed, the startup will face difficulties enforcing its rights.
- 5. Defend the monopoly
Here again, the main IP offices (such as EUIPO) do not monitor trademarks once a sign has been registered. One of the basic points in intellectual property protection for startups is that it is up to startups themselves to monitor their IP rights against potentially infringing use. Here, third-party services and tools, such as trademark watching and online brand protection, can provide vital support by enabling startups to identify and react quickly and effectively against infringement of their rights, whether accidental or intentional.
This monitoring is essential for protecting trademarks since the use of a brand by third parties without authorisation damages its value and dilutes its distinctiveness, as well as impacting a startup’s bottom line.
- 6. Comply with legal notices
When it comes to building their presence online, startups must also follow the usual rules and regulations. Mainly, this involves including the following information on websites:
- Legal/privacy notice
- General conditions of use for any site
- General conditions of sale for e-commerce sites
- GDPR for the management of third-party personal data.
Startups whose business plan focuses specifically on harnessing data should be particularly vigilant about their GDPR compliance.
Intellectual property protection for startups: Why strategy is key
Any strategy focused on obtaining intellectual property protection for startups must be adapted to the budget of each startup, as well as proportionate to its development, projects and future goals. An IP strategy is never fixed; it must evolve to support these emerging companies as they evolve and reflect their specific environment.
It is because startups are particularly concerned about innovating in or disrupting a new market that their business plan must be agile and subject to change. Given this need for flexibility, it is all the more important for emerging companies to define an IP strategy.
For more insights about intellectual property protection for startups, read our article ‘Capturing value: IP as a driver for investment’.
Colombe Dougnac is a Trademark and Design Attorney at Novagraaf in Bordeaux and a member of Novagraaf’s SME & Startup Department.