For any start-up, it is challenging to compete with the existing players in the same field. The best way to fight competition is innovation. The invention can be your creativity in the form of a new product, process, design, advertisement, brand, logo, etc. This innovation is your Intellectual Property. Law protects it in the same manner as it protects physical Property.
For a start-up, this Intellectual Property is an asset that provides a level playing field with existing business houses. Let’s understand how.
Table of Contents
What is Intellectual Property?
Intellectual Property is a creation of intellect (the human mind). The creative work is defined as a property if it complies with the law defining it.
The creation or innovation can be any invention which may be scientific or technical, literary or artistic work, graphical representation, design, etc. It is an invention that is used for economic or business activity. In some countries, Intellectual Property is known as Industrial Property.
Like any other property, Intellectual Property can be transferred, sold, or gifted.
What are Intellectual Property Rights?
The original creator, inventor, or author of the work or invention is given exclusive rights over his creation, and these rights are called Intellectual Property Rights. The original owner/creator gives consent, and only then can someone else use the Intellectual Property.
Intellectual Property Rights (IPR) are legal rights given to the inventor or creator to protect his invention or creation for a certain period.
Recommended reading: Arbitration Dispute Resolution in India
What are different kinds of Intellectual Properties?
The different kinds of Intellectual Properties are:
What is a Copyright?
The Copyright Act, 1957 defines Copyright in India. Copyright denotes the right to copy or reproduce the work in which the Copyright subsists. Copyright can be granted for any of the following:
- Literary work
- Dramatic work
- Musical work
- Artistic work
- Cinematography
- Sound Recordings
It protects expressive work such as books, articles, papers, poetry, paintings, photographs, images, sculptures, films, plays and scripts.
The author can reproduce, distribute, communicate or broadcast his work. However, it is his exclusive right to do the act himself or authorize someone else.
The published or unpublished work should be tangible. The Copyright does not protect mere ideas.
The importance of Copyright has increased in today’s time because with the technological advancements in printing, music, communication and entertainment, it has become easy to copy the work at a low cost and harm the financial interests of the original author of the work. Once the artists, designers, or composers of the original work get the Copyright, their work is protected, and they get the exclusive right to exploit their creation for monetary gain. The original authors may give license to others as permitted to deal with the work for consideration.
Recommended reading: Tax advisory & services in India
What is the term – Copyright?
The Copyright is granted for a period of the lifetime of the author plus seventy years. The purpose is to reward the author. Copyright registration is not mandatory in India. But if the work is registered, it creates evidence of ownership, and the owner can protect his creation and claim damages if there is infringement.
What is a Patent?
A patent is conferring a property right by an authority (government) to the inventor for his invention (product or process) for a certain period. During this time, no one can make, use or sell the owner’s invention. It is a monopoly given to the inventor to exploit his invention in the market. The owner has the right to sell his work to be used by others.
The most common patents are:
- Utility Patents
- Design Patents
- Plant Patents
In India, The Patents Act 1970 defines “patent” as an exclusive right granted to an inventor for inventing a new product or a new process for manufacturing the product. The inventor gets an exclusive right to manufacture the new product or manufacture it according to the new process.
The essential ingredients of a patent are novelty, usefulness, lack of obviousness and the sufficiency of description. Finally, the owner gets the patent registered in his name, and he can give a license to use his invention or sell the same to other people for a fixed amount.
Recommended reading: The procedure of set up of appropriate legal entity in India
What is the term of a Patent?
Patents are generally granted for 20 years and are renewable. Therefore, it is recommended to get the patent application drafted and registered through professional agents to ensure that the application form complies with the provisions of the Patent Act.
It is safe to disclose the invention to a professional.
What is a Trademark?
“Trademark” is clearly defined in the Trade Marks Act 1999 as a mark that has a graphical representation and distinguishes the goods and services of one company from another. It may include any shape, word, letter, signature, color, or combination of any of these.
It helps customers to get rid of any confusion.
The trademarks are classified as:
- Generic
- Descriptive
- Suggestive
- Arbitrary
- Invented
A trademark provides uniqueness to the product of a start-up. It helps to establish the identity of the start-up in the market. Customers start recognizing the new product by the trademark.
Recommended reading: Corporate law and NCLT
What is the term of a Trademark?
Trademark right is granted for ten years and can be renewed for another ten years by paying renewal fees.
What is an Industrial Design?
An industrial design means how a product appears after an industrial technique is applied for its production. It is something that makes a particular product appealing to the eyes. The right protects the appearance only. It includes a shape, color, pattern, configuration, or composition of colors or lines applied to a product. For qualifying as an Intellectual Property, the design must be a two-dimensional or three-dimensional figure made by an industrial process.
What is the term of Industrial Design?
The registration of a design under the Design Act protects the aesthetic aspect of the product. The protection lasts for ten years and can be extended for five years.
What is a Trade Secret?
A trade secret is intellectual Property and must be kept confidential. It is sensitive or secret business information that gives a trade or business an edge over a competitor. A start-up needs to protect its trade secret.
The trade secret can be any of these –
- Secrecy in the manufacturing process
- Secret technology
- A mixture of ingredients for a food product
How crucial are IPRs for Start-ups?
In the modern economy, businesses are more competitive than ever before. Start-ups often find it hard to compete with the big giants. However, one can stay ahead of others by creating something innovative, and this creation is intellectual Property. There are many benefits for start-ups when they protect their Intellectual Property and acquire Intellectual Property Rights. Some of the benefits are:
Must Read: LLC in Arizona
Level Playing Field
IPRs help the inventor protect his innovation for a certain period. A creator gets the exclusive right to utilize his invention or assign the right to another person. The exclusivity provides a level playing field to the start-up.
Recommended reading: Corporate Services Advisory
A guard against exploitation
The large companies have the resources to exploit the incumbent in the market. Also, they have the financial and other resources to take advantage of the invention and make unauthorized use of the same. In the absence of IPRs, the time and money spent by the start-ups in the research and development of intellectual property can go in vain. The businesses that do not protect their unique creations or innovations are more susceptible to exploitation than others. Therefore, the protection of IPR is a must for start-ups.
Recovery of Cost Incurred
To compete in the market, start-ups incur huge expenditures on creating innovation and bringing the same to the market in the form of final products or services for the consumers. If the intellectual property is protected, only the creator can exploit the invention commercially. Therefore, it helps the start-up/creator recover the expenses incurred in research and development.
Attracts Investment
When investors know that the start-up has protected its Intellectual Property, they are more confident about the new business. As a result, they come forward to invest in such start-ups as these become a resource for competing in the market.
Commercialization and Trade
With IPRs, start-ups become confident to operate in the market with their invention as they are protected. The possibility of theft or exploitation of the innovation reduces, as there is a fear of legal action for infringement. In addition, it supports the commercialization and trade of the products or services by the start-ups.
Thus, IPRs enhance the value of start-ups and raise their financial prospects.
Why are start-ups not willing to obtain IPRs?
Generally, start-ups are reluctant to get Intellectual Property Rights as it is not mandatory to get these rights for doing any business. However, there are other reasons also, like:
- IPRs are considered non-essential by many start-ups as they don’t anticipate anyone copying their innovations.
- No one feels the need for protection at the initial stage of business unless they face the challenges or threat of theft or exploitation due to the absence of IPRs.
- People are unaware of the benefits of the registration of Intellectual Property.
- The process of registration of IP is considered cumbersome and costly.
- The fee paid to the professionals for registration is regarded as an extra cost.
There is a need to educate people about the nature of protection which the IPRs grant to any business. In addition, there should be more discussions on the contribution of IPs in the protection of innovations for start-ups.
Why is Professional Assistance required?
The professionals working in the field of IPR provide various services which come in handy for any business, particularly for start-ups. They offer services like:
- Selection of the brand name, logo, etc., and verify that it does not exist already.
- Taking care of the legal requirements for completing the process of registration.
- To advise and suggest strategies for protecting Intellectual Property Rights.
- To assist in litigation for infringement.
- To draft applications for IPRs and reply to the objections, if any.
- To resolve disputes outside court through arbitration and negotiations.
Conclusion:
Start-ups must register their Intellectual Property as the advantages are enormous. IPR is a robust tool to protect investments, time, money, effort invested by the inventor/creator. Furthermore, it aids economic development by promoting healthy competition and encouraging industrial development and economic growth.
FAQs
The different kinds of Intellectual Properties are:
1. Copyright
2. Patents
3. Trademark
4. Industrial Design
5. Trade Secret
6. Geographical Indications
Intellectual Property Rights (IPR) are legal rights given to the inventor or creator to protect his invention or creation for a certain period.
Copyright denotes the right to copy or reproduce the work in which the Copyright subsists. However, it only protects the expression of an idea; it does not protect the underlying idea or concept.
A patent is conferring a property right by an authority (government) to the inventor for his invention (product or process) for a certain period. A patent is granted by a national patent office, or by a regional patent office that represents a group of countries.
A trade secret is sensitive or secret business information that gives a trade or business an edge over a competitor.
Any sign that is capable of distinguishing goods or services (including words, names, letters, numerals, drawings, pictures, shapes, colors, labels, or any combination of these) may be used as a trademark.
It is something that makes a particular product appealing to the eyes. The right protects the appearance only. It includes a shape, color, pattern, configuration, or composition of colors or lines applied to a product.
Intellectual Property is a creation of intellect (the human mind). The creation or innovation can be any invention which may be scientific or technical, literary or artistic work, graphical representation, design, etc.