Why do start-ups need to focus on intellectual property?

by Gargi Upadyay Educational Consultant

One of the traps that every start-up falls for is intellectual property laws. They consider IP late in the journey. Almost 80 per cent of the companies are stemming from intangible assets. It is something businesses need to consider as soon as they have business idea in place. Considering at a later stage will not only delay the growth of the company but also lead to all kind of difficulties. 

What is intellectual property? They are rights given to a person for the creation of their mind. It is an exclusive right given to the creator over the usage of their products for specific period. They are primarily divided into two kinds – 

Copyright and rights concerned with copyright which includes literary, art, and music. 

Industrial property is the protection of distinctive signs such as trademarks, geographical indications, and so forth. 

Now that you have learnt what is intellectual property rights, here is why start-ups need to add it to their business strategy early on – 

1) Beginning of the process: Many start-ups, as mentioned earlier, do not consider IP early on in their business strategy. These start-ups lose their brand and domain name because they have not registered their company name. Only by setting up the business and thinking through a name for them does not give the company the right to use trademarks and brand. If some other organisation has already used the mark with the registration body, it is not easy to claim that the mark belongs to your company. Worse, some companies infringe the registered trademark since they have not checked the registration before starting the trade. 

The costs associated with the damages include rebranding, signage and printing, reputational damage, and loss of reputational capital. 

2) High-value intangible assets: Intellectual property rights offers you unique rights that protect your products, brand name, services with patents, trademark, copyrights, and these have a value to it. The people-based assets of an organisation such as key-skills, know-how, the way your company does the business, all of these have value as well like relationship, branding, and reputation, which leads the way for commercialisation. A tangible value can be assigned to these assets. 

3) Avoid leaking IPR: Start-ups, whose niche is digital often are excited about launching an invention and bring it straight to the market. They forget to do due diligence in the process. There are also companies, big or small, who disclose their innovations and inventions while collaborating with other companies, maybe at an exhibition or conference. They do so before the patent gets filed. Such leakage means the company can later never control its IPR. Such chance words could lead to severe losses. 

4) Full overview: Some start-ups do apply for IP protection. But it does cover all the aspects such as legal, technical, and commercial angles. Then some scientists know where the concerned R&D and product competition lies. These individuals overlook the competition as well from the perspective of design, patent applications which have been filed in the marketplace and are not evident in the literature. These competing IP can be a real threat not only to success of the start-up but also to potential infringement and freedom for the company to make the product. 

5) International trade: When it comes to the protection of IPR, every country has a different process, and the process of obtaining IPR also differs. For instance, in Europe, there is a system that provides method of protection across the EU states. This way, IPR is streamlined in Europe. Also, different trade restraints apply in Europe, and it is crucial to consider competition law while planning your IP strategy. Not all countries recognise the importance of IP as they are done in Europe and the US. India, China, and Russia’s IP laws are different from those in the West. 

About Gargi Upadyay Junior   Educational Consultant

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Joined APSense since, August 27th, 2019, From Delhi, India.

Created on Dec 11th 2019 08:51. Viewed 60 times.


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