In a climate where everyone is looking for the next “big thing”, bringing a new product or service the market can be simultaneously daunting and exciting, and in the rush to translate idea to viable business model, intellectual property considerations are often overlooked. However, intellectual property (IP) rights form the basis of most tech companies so discounting them can be fatal. Procuring appropriate rights can not only set one business apart from the next, and prevent would-be competitors coming to market, but can often be a requirement for securing venture capital. Here are my top five considerations every tech start-up should consider
1. Keep Employed Work Separate from Your Idea
While working on your idea during a lunch break sounds like an effective use of spare time, think again. If you use your employer’s equipment (including the very act of being in your place of work) your employer will likely have at least some rights over your business.
Most employment contracts also stipulate that all intellectual property rights developed during the course of an individual’s employment that even remotely relate to the employer’s business are assigned to them. There may also be non-competition clauses which prevent the employee from establishing a similar business within a certain time-frame or geographical area, which usually subsist after the employment ends.
Read your employment contract carefully and know your rights. Use your own equipment and time to develop your idea, and remember to keep it completely separate from your employment. If in doubt, seek professional advice.
2. Think About Things Early
Far too often entities seek to register or enforce their IP rights when it is no longer possible to do so, which leaves them unable to grow their business, or in some cases they are forced to cease trading. Some registrable IP rights, such as design rights and patents, must have never been disclosed in order to obtain a granted right, so putting your idea into the public domain can create a barrier to registering your own right. Other rights, such as registered trade mark rights, can be obtained before you start using them so it is worth seeking registration early before third parties do the same.
In order to enforce unregistered rights, including copyright, unregistered design rights, and unregistered trade mark (passing off) rights, you will need to submit evidence to prove your rights. Ensure that you retain proof of authorship and ownership, copies of design and development documents, and all relevant dates so that you are able to not only enforce your own rights, but defend unwarranted actions against your activities if the need arises.
Maintaining some rights, such as registered and unregistered trade mark rights, require proof of use, so retaining proof of use, such as copies of advertising collateral and invoices, is essential from the outset.
3. Know Appropriate Forms of Protection
Many wrongly believe that the availability of a company name or a domain name proves that there are no conflicting third party rights, and often only seek to obtain this form of protection for themselves. While incorporating a company and registering a domain name are of course important steps to the launch of any business, they do not provide any form of protection in themselves.
It is not possible to protect an idea - only the expression of an idea. Patents protect inventions, design rights protect the visual appearance of goods, trade marks protect brands and copyright protects works such as text or music. Each right provides different protections against infringers, and each lasts for a different length of time. By knowing what type of right will protect each element of your business in advance you can ensure that you don’t miss out on valuable rights.
4. Retain All IP Rights
As noted, it’s not possible to protect an idea per se, and businesses often wrongly assume that all rights in their “idea” are retained by their business even when using contractors. Most common misconceptions are that copyright in a website or logo design automatically vest in the party who paid for the services, but this is incorrect and can lead to costly disputes. Wherever possible, have any contributors assign all IP rights created back to your business in writing. Most will charge more for the transfer of the rights but it is almost always worth the extra cost.
If you need to seek investment or collaborations in advance of filing rights, ensure that you have appropriate Non-Disclosure Agreements (NDAs) in place in advance. This can not only help in the registration of rights, but can also prevent third parties using your ideas to their advantage. If a third party is unwilling to sign an NDA, walk away – this shows that they are not taking your business or your rights seriously and are not the type of entity you should do business with.
5. Develop Your Own Strategy
Don’t leave it until a conflict arises to consider how you will manage your IP. The development of an appropriate strategy should be done as soon as you have your business concept, and should change on a regular basis.
Consider your protection strategies – whether you will seek registered protection or rely on unregistered rights, and in what circumstances. As all IP rights are territorial, remember to think about other countries, particularly with patent and design rights, which have novelty requirements.
Consider how you will enforce your rights. Unenforced rights can be lost, so enforcement is important and knowing the costs and implications of the same from the outset can help you to avoid nasty surprises later on. Knowing your competitors and their routes to market are vital to deciding how best to enforce.
Evaluate your rights and know what is most important for you to protect and retain. This will help inform how you want to protect your rights and how you want to enforce them.
Remember that all IP rights have a value and they must be nurtured in order to achieve their full potential. Don’t underestimate the value of your own IP rights as it could set your business apart from the crowd.
For more information on the topic, please get in touch.
It’s not possible to protect an idea per se, and businesses often wrongly assume that all rights in their “idea” are retained by their business even when using contractors.