Intellectual Property Rights, Critical For The Success Of Startups

When entrepreneurs begin on their unique business idea, they do not doubt that their idea would be a commercial success in the market; their main focus is initially to start giving the appearance to the venture. In the middle of so many different things that go into starting and building a startup from a single idea, the word “Intellectual Property” (IP) is generally not just their main focus. And even if they think about IP protection, it seems to be too costly for a startup to work on.

Entrepreneurs must understand that evaluating IP implications is not just about protecting the work you are doing but, it is also very essential to check whether someone else has an IP for the same work. Very often, there could be people in different parts of the world working on the same idea

Intellectual Property Rights prevent opponents, bigger establishments/ companies from stealing/copying indications, inventions, brand names/trademarks, which in twist furnishes start-ups to broaden and make profits with exclusivity for a set period. Further, there is invariably a high probability of delivering enthusiasm to investors, clients, and other stakeholders, for start-ups who have patented their core creations and registered their brand name/trademark; since it indicates high standards and “viability study” performed by the Start-ups.

Start-ups, due to their insufficient resources, cannot opt to avail themselves of the comprehensive IPR protection. Therefore, the start-ups, depending on their industries and enterprise, must analyze and prioritize their Intellectual Property Rights, wherein such IP Rights play a significant role and sometimes happen to be the only accessible investments with a start-up. Failure to perform the same might create an obstacle to the smooth functioning of the enterprise, particularly between the founders of the Start-up, promoters, negotiations with the existing and future investors, or while quitting the business.

In today’s competitive and fast-growing environment, IP can be a Unique Selling Proposition (USP) of the goods or services which will help to create a sustainable and protective differentiator for the company.

Owning an IP, creates a high obstruction, thereby helping you to develop your venture faster and more efficiently. IP always has a high weight for the investors. Therefore, it creates a good reputation for your venture. Moreover, IP identifies as the main ingredient for startups around the world to get a competitive benefit in the market.

There are three significant ways in which a startup can protect its intellectual property:

1) Patents
2) Trademarks
3) Copyrights 

Intellectual property is an asset for its creator and has a commercial value with it. If IP is correctly and strategically conserved then it can take the valuation of a company to a completely another level.

IPR yields you the following advantages

  1. Can sell or license for creating an additional revenue stream.
  2. Offering distinctive products/services to your customers.
  3. It can become an essential part of your marketing or branding (Exclusivity).
  4. Intellectual properties are assets that you can use as security against loans.
  5. Start-ups can legally protect your Intellectual property in the following manners.

1. Copyrights

Certain protection is automatically granted to the author for their original, creative or intellectual work. Know more about copyright registration in India to ensure taking correct steps in the right direction.

Works include; Books, lectures, dramatic and musical works, cinematography, drawings, paintings, architecture, sculpture, photographs, illustrations, maps, plans sketches etc.

Rights: To distribute copies of the work to the public by sale or other transfer of ownership, or by rental, lease, or lending and to perform the work publicly in person or through an audio transmission.

Validity: It is not mandatory to register but is highly recommended. The validity of copyright lasts the lifetime of the author and even till the 60 years after his/her death. The owner is given protection in most countries.

2. Trademarks

Trademark: At first, register a trademark online as this acts as a brand element distinguishing your goods and services from those of your competitors and other traders in the market. It creates a distinct identity for your company and thereby securing a brand from being counterfeited.

Marks: Wordmark, a logo mark or a slogan, shapes, and unconventional marks like colours, sounds, gestures, animation, holograms etc. can be registered under trademark.

Rights: Gives the exclusive right to use the mark and prevent anyone from using it without permission. The owner also enjoys the right to license, assign and sell the mark in return for compensation.

Validity: 10 years which can be made perpetual, as along as renewed every 10 years. Should be applied separately in every country in which protection is required and has a market.

3. Patents

Patents come to play when you are looking to protect a new invention that is original and can be used to simplify the lives of people.

Condition: A patent requires an idea to be novel and unique. The industrial procedures can be patented especially if a non-obvious step is introduced in it.

Rights: It gives an exclusive authority over the patented invention, the right to exclude others and exploit the patent and earn from it.                   

Validity: Patent protection is a territorial right and therefore it is effective only within the territory of India (or the country where applied). Separate patents are required to be filed for each country where protection is required. A patent is valid for 20 years after which it goes into the public domain.

It is best to consider IP as something that offers an additive advantage that is beyond the concept of making money or even branding for that matter. It is something with which the business esteem is connected. Ensuring intellectual property is also a common norm since it is an asset. One of the quintessential business components is to have IP protection a part of budgeting and business plans as well.

Protecting Intellectual Property against any sort of infringement by others.

  1. You can defend it in a court of law to claim your sole right to it.
  2. Can legally stop others to use, making, selling or importing without your agreement.
  1. You can earn royalties by licensing it or making money selling it.
  2. Use your trademark for strategic alliances.

Start-up Valuation can be made based on IP Rights

New companies don’t have monstrous product stocks or workforces, to begin with. Subsequently, a large portion of the estimation of a start-up, for the most part, gets from their IP rights. It has been assessed that on the normal, over 80% of the estimation of a new business depends on their IP portfolio. Protecting your IPR is the best and the only way that helps you to create a sustainable and defensible differentiator in a highly competitive market.


Leave a Comment