IPR Protections: Before and After Launching the Startup

30 Mar 2024  Read 1276 Views

Nike, the famous footwear brand, lost a legal case against the small clothing business for its iconic slogan of 1988, "Just Do It". How? In 1980, a small business in the U.S. trademarked this phrase for use in clothing. Nike did nothing to protect its own intellectual property rights, ultimately resulting in Nike losing its trademark in the U.S.

This case is a reminder for all businesses to be careful and take action to keep their intellectual property safe, even if it's famous or well-known.

Intellectual Property protections are important in safeguarding business innovations, branding, and creative works. In this blog, you will learn what IPR protections are available for pre and post-launching a startup/ business.

Importance of IP Protection

Before we talk about how an entrepreneur can protect intellectual property before and after starting a startup, let's first understand why IP protection is so important for any business or startup.

  • Attract InvestorsIf someone has invented a unique design of a multi-functional knife with a strong patent, investors are likelier to invest in that company. This is because they know other companies can't copy and sell products easily.
  • Provides Competitive Edge: If a new product is patented, competitors can't make or sell it without permission. This advantage boosts sales and profits in the market.
  • Increase Value Business: For example, owning a software company with a popular app protected by strong patents. If the business is sold, having these patents can greatly raise its worth. This is because the patents grant the buyer exclusive rights to make and sell the app, making it more valuable.
  • Defends Against Lawsuit: Lakmé Cosmetics can take legal action against companies selling copied products using its trademarked logo.
  • Ability to License IP to others: A popular clothing brand trademarks its logo and designs. The brand can authorise other companies to produce and sell merchandise featuring their trademarked designs through licensing agreements, expanding brand visibility and generating licensing revenue.

Types of Intellectual Property Rights (IPR) for Startups

Knowing about different types of Intellectual Property Rights is very important for startups wanting to succeed in business.

Types of Intellectual Property Rights (IPR) for Startups

Read to know what are ways to commercialise IPR from here!

Pre-Launch Intellectual Property Rights for Startup

Before starting any startup or business, securing IP for business innovation, branding, and creative work is important. Here are key IPR protections available to startups:

  1. Logo/Name/ Slogan Registration 
  • Trademark Protection: Startups can protect the identity of the brand's name, logo, and product by getting them trademarked in accordance with the Trademark Act 1999 and Trade Marks Rules 2002.
  • Trademark Benefit: This step prevents others from using similar marks that could confuse customers.
  • Trademark Classes: In India, trademarks are registered using the NICE Classification system, which categorises goods and services into 45 different classes. Classes 1 to 34 cover goods, while classes 35 to 45 cover services.
  • Example- If a brand wants to use a trademark only on clothes and shoes, it will pick Class 25. But if they plan to sell other brands' products in a store, they'd go for Class 35 (advertising, business administration, business management, office tasks) and specify "retail services for clothing."
  1. Domain Protection
  • Register Domain Name: The first step is registering the desired domain name with a domain-accredited registrar like ABTA, Adodis Technologies Pvt. Ltd., etc. 
  • Trademark Domain Name: In India, domain names like com, .in, or .co do not have legal protection. It must be registered under the Trade Marks Act and its Rules.
  • Rights: Once a domain name is registered as a trademark under the Trademarks Act, the owner gains the same rights and authority as registered trademark owners, like the right to sue for infringement or passing off.
  • Domain Name Dispute Resolution: Businesses can utilise mechanisms such as the Uniform Domain Name Dispute Resolution Policy (UDRP) or the INDRP (Indian Domain Name Dispute Resolution Policy) to resolve conflicts.
  1. Copyright Protection 
  • Register Work: Consider copyright protection if a business involves creative works such as software, designs, or content. These creative works are copyrighted once fixed in a tangible form like writing or making a digital file.
  • Rights under Copyright Protection: It grants exclusive rights to reproduce, distribute, and display your work, guarding against unauthorised use.
  • Use Contracts & Licenses: Use NDAs with employees, contractors, and partners involved in developing pre-launch business to ensure they do not disclose or misuse confidential information, including copyrighted materials.
  • Example: Include a copyright notice on the business website and promotional materials to inform others about your content ownership. For example, "Copyright © [Your Business Name] [Year]. All rights reserved."
  1. Patent Applications 

  • Who can have a Patent: A tech startup developing a new software algorithm, a biotech company working on a novel drug formulation, or a manufacturing company creating a unique manufacturing process can file for a patent to protect its innovation from being copied by competitors.
  • Conduct a Patent Search: Before applying for a patent, conduct a thorough search to ensure that your invention is novel and not already patented by someone else. One can use online databases like the Indian Patent Office's website. 
  • Rights: They provide exclusive rights to inventions, preventing competitors from copying or using them without permission.
  • Benefit: By obtaining patent protection for their innovations, pre-launch businesses can create a competitive advantage, attract investors, and establish a strong market presence once they are ready to launch their products or services.

Know about the upcoming challenges in IPR and the way forward from here!

Post-Launch Strategies for Protecting IPR

Once your business is up and running, proactive measures are necessary to maintain and enforce the business's IP.

  1. Regular Audits

Conduct periodic audits to check the status of the intellectual property portfolio. If any potential violations are found, take immediate action against it.

  1. Licensing Agreements

Consider licensing intellectual property to generate additional income. Ensure strong agreements that outline usage rights, royalties, and enforcement mechanisms to protect your interests.

  1. Contractual Agreements

Use contracts such as non-compete agreements, non-disclosure agreements (NDAs), and licensing agreements to formalise relationships with employees, contractors, suppliers, and partners, ensuring they respect and protect the business's IP rights.

  1. Cease and Desist letter

If a violation of IP rights is discovered, consider sending a cease and desist notice to the infringing party. This legal document demands that the infringer stop using your IP immediately and may also request compensation for damages. 

  1. Review and Update IP Protections

This may include renewing trademarks, updating patent filings, and implementing new security measures for trade secrets.

  1. Enforcement Actions

Be careful against IPR infringements and take swift legal action when necessary. This may involve sending cease-and-desist letters, pursuing litigation, or seeking alternative dispute-resolution methods.

Conclusion

In a nutshell, protecting ideas and creations with IPR before and after starting a startup is not only a legal necessity but also important for the business strategy. When intellectual property is secured and proactive steps are taken, new ideas can be kept safe, a good reputation for the brand can be created, and competitiveness can be maintained in today's business world.

About the Author: Anirudh Nikhare | 29 Post(s)

Anirudh did his Bachelor's in Law and has practical experience in IPR, Contracts, and Corporate. He is your go-to legal content writer turning head-scratching legal topics into easy-to-understand gems of wisdom. Through his blog, he aims to empower readers with knowledge, making legal concepts digestible and applicable to everyday life.

Liked What You Just Read? Share this Post:

Finology Blog / Legal / IPR Protections: Before and After Launching the Startup

Wanna Share your Views on this? Comment here: