Jun 26,2020 | 10 min read

Five Basic Forms of Intellectual Property Every Startup Should Know About

And Why IP Determines the Success of Your Startup by Nishant Nigam

Startups are able to displace incumbents in a market where the incumbents have the upper-hand in almost every other aspect: experience, visibility, existing market share, stable consumer base, to say the least. How is this possible? Startups identify gaps in the existing model and find a more convenient or innovative way to give the people what they didn’t even realise they wanted while incumbent companies try to cater to customers’ needs in the safest possible manner. One of the defining attributes of startups these days is that they are either disruptors (breaking out of existing strategies) or builders (building innovatively upon existing strategies) in an otherwise conventional market.  


Enter: Intellectual Property Rights Protection.
Most startups are driven by technology and software. If this technology isn’t patented, competitors are likely to steal it. It is by means of patenting their innovations and ideas and protecting their designs and trademarks that startups are able to gain a level playing field with larger corporations that have been around for much longer. As a startup, there are five basic forms of IP that you need to know about:

Patents: Patents grand you a monopoly over your innovation or invention The following form a broad categorisation of what can be patented:
-Art, process, method or manner of manufacture;
-Machine, apparatus or another article;
-A substance produced by a manufacture, and includes any new and useful improvement of any of them, and an alleged invention;

To understand the complexities involved in the definitions of various terms used here and see if your idea can be patented, the best recourse is to hire a legal consultant.

  1. Trademarks: A Trademark must serve to distinguish the startup and its product from that of its competitors. Any mark that is used in the course of trade or business for this purpose qualifies as a Trademark. It’s a part of your brand management.

  2. Copyrights: While ideas are not protected by copyright, their expression is. Copyright includes a wide range of expression of ideas. But with respect to startups, it’s relevant to know that computer programmes, tables, compilations and computer databases will be protected under Copyright Laws.

  1. Industrial Designs: Design means only the features of shape, configuration patterns, or ornament applied to any article. Designs which are purely functional and have no aesthetic implications generally cannot be protected as a design.

  1. Trade Secrets: Trade secrets include any confidential business information which gives its holder a competitive advantage over other market players. Trade secrets include manufacturing or industrial secrets and commercial secrets, formula, practice, process, design, instrument, pattern, commercial method, or compilation of information which is not generally known or reasonably ascertainable by others. Unauthorised use of the same is considered unfair practice. Protecting your intellectual property is a long-term and sustainable investment with high returns; a gift that keeps on giving. Here are a few ways in which IP Protection goes a long way in giving your startup the upper hand:

Attracts More Investors: Patents and trademarks form an important part of your startup’s asset pool. Consequently, the valuation of your business increases. So investors are likely to acquire or invest in startups which possess intellectual property assets.

Exclusive Access: Obtaining a patent for your innovation, provided it fits the criteria for the grant of a patent, means that your competitors are absolutely excluded from using your technology for the lifetime of the patent, within that territory. This is a clear advantage. Trademarks ensure that your brand cannot be utilised by maligning third parties

Awareness About Similar Ideas Across the Globe: Precluding competitors from use of your innovation or brand is not the only aim of obtaining IP registration and protection. It also brings to your attention similar or identical patents, trademarks, designs or other such IP that may be registered elsewhere.

Cost of Obtaining IP Protection is Lesser Than Potential Cost of Unprotected IP: The only logical deterrent to obtaining IP protection would be the costs involved. Remember that it is better to pay a small price for protecting your ideas and innovations now than to lose big in the long run. Intellectual Property Protection creates a higher entry barrier. After you have successfully built your own brand and a strong consumer base, you can consider licensing your IP to other businesses as an additional stream of revenue.

Dinesh Jotwani. (2019, May 12). Why Intellectual Property Protection Is Crucial For Your Startup. Retrieved from https://inc42.com/resources/intellectual-property-protection-crucial-startups/

Vinay Vaish. (2016, January 9). Intellectual Property Rights (IPR) For Startups. Retrieved from https://www.mondaq.com/india/trademark/456442/intellectual-property-rights-ipr-for-startups

Vikram Upadhyaya. (2015, December 29). Why Intellectual Property Is Critical For Startups. Retrieved from https://www.entrepreneur.com/article/254442

Risky Business: The Five Biggest IP Mistakes Startups Make. (2018, August). Retrieved from https://www.wipo.int/wipo_magazine/en/2018/04/article_0007.html

Kasdan, M. (2018, September 25). What Startups Need To Know About Intellectual Property. https://www.natlawreview.com/article/what-start-ups-need-to-know-about-intellectual-property

Chizoba Morah. (2020, April 30). Patent Valuation Methods. Retrieved from https://www.investopedia.com/articles/fundamental-analysis/09/valuing-patent.asp

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Nishant Nigam

Highly experienced in the field of commercial litigation and arbitration. With a specialised LL.M. degree in the field of International Arbitration and Litigation has had exposure in the said field not only in India but also in the European market while handling Arbitrations pertaining to international commercial transactions. He is a member of the Chartered Institute of Arbitrators (CIArb.). Also specialises in labour and employment laws and intellectual property laws.