The Start-up's Guide to Intellectual Property 


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Our message to you is simple  — prioritise your Intellectual property “IP” — it’s one of your most valuable business assets. It may not be top of your list when starting up, and we want to make it as simple as possible to firstly identify key elements you need to consider

IP refers to tangible expressions of concepts and ideas, inventions, original names and items that you have developed in relation to your business. There are a number of different types of IP and we have categorised these assets for you to let you see them in a different light, so make sure you consider each one when developing your IP strategy (which should sit alongside your business plan).

1. Copyright

Copyright is a good place to start. You will already own various copyright works. These include written and artistic works (drawings, sketches and photographs) that you have made yourself or have commissioned others to help with.

One of your first investments which is loaded with copyright materials will be your website. Have a look at it. The text is a copyright work, the pictures, films, animations, music and diagrams are all copyright works, even the layout may be given copyright protection.

Copyright arises automatically and the first owner of the copyright is usually the author. If you are employing someone to design your website for you, who owns the copyright is something that you should check. The same applies to any such work that you are doing (you will be the author) or are asking someone else to do for you. Ownership and rights to use copyright works are key. Copyright extends for the life of the author of the copyright work plus 70 years.

Conversely, make sure you consider other people's copyright if you are using some of their material.

2. Brand Names and Trade Marks (see our earlier blog about business incorporation)

Something that will feature prominently on your website and is crucial to your business is your business or 'brand' name. This is the name that is your 'badge of origin' which distinguishes you from the competition. This name is also your trade mark, think Coca-Cola, Harley Davidson, Shell and Microsoft. All of these are trade marks identifying the individual business.

Trade marks have to be distinctive (not descriptive) for the goods or services that you are selling and must not be similar to another business in the same field such that the names of the business could be confused.

In your marketing, it is likely you will want a brand name that speaks immediately of the product (effectively 'it does what it says on the tin') while trade mark professionals prefer words that are not immediately associated with the product, for example 'Dove' for soap. The short term problem for such strong marks is getting public recognition of the brand where the identity of the product is not obvious.

3. Patents

Some inventions that are 'novel' and can be produced en mass may be patentable. This is another monopoly right which gives the patentor 20 years protection for his invention from competitors. Obtaining patents can, however, be a complicated process and take several years and in the UK and Europe are generally not available for software or for business processes

4. Registered Designs

Traditionally original designs for products (from fabric designs, kettles, shower trays to agricultural machinery) can be protected as registered designs (which are also monopoly rights). A registered design includes surface decoration (so could include posters advertising products and other advertising materials) and otherwise is concerned with the shape and configuration of a product. A design should be registered within the first year of its use to ensure protection. A design can be registered for renewable periods of five years up to a maximum of twenty five years.

Unregistered design rights that arise automatically may also be created and attach to the shape and configuration of a product. These are much more limited rights and can only be infringed by copying,

5. Other rights

Other rights provided protection as intellectual property include confidential information, know-how and database rights. Domain names may also fall within this category which we'll cover in our next post. Having identified the elements of your business that are subject to IP, make sure you have your plan in place to protect this.

So never underestimate the importance of getting your IP right. In some cases, businesses valuations (if considering investment or exit) have been dramatically reduced if your IP strategy is not in place. Start-ups and scale-up give investors (or buyers) more confidence with having your IP protection.

When you are developing your IP plan, make sure you've got the correct founders/shareholders agreements in place (see our previous blogs) and clearly showing who owns what element. We've seen many cases in the press, where founders who leave the business, taking IP with them to start another venture. Therefore make sure all of your initial documents/contracts are in place. The investment you make now will be worth your time and effort.

Please contact the Trowers’ team for more information. We have also produced a series of fact sheets to help you, so click here to access our online resources.

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