How to protect a startup’s intellectual property?
How do you safeguard your intellectual property? This comprehensive guide will explain what intellectual property is and how to ensure your IP is protected.
You’ve got an excellent idea for a product or service, but how do you keep it safe? The startup landscape is highly competitive, and there is the risk that a competitor could copy your ideas, either coincidentally or intentionally.
This is why it’s so important to protect your startup’s intellectual property or IP. In this article, we’ll explain what intellectual property is, how to keep it safe, and what to do if you think someone has stolen your idea.
What is intellectual property?
Intellectual property is any type of content that you create using your brain. For example, a piece of music, a logo, or a brand name.
Even confidential information (trade secrets) can be considered intellectual property.
Who owns a piece of intellectual property?
Let’s say you have a logo for your startup. Whoever owns the IP depends on a number of factors.
- If you create the logo yourself, you own the IP
- If an agency creates the logo for you, they own the IP, unless the contract specifies that the rights are given to you
An owner of a piece of intellectual property may also agree to sell it to you, either in full or in part.
Why is it so important to protect your intellectual property?
Even if you own your IP, protecting it makes it easier to take legal action against someone who steals it.
Protecting your intellectual property typically adds it to a national or international database, meaning other startups can see you own the IP and are less likely to infringe upon it.
The different types of intellectual property protection
Depending on where you are based and the type of intellectual property, you may get limited protection. For example, in the UK, the shape and configuration of a 3D object are protected for ten years after it was first sold or 15 years after it was first created, whichever comes first.
However, it’s always worth taking specific action to protect your IP. Here are some of the ways you can do this.
Patents
A patent is an exclusive right granted to protect an invention. This means the invention can’t be commercially made, used, distributed, or sold without the owner’s consent.
To obtain a patent, your invention must be new and inventive. It’s not possible to patent an abstract thought, artistic works, or a scientific method.
Patents are typically territorial, so you could own the patent for an invention in one country, and license the patent to someone else in another country.
Patents must be fully disclosed to the public — it’s not possible to keep an invention secret. For example, in the US, you can check out patents on the Patent Public Search database.
The length of time a patent lasts varies from country to country. For example, a patent lasts for 20 years in Canada, but only for five in the UK (although you can renew it for up to 20 years).
Trademarks
A trademark is a sign, logo, tagline, or design that identifies a specific business. The Nike swoosh, the McDonalds arches, the Apple logo… these are all trademarked!
Your trademark can be words, sounds, logos, colours, or a combination. You can trademark across a specific industry sector or a country. You have a better chance of your trademark being accepted if you’re narrower in your thinking. For example, consider Dove ice cream bars in the US and Dove soap in the UK — both brands peacefully coexist with each other!
A trademark typically lasts ten years, and you can renew it as needed. Like patents, trademarks are visible in the public domain. For example, in the UK on the Intellectual Property Office database.
Copyrights
Copyright applies to mediums of expression, like a piece of music, a photo, or a whitepaper. Although, it’s important to remember that copyright protects the expression of the idea rather than the idea itself.
Typically, copyright doesn’t apply to things like slogans and logos.
Copyright is secured automatically when a piece of work is created; unlike patents and trademarks, you don’t have to apply. However, if you do want to register your work so everyone is aware you created it, you can in certain countries. For example, in the US this is done through the US Copyright Office.
(Important note: if you do opt to register your copyright online, we recommend you only do this through the official government channels, as there are some scam websites that ask you for money.)
Copyright protection lasts for a set amount of time, which can vary from country to country. As a rule of thumb, copyright typically lasts for the life of the creator, plus fifty years.
Where is the best country to register your own digital startup?
Non-disclosure agreement (NDA)
An NDA is a legally binding contract that prevents the disclosure of confidential information. If someone signs the NDA and discloses information, you are in a position to sue them for breach of contract.
What’s more, a patent or trademark is always the best way to protect your intellectual property. However, an NDA can be helpful in the following scenarios:
- While you wait for your patent or trademark application to be approved
- You need to protect something intangible like a trade secret
- You don’t want your IP to be known to the public
- You want an extra degree of reassurance
Examples of famous intellectual property breaches
Apple and Microsoft
In 1988 Apple sued Microsoft, accusing the company of stealing its graphical user interface on Windows 2.0.
However, this is where things get interesting. Apple had previously agreed that Microsoft could use its design elements, but the legal team thought that this only covered the release of Windows 1.0.
So when Microsoft continued to use the elements in the next version of Windows, Apple filed a lawsuit. Unsurprisingly, the judge ruled in favor of Microsoft.
(The moral of this story is always to check that your IP documentation is watertight!)
Uber and Waymo
In 2015, Uber was sued by Waymo, a self-driving car company owned by Google’s parent company, Alphabet.
Waymo claimed that Uber had hired a former employee who had stolen thousands of confidential documents and brought them to Uber.
The case was settled out of court, with Waymo receiving 0.3% of Uber’s equity as part of the deal.
Apple,Samsung, and Google
In 2010, Apple took Samsung to court, claiming it had breached Apple’s IP over its smartphone design. As Samsung used Android, an operating system developed by Google, Google had to get involved in the case too.
The case went back and forth multiple times, with Samsung countersuing Apple, claiming Apple had stolen Samsung’s IP. The court initially ruled in Apple’s favor, but Samsung appealed the decision twice and ended up winning the case six years after the lawsuit was originally filed!
What to do if you think someone has breached your intellectual property
If you believe someone has infringed your intellectual property, your mind may go straight to taking legal action. However, it’s important to remember that legal action is expensive and can potentially take years to resolve — case in point, Apple vs Samsung. There is also the risk that the defendant may countersue if they think they have a valid case or appeal a decision against them.
IP is often breached accidentally, so in most cases, making the infringer aware and asking them to stop is enough. A cease and desist letter written by a lawyer usually works well. Be sure to identify what IP they have infringed, what they need to do to avoid further action, and the deadline to comply.
Alternatively, if you find infringed materials online, you can use legislation like the Digital Millennium Copyright Act (DMCA) to get this information taken down.
Important note:
If there is a dispute, arbitration can often get to the bottom of the issue and is less expensive than going to court.
If none of these ideas work and you think the infringement is severe enough to cause financial and reputational harm to your startup, litigation may be the next step. It’s vital to assess the severity of the issue to see if taking legal action is worth it.
While IP infringement is typically civil in nature, there are some circumstances where it’s a criminal offense to use copyrighted material and registered trademarks without permission. This is typically when logos and brands are used on counterfeit goods.
We always recommend speaking to a lawyer who specializes in intellectual property to determine the right course of action to take.
Additional things for startups to bear in mind
We’ve talked about the basics when it comes to intellectual property, but here are some additional things to consider.
Do your due diligence
While it’s crucial to safeguard your own IP, it’s also vital to be mindful of other startups’ IP too. You don’t want to launch your startup, only to find yourself in a long and arduous legal battle because you accidentally infringed on someone else’s intellectual property.
Make sure you’ve established the provenance of all the material you use and have obtained all necessary rights or licenses.
Also, be sure to conduct relevant copyright and trademark searches in your country. Bear in mind that with trademarks, you can be at risk of infringement if your idea is similar (rather than exactly identical) to someone else’s IP.
Be mindful of data protection laws
Depending on where your startup is based and whose data you handle, you may be affected by data protection regulations. For example, the Health Insurance Portability and Accountability Act (HIPAA) in the US and the General Data Protection Regulation (GDPR) in Europe and the UK.
Data protection laws may restrict your ability to disclose intellectual property contained in people’s personal data. For example, trademarks and patents are often public records that are openly available to anyone who wants to view them, but you need to keep specific data private to comply with your legal obligations.
Need more information about data protection and how to stay compliant?
Educate your employees
Your team is your eyes and ears on the ground and can ensure your IP stays protected. It’s essential to keep them up to date with your IP policy and procedures.
We recommend nominating an ‘intellectual property champion’ who can coordinate training and be the first point of contact if an employee has any concerns.
If in doubt, speak to a specialist
Intellectual property law varies from country to country. While we’ve given you an introduction to IP in this article, we recommend talking to an IP lawyer or patent attorney if you have any specific questions.
Even if you have your own legal team in-house, an IP lawyer may be able to offer more specialist advice, advising you on specific regulations and drafting agreements that ensure you stay protected.
