Initial stage of any business is very crucial. Building the team, structuring the company, attracting investment and developing the product, key partnerships, sales channels and marketing plans are typically all-consuming tasks for the founders and these tasks, intellectual property at times takes a back seat. Presently, MSMEs/ Start-ups are facing a lot of issues making it difficult for them to survive in the competitive market. With poor technical knowledge, they often face trouble finding an appropriate solution for their business. An innovative idea takes months to develop, test and approve before finally making it to the production. In this regard, Intellectual property comes to rescue which provides a sturdy platform for MSMEs/ Start-ups to perform and gain commercial success in the present knowledge driven economy. The sector players can achieve an accelerated growth by gaining a technological benefit over their respective innovative ideas and registering the same as an intellectual property. For MSMEs/ Start-ups, understanding of three types of intellectual property is utmost important:
The person inventing any invention should be able to exploit it commercially. Patent is granted when the invention is found to be new, novel, contain an inventive step, and capable of industrial application. A patent for an invention is granted by the government to the applicant, and gives him the right for a limited period to stop others from making, using or selling the invention without permission. In return for this right, the applicant discloses the details of his invention in sufficient detail so as to enable a person skilled in prior art to perform the invention. When a patent is granted, the applicant becomes the owner of the patent. Like any other form of property, a patent can be bought, sold, licensed or mortgaged. Patents are territorial rights, so an Indian patent will only give the owner rights within the territory of India and rights to stop others from importing products into Indian Territory. In India, the non-utilization of Patent information and ignorance of the fact that Patent information is not only for scientist but also for businesspersons, MSMEs and Start-ups is major problem. Not every start-up business will be best-served by investing its resources in building a patent portfolio, but the question of whether to pursue patent protection warrants a decision at an early stage. Patent protection is important for two reasons:
- To protect the business and inventions from competitors.
- To avoid the risk of being exposed to assertions of patent infringement by competitors and other third parties.
Although patents are the most expensive and time-consuming type of intellectual property to obtain, they also provide the best scope of protection. Patents may provide a number of benefits to MSMEs/Start-up businesses. A robust patent portfolio or a key patent can help to attract investors, since it may serve as an entry barrier against competitors. As indicated above, registered patents may be used to stop competitors from entering the field and to recover damages for any infringement that occurred. Finally, patents can also further help the finances of a business by providing an additional opportunity to generate revenue from licensing.
Trademarks are words, symbols, logos, slogans or product packaging and design that identify the source of goods or services. Trademarks serve to build brand awareness and business goodwill. Unlike patents, trademark rights are acquired through use. Trademark is a distinctive mark that helps consumers identify and choose their preferred products or services based on its reputation and quality. Trademarks are the crucial elements which affect and further reflect decisions of the consumers. The entrepreneur retains the exclusive rights to mark their products or services with a trademark hence focusing on gaining consumers, maintaining a good reputation and providing quality and standardised services and products.
Although registration of Trademark is not required to gain trademark rights, registration provides certain important benefits to the trademark holder. Registration creates a prima facie case of validity of the ownership as well as an exclusive right to use the mark for specified goods or services. By registering the trademark the entrepreneur can effectively build a barrier towards unauthorised use, protecting your business from damaged reputation. A registered trademark further provides protection from operating or expanding its current identity.
Trademarks can appreciate in value over time with continuous brand awareness through social media platforms. The more the reputation grows, the more value the trademark creates for the startup. Thus, trademarks can potentially lead the way for growth and expansion of the business. Trademarks like the fixed assets are also an asset, which can be bought, sold, leased or used as an underlying asset to secure a loan to grow the entrepreneur’s business. In addition to obtaining trademark rights, just as with patents, businesses should be aware of whether their desired name, logo or domain name is already in use by others. MSMEs/ Start-ups should protect their trademark at initial stage of business by registering the trademark. As the company grows, it will become increasingly important to police infringing uses of its marks. Such efforts will help ensure that the business is not losing customers due to confusion with counterfeit.
Copyright is a form of intellectual property that protects the expression of ideas. Books, music, art, photographs, architecture and even computer software are protected by copyright. While copyrights protect the expression of ideas, they do not protect ideas or concepts themselves. Another requirement for copyright eligibility is that the work is an original work of authorship.
Like trademarks, copyright registration is optional. As soon as a work is written or recorded or otherwise fixed, it is considered to be copyrighted. Registration provides procedural benefits. Critically, registration is necessary in order to file a suit for copyright infringement. It is also necessary to receive certain remedies, such as damages. Businesses should include the © symbol or the word “Copyright” with all materials it distributes. They should also include the year of first publication, the name of the owner, and the language “All rights reserved.”
MSMEs/ Start-ups should also be careful to avoid using third-party photos, music, or writings on their website, marketing materials or products. Such use could lead to a potentially costly infringement dispute with the copyright holder. MSMEs/ Start-ups should take steps to ensure that they receive the rights to any copyrightable work performed by employees or third-party contractors. The Copyright Act lists specific requirements for works for hire, and employment and third-party contract agreements should include specific language to address ownership of any copyrightable works.
While intellectual property issues may sometimes get brushed aside during the early stages of a business, the benefits of a diligent and intelligent Intellectual Property strategy are likely to produce serious value. MSMEs/ Startups should be aware of the types of intellectual property that can impact their business and strategically consider pursuing patent, trademark and copyright protection as appropriate. Defensively, MSMEs/ startups should assess the intellectual property landscape of their industries. That awareness should be coupled with clearance efforts to ensure that the company will not infringe upon the intellectual property of others. Trademark, copyright and patent serve as an important asset for any beginner or start-up, and thus are important for them to survive in this competitive business world.