Startups

IP Basics for Startup Founders

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New founders of small businesses will be conscious to ensure their new and novel ideas are protected whilst they develop their ideas and market them. Protecting your ideas is one of the most important ways to protect your business and its growth and whilst startup founders might be aware of 'IP', they might not understand exactly what IP rights are and why they are important. In this guide, we will explain the basics of intellectual property (IP), take you through the main types of IP and outline how and why you should protect them.


What is intellectual property?

Intellectual property is a category of ownership that covers the intangible creations of the mind. Put simply, IP can be seen as 'owning' your ideas. Like you have ownership of a property that you have built, you also have ownership of ideas that you have grown. Examples of IP include trade secrets, inventions, confidential information and the original work which led to the development of your new products. Intellectual property rights (IPR) are therefore designed to afford protection to your creative and inventive ideas. These rights prohibit people from stealing or copying the idea and allow those that own them to make money from them.

A person can own IP in a variety of ways. A person will own IP if they create it, purchase the rights to it or if they have a brand that could be a trade mark, which we will discuss below. As you might have inferred by who can own it, IP can be sold or transferred and can belong to businesses as well as multiple people.

In the next section we will give an overview into the types of IP that can be protected.

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What are the different types of IP?

Depending on the nature of the IP, it will either be automatically protected or fall under a category of cases where you have to apply for protection.

Automatic Protection

Copyright

Copyright is a type of IP that prevents other people using your work without permission, particularly for profit. Under UK copyright law, founders do not have to apply for copyright protection but will automatically get protection if they create:

  • Original literary work, dramatic work, musical work and artistic work
  • Original non-literary written work (such as software and web content)
  • Sound and music recordings
  • Film and television recordings
  • Broadcasts
  • The layout of published editions of written, dramatic or musical works.

Copyrighted works carry the (c) symbol along with the name and year of creation. However, failure to mark relevant objects does not affect their level of protection afforded by English law that prohibits others from copying the work, distributing it (even for free), renting or lending it, performing or showing it in public, adapting your work or putting it online.

Copyright will begin once the work is created and the length of copyright will depend on the type of work. For example, films are copyrighted for 70 years after the death of the director, screenplay author and composer whilst broadcasts are copyrighted for 50 years from the first broadcast.

Copyrights can be licensed (so that others can make use of it) and can be sold or transferred, including by inheritance. The person who owns the copyright is responsible for its defence.

Protection you can apply for:

Design Right

Design rights are automatically protected but it is advised that founders register the look of a product that has been designed to prevent others from copying it. This can include the appearance, configuration, decoration and shape of the design.

Whilst some shapes may already be automatically protected by designed right, it is better to register the design. By registering a design a founder can protect aspects of the design by preventing others from using it for up to 25 years and makes legal action against those that have copied or stolen easier.

For registration, designs must be new, non-offensive, part of the founders IP, must not make use of other protected emblems and cannot be an invention or something that is to protect the functionality of the design (for which you will need a patent).

Once registered, a founder must renew the registered design every 5 years and can display the registration number on the product.


Trade marks

Trade marks are designed to protect a company's brand and must be registered for sufficient protection. By registering a trade mark, founders can take legal action against anyone who uses the brand name without permission (extending to counterfeits), put the ® symbol on their brand and can sell and licence it.

For a trade mark to be registered, the brand must first qualify as a trade mark. Trade marks must be unique and can include words, sounds, logos or colours. Trade marks cannot:

  • describe the goods or services it will relate to;
  • be offensive or misleading;
  • be a 3D shape associated with the trade mark;
  • Be too common or non-distinctive, or;
  • Look too similar to state symbols.


Before applying, founders should search the trade mark data base for similarities. If an existing mark is similar, a founder can approach the holder of the existing trade mark for permission to register by giving you a 'letter of consent' that you will attach to your application.

A founder can then apply to register that trade mark by detailing what they want to register and the trade mark class they want to register in.  

Trade mark registration usually takes 4 months (provided it is not opposed) and last for a 10 year period.

Trade marks are awarded jurisdictionally meaning that a UK registered trade mark granted by the UK intellectual property office only affords protection in the UK (and Isle of Man). There are different processes for registering trade marks abroad and founders should consider the extent (if at all) of international expansion when considering trademarking their product.

 

Patents

Patents are used to protect inventions for a period of time and are particularly relevant for start up founders who have developed new and novel approaches to resolving problems. Patents give their holders exclusive rights to the invention as well as intellectual property protection against those that make use of the invention without the patent holder's permission. This means a patent holder has the right to take legal action against those who infringe the patent.

Such inventions must not already be in the public domain, must be new, inventive and something that can be made or used to qualify as something that can be patented. Patents cannot be used for:

  • creative works;
  • ways of thinking or doing business;
  • medical treatments and diagnoses;
  • scientific theories or mathematical methods;
  • the way information is presented;
  • computer programs or mobile apps, or;
  • 'biological' proceses

Out of all of the forms of IP and IP protection described in this article, patents are the most difficult form of protection to obtain and the most expensive. Only one in 20 applicants get a patent without a professional help; the process is longer than other applications and is costly. Therefore, founders should only apply for a patent if they are confident in its success, perhaps by speaking to a patent attorney, and have the capital to afford it. Listen to our episode with a patent attorney to understand what can be patented and the process you need to follow with patent offices to obtain a patent.


Conclusions 

As a startup founder it is important that you protect your ideas for they will ultimately be your biggest business asset. Affording your ideas legal protection and deriving legal rights to your ideas is one sure way to do this and this article has highlighted the basics of the types of intellectual property you might want to consider protecting. Having these protections in place also makes your business more attractive to investors and stands you at the forefront of your market. 

However, protecting your ideas also means ensuring that you have the relevant clauses in your contracts. Legislate's lawyer-approved contracts are suited for startups and technology companies due to their wide IP and confidentiality clauses that traditional templates don't address and our online platform powered by patented technology will set a good impression to your future employees right from the start.

‍Book a demo or sign up today to put the confidence back into contracting.


The opinions on this page are for general information purposes only and do not constitute legal advice on which you should rely.

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