protecting intellectual property (ip) at startups - ravi vaikuntachar, manager - ip analytics,...
DESCRIPTION
“Protecting Intellectual Property at Startups” was a highly interactive one with questions from entrepreneurs leading to much learning for all. Some key takeaways from the session: 1) IP is not a “ghost” to be feared, but a “friend” to be nurtured 2) Familiarize yourself with all aspects of IP relevant to your business and your idea. Just being informed helps you manage about 70% of the risk 3) The vision of the Startup should lead to an IP strategy that allows easy answers to key questions like – Should I patent or not? Which markets should I file patents in? etc. 4) Myths around IP should be shattered (example: unclear explanations of ideas to obfuscate full disclosure can leave Startups with a lack of protection) 5) The philosophy of patent protection should be understood – Governments give inventors a monopoly for a certain period of time in return for full disclosure from the inventors so that the next inventor/entrepreneur can execute and push the envelope for the general benefit of society 6) Misuse of patents can kill a company. Founders should do an initial patent search to ensure that they are not in violation. 7) Patent services companies are highly skilled (and expensive) but Startups may want to consider hiring these services because shortcuts often lead to significant exposure 8) Startups that are bootstrapping, can consider a provisional patent filing 9) Intellectual property is not just patents - Copyrights, Trademarks and Trade Secrets offer protections that should be considered as well. Indian entrepreneurs should take IP seriously to build credible businesses.TRANSCRIPT
Dr Ravi Vaikuntachar
Intellectual Property for Startups
What is intellectual property?
Creation of the mind resulting in useful
contributions to the society at large.
Human tendency is to protect and possess a
physical thing they have. Same goes with
creations of mind.
IP rights – state provides monopoly rights to
exclude others from practicing your IP in
exchange of making the IP public.
In general IPR aids the economic development of
the state / country by promoting healthy
competition and encouraging industrial growth.
Types of IP
Copyrights (art, literature, music, video, software
code, etc)
Trademark (brand protection – name, symbol,
etc)
Patents (technical advancements)
Designs (shape, configurations, patterns, etc)
Trade secrets
Geographical indications (Scotch, Champagne,
Banarasi Saree, etc)
Plant varieties
Integrated circuit layout designs
Features
IP rights are territorial in nature (other than
copyrights)
Rights are granted for limited period of time
(except trademarks)
o Patents – 20 years
o Designs – 14 years
o Copyrights – 70 years
Protection not available for what is already known
in the public domain
Trademark registration A graphically represented mark capable of
distinguishing the goods / services of one person from
those of others
Any person / company can register the marks with
patent & trademark offices.
Registration in India costs ~Rs.10,000/- for a single
word / graphic mark under one class. May cost
additional Rs.10,000 – 15,000/- if you take Attorneys
help.
Registration in US costs $375/-. Attorney costs vary
between $500-$1000/-.
Decision to register a TM in single / multiple countries
depends on the business vision you have for your
products / services.
Patent filing Invention = idea + reduction to practice
Patent requirementso Novelo Non-obviouso Industrial applicabilityo Unity of invention
Priority date – first to file
Filing strategieso Provisional - buy time for 12 months, save cost, strengthen
ideao Foreign filing through PCT - buy time for 36 months from first
application date, evaluate markets outsideo File in a foreign county directly if you are sure about doing
business only in that countryo Maintain it as a trade secret – guard against breach of
confidentialityo Don’t file – publish defensively to stop others from patenting
your invention
To file a patent or not? Pros
o Keep others out of market (exclusion rights)
o Restrict competitors
o Earn through licensing revenues
o Earn credibility from investors
o Enhance marketing
Cons – cost
o India – approximately Rs.400,000/- for full life of a patent.
o US – approximately $25,000/- for full life of a patent.
Evaluate cost benefits of obtaining a patent. Ask yourself, is this patent going to gain more value than the filing and maintenance cost of it?
Business risks Big companies protect their inventions and clear their
products from possible infringements to protect their
brands and avoid litigation costs (basically avoiding
opportunity losses)
Non – practicing entities often called as patent trolls
target big companies / start –ups to file infringement
suits
Valuation of a start-up may be lowered if inventions
are not protected and products pose infringement
risks
Start- up with a single product line (usual case) faces
maximum risk if patent system is not understood
Litigation costs run into millions in US. Can be
devastating for a start – up (operations delay, cost,
resources)
Apple vs. Samsung Apple Inc. sued Samsung Electronics Co. in April
2011.
Apple claimed that Samsung infringed four industrial design patents, covering the look and feel of the devices, and three utility patents, which cover how the gadgets work.
At issue are Apple’s design patents 677 and 087, which cover iPhone designs; 889, which covers the design of the iPad; and 305, which covers the iPhonegraphical user interface.
Jury found Samsung guilt of infringing on Apple’s design patent. Samsung had to pay $1.049 billion.
Leading devices (Galaxy) may be banned in US.
Samsung designed Galaxy Tab in Germany to avoid ban.
Case in India
Ericsson sued Micromax claiming 100 Cr in
damages over patent infringements in Delhi High
Court on wireless technology standards. Court in
its interim order asked Micromax to pay upto 2%
of sale price of disputed devices.