Around 33.62 billion dollars have been poured in by investors into the Indian start-up ecosystem since 2014. Half of that amount was invested in 2017 ($13.7 billion) and the first quarter of 2018 ($2.26 billion). This staggering number stands proof that the Indian start-up ecosystem is here to stay.

A successful start-up means a great idea, or an initiative was executed in a relatively short period of time as compared to traditional business set-ups.   

Technology has fundamentally changed the way start-ups operate. Most of the start-ups are using state-of-the-art technology to find innovative solutions. Such innovations need funding for scaling-up of the prototype models. Before funding, investors look at various aspects such as the viability of a start-up business, scalability scope, the initial investment required, returns on investments over a period of time, etc. However, one of the most crucial one is the start-up’s IP protection and their overall IP strategy.   

Although the mindset of Indian start-ups is changing rapidly, many are still ignorant about this crucial component.

A proper IP strategy includes planning around factors such as: what aspects should be protected, when to be protected, in which countries to file, and the potential infringement approach.

IPRs most relevant for start-ups:

  • Patents
  • Trademarks
  • Designs
  • Copyrights
  • Trade Secret

The criteria for protection of each type of IP is different and is mentioned below:

Type of IPR Criteria for Protection
Patents 1. Inventive Step

2. Novelty

3. Industrial Applicability

Trademark Uniqueness/Distinctiveness (inherent or acquired)
Copyright Originality
Industrial Design Novelty

Basic Advantages of IP Protection:     

It’s incredibly important for a company to manage its IP wisely from a competitive standpoint. Start-ups strive to stand out in a market. In order to stay ahead, protecting and managing their IP is crucial. Managing IP diligently may take effort and investment, but it can be worth it. Below are some of the advantages of being an IP-conscious start-up:

  • It helps the founders and innovators safeguard their research and development efforts.
  • The threat of unfair competition and other copying is minimized with enforcement measures.
  • Protected ideas lead to high investor confidence.
  • The company’s ability to attract innovative employees, vendors and collaborators increases if their IP is protected. This creates a secure environment for all – where no one fears to lose their efforts to competitors.
  • Develop an attitude conducive to defend IPR and innovate with freedom.
  • Ensures the freedom to operate locally and open channels for global expansion.
  • Generate revenue through licensing. The IP behind the product/technology can be sold later if the owner (assignee) of patents decide to focus their attention elsewhere or even desire for some financial consideration.
  • Increase the market value of products and technologies – strengthen the marketing strategy.
  • Strategically align with potential market leaders and leverage the advantages of IP through cross-licensing.
  • Develop partnerships for research and development activities with confidence.

Non-registration of IP could lead to problems like overnight disruptions by competitors, difficulty in obtaining legal relief in case of infringements, less investor confidence, having nothing in hand to counter if sued for IP infringements by competitors, lost licensing opportunities, etc.

Choosing the Right Type of IP for your Business

Each type of IP protects a different aspect of your business and have different applicable fee and filing requirements. Time period for which you get protection also differs for each type of IP.

Our e-book provides some essential information to start-up founders, entrepreneurs and investors which enable them in taking right and well-informed decisions at the time of making an IP strategy or investing money in a start-up. Download here and have a look at the different aspects you should consider before planning your IP strategy.

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