In his first article for //Startup News, Wrays Special Counsel Adrian Huber provides some advice for startups on intellectual property…
As a startup, you’ve probably got a lot on your to-do list, from completing your MVP to refining your business model and planning your strategy.
So where does intellectual property (IP) fit in to all of this? Do you have time? Do you have the budget? And why should you make IP a priority over all the other important stuff you have to do?
These next three tips are some of the most common pieces of advice we routinely give to our startup clients each day. If followed, they can save you and your business from being distracted, giving you more invaluable time to focus on the things that are important and generate real value.
1. Keep it confidential
One of the very first things you want to do with your new idea is to shout it to the world! After all, you’re proud of it, right?
And you know deep down inside that a “common sense” check with your friend, family member or work colleague will give you a healthy dose of reality you need. Then, you need to discuss your idea with a developer be it an engineering company, or software development company. Now enter from stage left the Confidentiality Agreement (or Non-Disclosure Agreement as it’s also called).
The reasons you want your discussions about your idea to be treated confidentially are many, but these two are the most important:
- You don’t want someone else to run off into the sunset with your idea
- You don’t want to inadvertently destroy your ability to get a patent
These two things can happen if you don’t ensure your discussions are treated and kept confidential. So always consider entering into an NDA with anyone with whom you will be discussing your idea.
Signing a formal document like an NDA also sets the tone of the relationship. It lets the recipient know that you value your confidential information and that it should be treated differently to other information.
People always ask me, what’s the value of an NDA? Is it worth the paper it’s printed on?
In the case of a dispute about confidential information, it is almost always better to have it in writing. It gives the recipient party a lot less wiggle room if your NDA sets out clear expectations for how confidential information will be treated and managed and precisely defines what your “confidential information” actually is.
2. Own what you pay for
Did you know that, generally speaking in Australia, if you pay a contractor to create a design or code a piece of software for you, the first owner of the IP in that creation is the contractor and not the person who paid for it?
This default legal position takes many by surprise.
The solution is quite simple: get ownership of IP confirmed in writing. If you need to own that particular piece of IP make sure you have a written agreement clearly stating that you own the intellectual property in what has been created. This is called an ‘assignment’.
For software, it might be the source code, the logo, icons, graphics, text and the even the wire frame.
For a new device, it might be engineering drawings and even the engineer’s own “inventive contribution” towards the device – this is especially important if your idea is not fully formed and you are outsourcing some of the “inventing” to your contractor.
The other thing to remember is that you don’t need to own it all – sometimes you just need sufficient permission to use the IP or parts of it. This is called a ‘licence’ and merits a separate article of its own!
3. Be aware of who else is out there
IP is literally all around us.
The Apple iPhone consists of hundreds of different IP rights: patents for inventive aspects of its functionality, designs protecting how it looks, trade marks protecting the brand and copyright protecting the software code.
Many of these rights are registrable, and so publicly accessibly IP registries all around the world can tell you all sorts of interesting things about the monopolies (or exclusive fields) that these IP rights owners hold.
Since straying into someone else’s exclusive field can lead to IP infringement, the first use for trawling the public IP registries is to help you understand whether your proposed new product or service may be infringing someone else’s IP rights.
Another way you can leverage publicly available information is for competitive gain.
For example, doing a quick search for Apple’s latest patent filings can tell you what they’re working on. Conducting searches of competitor’s filing helps you understand where their products may be heading before they even hit the market, which could give you the heads-up you need to pivot and save some invaluable resources (such as time and money).
Flicking through the patent register can also tell you what’s been done before.
Generally speaking, under patent law, if it’s done been before anywhere else in the world (whether found in a patent or in a journal article), you may find it difficult to obtain patent protection yourself.
The lesson here is that freely available information can be used as a powerful source of intelligence to inform your product or service development, refine your go-to-market strategy and stay ahead of the competition.
In the end
Adopting an IP conscious approach whilst continuously refining your idea is a smart way of going about pursuing your startup.
The tips set out above can be easily integrated into your startup journey by simply stopping at various touch points to ask three simple questions:
- does this need to be kept confidential?
- do I own it? and
- what are others doing?
Armed with these three simple questions, you are well on your way to protecting your IP proactively, which will automatically give you a competitive edge over those that don’t.
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Adrian Huber is Special Counsel for Wrays law firm. Wrays are a sponsor of Startup News.
