Your Startup’s Guide to Intellectual Property
Intellectual property or ‘IP’ refers to the intangible assets belonging to your startup. It describes the idea or creation at the core of your startup and is afforded the same protective rights as physical property, as well as valuable assets such as marketing material, graphic design, logos, systems, processes, code, software, and more. Your startup’s intellectual property is your currency which is why it’s essential to obtain the right startup intellectual property protection. Your startup’s intellectual property can represent a gap in the market or a competitive advantage, vital in today’s aggressive commercial landscape.
Intellectual Property Protection
Due to the inherent value of intellectual property your startup should be careful to protect it. The earlier your startup develops a strategy to protect your startup’s intellectual property rights the better, as not doing so can be costly. Some of the most common startup intellectual property protection includes things like copyright, patents, trade secrets, circuit layouts and trademarks.
Copyright
Copyright can provide you with the exclusive right to use or duplicate your designs or materials. Common works that can be protected by copyright include magazines, books, artwork, film, or music. Depending on your asset, the term of copyright protection typically lasts the length of the author’s life, plus 70 years.
Patents
Patents refer to the right to an invention. This can include new products, processes, and substances. In Australia there are two types of patents – the standard patent and innovation patent – which you can read more about here.
Trade Secrets
This is your startup’s proprietary knowledge and can comprise of processes, designs and secret formulas that are valuable due to their exclusivity. You can protect your trade secrets by ensuring employees, contractors, and other parties agree to maintain confidentiality. To do this you will need an expert IP lawyer to assist you in drafting the confidentiality agreement.
Trademarks
A trademark can be a symbol, logo or phrase which distinguishes your startup. A trademark is also a valuable tool for marketing your startup, as it is what visually separates you from your competitors. To ensure your trademark remains exclusive to your startup, you will need to submit a trademark application.
Circuit Layouts
This is used to protect your computer designs, inclusive of computer chips and computer circuit layouts. This form of intellectual property is complex and requires unique copyright protection.
Plant Breeder’s Rights (PBR)
If you discover a new plant variation, you can be granted the exclusive rights to its production and sale. To learn more about these protective measures you can select the link.
Assignment of Intellectual Property
Under an intellectual property assignment agreement, you are permanently transferring some or all your startup’s IP rights to the assignee in exchange for a specified sum.
If you assign intellectual property to a third party, you no longer have any responsibility or ownership in the product. Founders will usually assign their individual intellectual property rights to their startup once it is formed. Assignment of intellectual property rights is also appropriate if you are looking to sell your startup.
Intellectual Property Licensing Agreements
Under an intellectual property licencing agreement, you retain ownership of your intellectual property whilst giving another party permission to use some or all of your intellectual property rights. These intellectual property agreements typically specify termination dates, consideration (payment), and rights and oblgiations around the use of IP. There are several types of intellectual property licenses embodied in a typical intellectual property agreement which you can read more about here.
Rights and Ownership
In the absence of a license, use of a third party’s IP by your startup is potentially violating someone else’s intellectual property rights. Intellectual property rights violations can trigger costly disputes often resulting in the breaching party having to rework their products and procedures or enter into expensive licensing agreements with the third party.
Subject to any agreement which provides otherwise, your startup will own the intellectual property rights to whatever is produced by your employees during their employment. Unfortunately, a grey area emerges when work is not carried out by your employees, for example such as when your venture is getting started and legal structures aren’t yet established, or where you have informally engaged a contractor. You will need to proactively consider who has and who will work on key aspects of your startup as this will be crucial to the value of your venture. Follow the link for information on how you can retain and protect your intellectual property rights.
Expanding Overseas
In Australia you can protect your intellectual property through various startup intellectual property protection agreements. If you are looking to expand your startup overseas, this process becomes more complicated as you will need to make important considerations when it comes to your startup’s intellectual property rights. This will involve understanding where you have protection and where you do not. This will help you to establish your startup’s market position and ensure that you are not infringing on existing intellectual property rights in the country you are seeking to expand into. At Allied Legal, we have outlined how you can protect your intellectual property rights overseas here.
Intellectual property agreements can be complex and require careful negotiation. Founders of intellectual property should conduct these negotiations with the support of an experienced IP lawyer. At Allied Legal, we deal with intellectual property daily and are well equipped to assist you in this regard. If you would like to connect with one of our IP lawyers, you can contact us on 03 8691 3111 or email us at hello@alliedlegal.com.au.
