It is acknowledged that for start-ups more than 50-80% of a business’ value is derived from intangible assets. That means that the vast majority of a company’s value is derived from its intellectual property (IP) assets. 

IP is any form of creation/innovation, artistic or technical, that an individual and/or business produces, often on a daily basis. Therefore, there are four principal areas of IP protection: Patent, Trademark, Design and Copyright. And a start-up’s IP covers everything from website content to pharmaceuticals, databases, services, software through to new technology and everything in between, even an individual’s or company’s name. Consequently most, if not all businesses, will create/develop more than one form of IP.

IP protection should be an important consideration for most start-ups. And obtaining IP protection can minimize competition and act as a defensive mechanism against infringement claims from others. IP can also attract or solidify funding and partnerships. In formulating an IP strategy, any start-up should consider the following:

File early or keep quiet?

The start-up’s time to file for patent protection is limited and patents should be contemplated early on in the development. Worldwide (except in the USA where there is a one-year ‘grace period’ from first publicising an invention to filing for patent protection and the ‘first inventor to file’ principle applies) an inventor or the inventor’s company can benefit from the ‘first to file’ principle (i.e., the first to file a patent application to an invention secures the monopoly over that invention). As such, it is a race to the patent office!

However, if funds to secure patent protection are not available from the outset (which is often the case), start-ups should take care in the way they present their inventions to investors, at competitions, to potential partners and when publicly pitching for funding or for incubator spaces – since inventions must not be available to the public prior to patenting. This cannot be stressed enough - a start-up will not be able to get a patent if the invention is considered to already be in the public domain. For this reason, it is advisable to seek professional advice and/or, where possible, to require the parties the start-up engages with to sign a Non-Disclosure Agreement (NDA) with the start-up. 

Furthermore, if signing an NDA is not practical (for example, at public competitions), the start-up should disclose the invention only in terms of the (i) existing previous publications in the same technical field (i.e., so-called ‘prior art’), (ii) the problems with the prior art, (iii) the solution offered by the invention to solve those problems (brief statement suffices) and (iv) the advantages of the invention over the prior art. Start-ups should ensure that the four PPSA points are addressed fully and in the indicated sequence to avoid public disclosure of the invention (thus to preserve the novelty of the invention and increase eligibility for obtaining patent protection). 

File again as the invention evolves

As the start-up continues to develop its product/s, consider each new product feature as a possibility for patent protection. Start-ups that file one early patent application and stop may find that, once the patent grants, the product has moved far beyond what was in the original patent application. The product may end up being under-protected or not even covered by the patent at all. Therefore, it is important to re-evaluate patent protection on a regular basis and consider filing on new features of the invention when applicable.

While patents are a valuable asset to any start-up, they are only one piece of the puzzle

A start-up needs a good product or service to be successful, hence the start-up should consider taking advantage of other registrable IP rights (design and trademark) or invoking the use of automatic IP rights (copyright, database right, performers’ rights, …).