Start-Ups and Intellectual Property

The issue of how to approach the protection of intellectual property (sometimes referred to as “IP“) can often be a source of difficulty for start-ups. Around 67% of businesses with 0 to 4 employees use no form of IP protection,[1] which can put a start-up at risk of reverse engineering or replication of ideas. We have set out below a brief overview of the main protection methods-copyright, trademarks, patents and trade secrets-as well as some top tips for start-ups.

Copyright

Copyright is a form of IP that protects the original expression of ideas, and gives the creator the right to determine when and how their work can be used. Protection is free and applies automatically when material is created. It doesn’t protect the ideas themselves, information, styles, techniques, names or phrases. Copyright protects the work itself, be it textual material, computer programs or an artistic work. In practical terms, the capacity to rely on this “right” is founded in proof that the “copier” had access to a version that has been copied without authorisation.

Trade marks

A trade mark protects your brand, and can be licensed or sold. It is not merely a business name, nor is it simply a design. Trade marks are commonly used to protect logos, pictures, particular words or phrases, movements, packaging, or some combination of these things. A trade mark must meet the conditions of the Trade Marks Act 1995 and must distinguish your goods and services from the goods and services of other traders. To gain protection, the trade mark must be registered with IP Australia. You must continue to actively use the mark in the course of business, otherwise it may be removed.

Patents

A patent is a legally enforceable right for a device, substance, method or process. It effectively grants the owner a monopoly for a designated period of time as it allows an owner to stop others from manufacturing, using or selling their invention in Australia without permission. The invention or process must be new, useful and either inventive or innovative. In Australia, patent applications must be filed with IP Australia. Patents afford a very strong form of protection for many years, but can often involve a lot of time, effort and money. The decision to patent or not will therefore involve a balancing act between these factors and the potential commercial returns.

Trade secrets

Trade secrets are not registered. It is proprietary knowledge that is kept out of competitors’ hands by other means, such as requiring that employees and distributors sign confidentiality agreements. Iconic recipes are protected in this manne, for example.

Top tips

  1. Keep your invention a secret: It is important, particularly with patenting, to keep your invention a secret until you’re ready to apply. Demonstrating, selling or discussing it prior can inhibit your capacity to patent an invention. You can maintain this secrecy through confidentiality agreements.
  2. Don’t patent too early: The details of a patents are publicly available once published, so you should only patent an invention if you’re comfortable with the world knowing the details. Patents can also be time consuming and expensive to maintain, so a start-up should consider whether it is ready to undertake such an investment.
  3. Trade mark brands with images: It is typically a lot easier to trade mark brand images rather than straight text because those marks are more distinguishable of your goods and services.
  4. Create Intellectual Property Agreements: Ensure that your start-up itself owns the intellectual property (rather than have the individuals involved). Having employee or contractor agreements in place that assign the IP to the start-up will make it easier to ensure that you have a record of ownership of the IP from creation.

IP protection can be a difficult area to navigate for start-ups. Ensuring your ideas are protected is critical for future success, and so the most important tip is to seek professional advice on how best to protect your IP. If you need advice on how to protect and manage IP within your organisation, get in contact with our Business team.

 

[1] Australian Bureau of Statistics 2012