Over the past couple of decades, Intellectual Property has gone from being a necessary side-venture in most company portfolios to being what makes up a majority of its assets. For example, statistics stress on the large proportion of IP assets attributable to Fortune 500 companies. While the estimates vary, the lowest places the average IP values at 65% of the net worth. Needless to say, rapid technological advancements and changing market factors has gradually made conceptual property more valuable than the physical. In such circumstances, it’s unsurprising to see more and more companies, regardless of their size, focusing on developing an IP strategy.
An IP strategy is, in the simplest terms, a business plan to make the most of whatever intangible assets your organization may possess. Depending on company size and IP portfolio, strategies may be anything from deviously complex management rules to a set of easily-managed loose guidelines. While startups, due to their relative lack of capital and consumer market, tend to fall into the latter category, they can certainly benefit from strategic management of their assets. Particularly so if they are in a field that makes heavy use of technological or creative work. IP also tends to be something many entrepreneurs rely on- as the property is conceptual, a single resource could significantly increase company assets without the input of continuous capital.
The best place to start with this is by knowing the basics of the global IP system. An overview of the types of IP and protections available to your company, even if it’s not detailed, can give you a place to start considering how to consolidate your assets and utilize them.
Types of Intellectual Property: An Overview
There are many different types of IP- Trademarks, Copyrights and Patents are the most significant ones, with Designs, Trade Secrets, Geographical Indications, Semiconductors and Plant Patents/Varieties rounding up the roster. Chances are, your startup would require basic knowledge about the former three (perhaps five), unless the work is particularly specialized.
Patents are probably the holy grail of IP. Depending on patent type, they generally have the most selling power and may be incorporated easily into saleable products. A Patent covers most sorts of technological innovations which produce a tangible output, ranging from self-adjusting garments to flying motorcycles. Patents are typically granted for a period of 20 years worldwide. Applying for one is usually a long and complicated process that will almost definitely require professional help, particularly in terms of specifying what exactly you are claiming. The Patent field is pretty cut-throat and there are many overlapping inventions. Minor differences in claims and disclosures can gain or lose the application. In addition, Patents require a certain amount of secrecy- a publicly disclosed invention cannot, in many cases, be then turned into a patent. There are exceptions to this, as well as limitations to what kind of subject matter can be turned into a patent- but all of these depend on the individual invention.
Trademarks are far easier and cheaper to obtain, and it’s advisable for any company trading on its’ reputation with the general public to get one. A Trademark clearly identifies your goods and services, and helps the formation of public opinion. By its’ nature, the benefit is less concrete from that of other forms of IP, but more long lasting. Trademarks are one of the IP types that can be indefinitely renewed and gets stronger with time. The initial grant is usually for ten years, after which it can be periodically renewed. The application process for is fairly simple with few requirements, and can be done by the applicant themselves in many jurisdictions.
Copyright is unique in that it’s the one IP right granted automatically upon completion of the work. While some jurisdictions (such as the USA and India) require registration of copyright for litigation others require not even that. This is possibly because it’s the most easily created right- any permanent record of audio, video, words or art is technically subject to copyright. Significantly, this includes computer software in most jurisdictions. The USA has provisions for patenting software which meets its’ requirements because of the comparatively expansive patent regime, but most software still comes under copyright protection. Copyright terms vary between jurisdictions, but generally lasts at least fifty years from the date of death of the author. It may go higher than that, and terms can vary greatly. For example, US laws have made it so that legal entities can own copyright for a period of 120 years from the date of publication. Copyright, while technically a national right, also has an effective global reach due to the provisions of the Berne Convention.
Designs combine functionality and aesthetics- the IP right is granted for a limited terms and concerns the shape and decoration of functional objects. It’s also granted for a limited term (starting with 10 years), and requires more documentation than Trademarks but not as much as Patents. A design patent can complement both Trademarks and Patents, allowing for a visually distinct product that helps with the company’s reputation.
The Global IP Regime
While individual IP grants are national in scope, global treaties mean that the regime is, while not entirely the same, at least subject to the same bare minimum requirements (stated above) in most jurisdictions. This is particularly useful for IP, because ideas are not exactly constrained by geographical distance. The most significant global treaty is the WTO’s TRIPS (Trade-Related Aspects of Intellectual Property Rights) Agreement, which prescribes these minimum standards for all signatories. TRIPS also requires that signatories assent to the standards prescribed in earlier IP conventions like the Paris Convention (Patents, Designs) and the Berne Convention (Copyright). An effect of this is the formation of globalized application options, as IP rights are still nationally constrained. The PCT and Paris Convention routes are available to patent applicants, while the Madrid Protocol and the Hague Agreement can be used to apply for Trademarks and Designs in multiple jurisdictions simultaneously.
Once a company has identified the IP in their product, it can start to plan for maximum utilization of the assets it possesses and (in some cases) may possess in the future.
Author: Varsha Valsaraj, Legal Associate at PA Legal.
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