How Are Startups Affected By the IP Regime?

Introduction

Novel ventures have always been an important part of the business market. In today’s world, many youths look forward to have their own startup, which in turn creates a strong and positive impacts in the market. Startups and new ventures revitalize the economy, potentially redistributing wealth across class lines and leading to a fairer, more competitive market. This is enhanced by the technology-drive market of today, where even enterprises with few physical resources can leverage their intellectual properties for profit.

Intellectual Property laws is still an area of emerging law. These laws are considered to be one of the top legal supports for developing a business or building a start-up. IP was established to protect the creativity of a person for a certain period of time. It helps the startups to develop their innovations without fear of infringement or external misuse. As both technology and media progress and we constantly change the way we interact with intangible property, the need for more specific and clear IP laws increase. As a consequence, new rules and precedents are being established. Some of this even explicitly addresses the role of startups in the IP market, by providing concessions and special privileges.

concept, ideas, intellectual property

How does IP affect the Startup Environment?

Intellectual property laws basically consist of various laws such as copyright, trademark, patent, designs, etc. that helps in providing a legal support to the startups. A startup usually possesses various types of IP- logo, designs, technology, creativity of products, etc. that need to be protected. These ideas are precious and can be misused if not protected legally. These current laws provide exclusive rights to the owner of the startups. IP protection provides a number of advantages:

Firstly, IP helps in legal protection. The establishment of IP laws was mainly to protect the creativity and innovation of a person in a legal way so that the idea cannot be misused by any other person in the public. This is particularly significant for startups, as intellectual capital can be major part of what makes them tick. Also, it helps in attracting customers toward the startups or business as the legal protection provides a degree of comfort and confidence to them.

Second, it adds value to the business. IP, particularly, transferable IP, increases the market value of a startup and creates a strong economical position in the market. Adding business value to a startup helps in developing the startup grow effectively in the market, invest in future research and essentially become more efficient and successful.

Thirdly, it establishes exclusive rights. IP laws laws not only help in protection and innovation but it also in providing exclusive rights to the owner of that particular invention. These laws help people control their idea from being misused by other person and these rights help the owner to proceed with legal action if the creativity or the inventions are being copied.

Finally, IP creates a competitive environment. Startups obtaining a legal protection under IP laws are more likely to gain more competitors and cause more competition in the market. Competition is crucial for the healthy development of any free market, as can be seen from how anti-trust and anti-competition laws are  

Government Recognition of IP

The importance of IP, as mentioned before, has not only been recognized by investors and innovators- it has also gained advocates from the government. India has been focusing on IP laws ever since its TRIPs obligations came due, but it’s only recently that the country has focused more on how startups in particular are influenced by IP. Accordingly, many recently made laws have facilitated IP registration for startups.

If an invention or a creation is not registered under IP laws then the owner will not be able to file a legal proceeding if the invention is being is misused. This is particularly significant in case of patents, where the first to file system means that your competitor may be able to claim rights over your invention if you’re not vigilant. Indian laws have made a lot of IP registration easier, with provisions for e-filing and the cutting down of paperwork. All IP acts also recognize startups as a separate class of applicant and gives them corresponding advantages so long as the relevant certification is submitted.

The registration of startups under Intellectual property laws and the legal support provided under these laws are not expensive as compared to other sectors in the legal field. While it is one of the emerging laws in the business development, it is relatively budget-friendly. The one exception is patents, where the filing costs may be low but the drafting costs tend to pile up a little.

Conclusion

The various sectors of intellectual property laws help the startups to choosing the category under which they want to protect their intangible investments. At times, the startups need the legal support of a single type of IP, and at other times a collection of IP laws may be required. There are, as enumerated, many advantages to IP protection for startups. Therefore, it is always advisable for them to obtain for legal protection under existing IP laws.

Author: Shwetlana Behera, Legal Intern at PA Legal.

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