Start-ups create their business from developing an initial idea into a product or service. The business’ success relies heavily on how well and how sustainable that idea can be commercialized and protected. It is important to know, that mere ideas and concepts cannot be easily protected from copy cats and that therefore it is essential to protect any emerging products and services with the appropriate intellectual property right.
Step One: Identify your IP
There is a closed set of intellectual property rights (“IP“) available. There are rights which require going through a registration process as set forth in trademark law, patent law and design law and there are unregistered intellectual property rights as set forth by copyright law.
Products and services resulting from the same idea or concept are likely protectable by one or more of these intellectual property rights. It is therefore essential to have procedures in place from the beginning which allow the categorization of any emerging work result into a one of these IP categories.
A trademark is a registered sign used in the market to identify your goods or services distinguish them from goods or services of other companies. Your trademark can but does not have to be identical to your company name. Based on a registered trademark, you can prohibit third parties from using an identical or confusingly similar sign for the same or similar goods or services. Trademark protection is geographically limited to those countries in which the trademark is registered.
In principle, the first-come-first-served principle applies, i.e. the trademark right belongs to the person who applied for the trademark first. Proprietors of older trademarks may oppose the registration of new trademarks which are identical or similar and thus create a likelihood of confusion, file an opposition or request cancellation from the trade mark register by means of an action for cancellation. It is therefore advisable to clarify before filing a trademark application whether older conflicting trademarks are already registered.
Trademark protection is granted for 10 years and the trademark can then be renewed indefinitely for subsequent 10 year periods. Upon completion of the trademark application process, the trademark can be marked with the ®sign. The use of this sign on unregistered marks is considered misleading and prohibited by the Federal Act on Unfair Competition.
In the context of trademark protection, it is also advisable not to forget related registrations such as domain name and social media handles.
A patent can cover a product or process that a patentable invention, i.e. a technical solution to a problem. The innovation must be new, i.e. not yet known to the public and not part of the existing state of the art. In order to safeguard the novelty requirement, it is extremely important to register an innovation as a patent before making it public. Patent protection is generally granted for 20 years and (with some exceptions) cannot be extended or renewed.
When an invention emerges that may be patentable, it is essential to seek advice from a patent expert as soon as possible.
Design protection can be sought for products or parts thereof. A design protects the composition of lines, surfaces, contours or colours or by the material used. Similarly to a patent, a design must be new, i.e. yet unknown to the public, and must not be determined solely by the function of an object.
A design is registered for an initial period of 5 years. Subsequently, the registration can be extended four times for a further 5 years, i.e. for a maximum of 25 years.
Any work product conceivable (text, picture, foto, software code) is protected by copyright as of its creation, provided the minimum threshold of originality is met. Copyright vests in the natural person creating the work. It can be marked with a © mark but this is not a requirement for copyright protection.
Step Two: Secure Ownership of your IP
Common problems for start-ups are that they may have created IP before the start-up company is founded or that they outsource certain research and development activities to other companies or freelancers.
It is vital to have appropriate agreements in place which ensure that the company IP is actually owned by the company. This means:
IP created before the company has been founded should be assigned as soon as the company is registered in the commercial register. Any financial arrangements related thereto should be checked with a tax expert to avoid any undesired taxation.
Employment contracts as well as contracts with third parties must contain a clear and comprehensive IP assignment clause.
Step Three: Manage your IP
Many companies make the mistake of thinking that once their IP rights are registered, they can relax and go about their daily business. This is not the case. In order to develop your IP into strong and sustainable assets, IP rights need to be fostered and cared for. It is, for example, important to monitor any activities which could lead to a conflict and invalidate one’s own IP. Trademark, patent and design registers should be monitored to make sure that potentially conflicting registrations can be opposed. The entries in the IP registers should be kept up to date at all times and any changes in name, address or ownership should be recorded in the relevant register without delay. Further, any use of IP rights should be documented as proof for possible later conflicts and claims.