Are you about to launch a start-up? If so, what intellectual property (IP) do you have and how is it protected?
Whilst this probably isn’t the most exciting topic of conversation when starting a new business venture, it’s essential to consider as these will be among the first questions investors will ask of you.
Below are five tips to keep you on top of your IP, and help your budding business retain the commercial value of its IP in order to continue to attract investors.
1. Know your assets
What exactly is IP? IP is a valuable asset that distinguishes your business from your competitors. It can be a brand, logo, invention, design or the practical application of an idea. An important first step for every business owner is to identify his or her IP. Below are the four most common types of IP:
A common mistake that people often make when starting out is to overlook what could be potentially valuable IP. If you’re unsure, talk to an IP lawyer – a specialist who’ll be able to tell you what you have and assist you with conducting an IP audit.
For more information about IP, visit the IP Australia website at: https://www.ipaustralia.gov.au
2. Know your protection options
If you think that registering your business name and having a trading history is enough to protect your IP, you’re wrong. You need to take steps to protect it.
IP falls into two categories: registrable and non-registrable. Knowing if you can protect your IP and what steps to take are essential to your business avoiding unnecessary and expensive legal action.
Have an IP lawyer conduct a search for you through IP Australia, the Australian Government intellectual property office to determine if you have the right to use your IP, and most importantly, take steps to protect it – preferably before you start doing business.
Don’t make the mistake of failing to protect your IP because your business is a start-up and you’d rather invest your money on other things like promotion. You’ll regret it if you don’t register your rights because IP registration systems in Australia are priority based and therefore it works on a ‘first-in-best-dressed’ basis. You don’t want your competitors getting an advantage and stealing your ideas before you get a chance to protect them. Imagine trying to justify relevant legal expenses to your new investors!
3. Know how to keep it confidential
Does your new business have an internal trade secret and ‘confidential information’ protection policy? You need to remember to keep your ideas confidential until you have taken steps to protect them. If disclosed, their registrable status could either be at risk of being compromised or stolen by competitors. Once an idea is out there, you can’t bring it in again!
4. Know that you own it
Without some additional safeguards in place, the next time a disgruntled departing employee walks out the door he or she may also walk out with your valuable IP. Make sure your employees sign IP assignment agreements, or have relevant provisions documented in employment agreements. If you are hiring independent contractors, it’s a good idea to get a written assignment of the IP they create for your business. It’s also worth having clear agreements in place to ensure you retain ownership of your IP when licensing your IP. Again, consider consulting with an IP lawyer who can help you with all of the nuances of commercial agreements to help you retain control of your IP.
5. Know the marketplace
Keep an eye out for copycats. As the owner of IP rights, it is your responsibility to police your rights and take action to prevent others from infringing them.
The actions that can be taken against a person who infringes your rights and the legal remedies, which can be ordered by a court, are set out in legislation. Each type of IP right has its own legislation. If you believe consumers are being misled, there may also be action which can be taken under the Australian Consumer Law or common law for passing off. If you suspect your rights are being infringed, seek the assistance of an IP lawyer to advise the steps you should take. You need to act swiftly as a court will not take kindly to an applicant that sits on his/her hands.
It’s a good idea to have an enforcement policy in place that requires the maintenance of records of the IP you own, as well details regarding the conduct of the infringing party and any evidence of confusion in the marketplace? If you need to take action, maintaining these records will help prove your case.
Going back to my first point, it is essential that you know your IP rights. Knowledge of your IP will help to enforce your IP rights and in turn, retain their commercial value and continue to attract investors.