THE ROLE OF IP IN STARTUPS: STRATEGIES FOR LEVERAGING INTELLECTUAL PROPERTY FOR GROWTH: EXPLORING HOW STARTUPS CAN UTILIZE INTELLECTUAL PROPERTY TO GAIN A COMPETITIVE ADVANTAGE AND DRIVE GROWTH

INTRODUCTION

IMPORTANCE OF IPR FOR START-UPS

Start-ups have been recognized as power of innovation, ideas and technologies. The government of India has also launched scheme to support the start-ups in India such as the “Start-up India” scheme. A scheme known as SIPP (Scheme for facilitating Start-ups Intellectual Property Protection) has been started by the government to support start-ups with their technologies, innovation by providing them access to IP services and resources.[1] The scheme has been further extended for period of three years i.e. 31^st March 2026. It is applicable to only those start-ups which have been recognized by DPIIT as per the 2019 notification.[2]

The importance of IPR in start-ups cannot be neglected as they provide safeguard to their creativity and innovation. The various kinds IPR protection that can preserve and protect the unique products, ideas, innovation, technologies are Patent, Copyright, trademark etc.

Through Patent protection, start-ups can get exclusive right over a certain period of time on their invention, which is unique and non-obvious. It safeguards their legal rights and give them a competitive edge and commercial advantage. Start-ups having IPR also boost the confidence of investors and can receive huge investment as the robust IP protection strategy shows that the start-ups are committed in protecting their assets.[3] It also serves as a source of generating revenue and they have an edge in the market in respect to other competitors.

BENEFITS THAT START-UPs CAN GET BY TAKING IP PROTECTION

The various benefits start-ups are entitled to if they seek IP protection:

1. It protects their innovation, process or technologies through Patent protection they will have exclusive rights over their innovation and use it for commercial purpose.
2. It also enables the start-ups to further license their IPs to other business, thus act as a source of revenue generation to them as they charge fees for using their IP.
3. It also facilitates easy mergers, amalgamation or collaboration with other business. Having an IP protection ensures that the risk of the assets acquired or merged are less as they have proper legal protection. Therefore, thorough IP due diligence can ensure better investment opportunities and can prevent further legal difficulties in future.
4. It helps gaining the start-ups brand value for their products and it can create differentiation in the minds of public. By taking trademark protection on the company name or logo, the users can easily identify the source of origin of the goods and services thus becomes less chances of deception or being cheated. It builds trust for the consumers.
5. There are many start-up companies that are involved in the development of software, content creation etc copyright protection to their original work such as the code, artistic design, content can protect them from infringement.
6. It also prevents unauthorised and illegal use of their goods and services.

STRATEGIES THAT START-UPS CAN UNDERATKE FOR TAKING IP PROTECTION[4]

It is costly for start-ups to cover all the IP protections as in the initial stage they do not have funds, so the first step the start-ups should undertake is rank the IPRs that are relevant for their operation. This step should be carried out by the start-ups initially to avoid any conflicts in future.

Start ups should get their IPs registered as the registered IP secures more value and can easily be used as a proof in court in case of any dispute. Start-ups are also required to carry out due diligence on the IPs which they are using or proposed to be using them to avoid any law suits in future.

Start-ups at their initial stage have very limited resource. Therefore, they are required to consider their IP Budget. IP Budget to include cost to be incurred on taking the IPR, the legal expenses to be met, which valuable assets to be protected etc. By considering the IP Budget they can easily allocate their limited resources. As they have funding issues in their beginning stage.

Start-ups may not have the expertise to deal with the IPR related matters and the kind of IPR that needs protection, so it suggested that they should take the advice of professionals. They should enter into non-disclosure agreements to protect their trade secrets so that they have an competitive advantage in the market.

CONCLUSION

The protection of intellectual property rights is important for any business to attain a competitive advantage in the market particularly for the start-up companies. The government is providing assistance to these start-ups for IPR protection. So, in order to have a competitive edge in the market and protect their innovation, new ideas it become important to have IPR protection over their valuable assets.

[1] https://ipindia.gov.in/writereaddata/images/pdf/startups_IPRFacilitation_22April2016.pdf

[2] https://www.startupindia.gov.in/content/dam/invest-india/Templates/public/198117.pdf

[3] https://aicontentfy.com/en/blog/importance-of-intellectual-property-protection-in-startups

[4] https://www.jetir.org/papers/JETIR2312093.pdf

Author: Ishika Jain, fifth year law student at Institute Of Law, Nirma University.