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Intellectual Property Portfolio Can Be A Game-Changer For Startups

Intellectual Property Portfolio Can Be A Game-Changer For Startups

Protecting Their Intellectual Property (IP) Is Usually Not The Most Important Aspect In The List Of Startups

Protecting their Intellectual Property (IP) is usually not the most important aspect in the list of budding business – the startups. Energies are usually high but resources could be low. Prioritising becomes important.

Many a time IP is not present in their ideas or even worse is that it is present but not recognized. Neither options are conducive to long plans and scale up as these startup ideas are very vulnerable to being replicated by someone else and can eventually lose their sparkle.

Talking of IP, it can be in the form of patents, if there is a technological aspect to the Startup, but can also be in the form of Trademarks where it concerns niche services without many technical aspects to it. Either way, it could be valuable enough for someone to copy. Trade secrets are also an option if the organization has the knowledge and sophistication to handle them.

It is in the best interests of the business to consider protecting their ideas appropriately at an early stage. This may serve well to keep competitors at bay,   while also serving as tool to potentially securing royalties if the IP can be licensed out.

Appropriate IP protection via patents will not only help establish the uniqueness of the product or solution but also offer a competitive advantage that could last for a term of about 20 years. For a few start-ups, especially in the tech domain, IP protection can be of utmost importance as it helps to raise capital and seek funding assistance.

Why is Intellectual Property Essential For Startups?

Often the Venture Capitalists or any other investor would want to ensure that startups IP is protected before they invest in the idea. Companies in India are rich in their IP assets but do not often formally get it recognized, due to various reasons; however, taking IP seriously can be beneficial in many ways like:

  • The company’s ability to attract innovative employees, vendors and collaborators increases if their IP is protected, this creates a secure environment for all – an environment where no one is scared of losing their efforts to competitors.
  • A secure IP will open up new business options like – outsourcing, technology or IP Licensing, cross-licensing fetching hefty royalties franchises and new ventures.
  • The ability to gain competitive advantage and secure premium prices.
  • The IP behind the product/technology can be sold later if the owner (assignees) of these patent so desire even if the founders decide to focus their attention elsewhere.

The table below, by the American Bar Association, clearly proves that companies with stronger IP assets have higher chances of VC funding, lower probability of bankruptcy and a higher chance of a successful exit through an IPO (Initial Public Offering).

The rising awareness about IP protection and associated benefits are showing a positive impact, as increasingly start-ups are filing for IP protection. Additionally, the governments, Startup India initiative is also providing a slew of benefits to startups like 80% rebate on patent filing, along with fast-track process for patent application.

With an increased awareness and government’s friendly approach towards the startups, the budding business can now push the boundaries of innovation and take India on the global map of Intellectual Property!