In today’s fast-paced digital business world, intellectual property rights (IPR) have become increasingly important for startups to protect their innovative ideas and creations and to stand out in the crowded marketplace. IPR refers to the legal rights granted to individuals or businesses over their intellectual property, including patents, trademarks, copyrights, and trade secrets. Protecting their innovative ideas, brands and creations is crucial for startups to gain a competitive advantage and succeed in the long run. It saves businesses from legal disputes and protects their interests. Intellectual property rights (IPR) are vital to safeguarding a startup’s intellectual property, including patents, trademarks, copyrights, and trade secrets. In this blog, we will discuss the importance of IPR for startups and businesses.
- Protection of Ideas, Brands, and Innovation:
The protection of ideas, Brands and innovation is the most critical aspect of IPR for startups. It is crucial for startups to apply for Trademarks, Copyrights and Patents to protect intangibles at the same time publicly providing notice to other businesses or individuals to avoid copying or infringing on your intellectual property rights. It is important that the application for obtaining Trademarks, Copyrights and Patents must be properly made and applied. Businesses rely heavily on innovation to create unique products and services that differentiate them from their competitors. Therefore, protecting their innovative ideas and creations with IPR can prevent others from copying or stealing them, allowing businesses to maintain innovation and brand value.
The recent judgment by the Delhi High Court in the case of Koninklijke Philips Electronics N.V. vs. Rajesh Bansal & Ors. and Koninklijke Philips Electronics N.V. vs. Bhagirathi Electronics & Ors., highlights this importance. Being one of the first Standard Essential Patent (SEP) holders, the Koninklijke Philips Electronics N.V. (Philips) initiated SEP litigation in India, and secured a major victory claimed to be the first ever ‘post-trial’ judgment in such litigations. The court held that the defendants had infringed Philips’ patent on a “unique electrical connector” used in LED lights. The court found that the defendants had copied the design without obtaining the necessary license from Philips, leading to a violation of Philips ‘intellectual property rights’.
- Value Addition to Startup:
The importance of IPR for startups is not limited to protecting their intellectual property but also adding value to their business. In array of judgments across India, it has been held by various courts that trademarks have immense commercial value and contribute significantly to the goodwill of a business. In many instances, the courts have ordered the defendant to pay a substantial amount in damages to the plaintiff for infringing their trademark, which emphasizes the value of trademarks in establishing and growing a business.
Businesses and startups having IPR can add significant value to their organization, especially when seeking funding from investors or potential buyers. Investors and buyers are more likely to invest in or acquire startups that have protected their intellectual property, as it provides them with a sense of security and protection.
- Monetization of Intellectual Property:
In addition to securing rights and providing safeguards against infringement, the Startups and Businesses can monetize their intellectual property by licensing or selling their patents, trademarks, and copyrights to others. This will generate revenue for the startup, helping them to grow and expand their business. The courts have recognized that a businesses’ trademark is a valuable asset that can be monetized by licensing it to third parties. In some instance the courts have also ordered the defendant to pay a royalty to the plaintiff for using their trademark, emphasizing the commercial value of intellectual property rights.
At this time of intense global debate, India is in the process of forming the jurisprudence on FRAND disputes that is Reasonable and non-discriminatory (RAND) terms, also known as fair, reasonable, and non-discriminatory (FRAND) terms. Likewise some critical issues, pertaining to an IPR litigations like F/RAND, End-User Licensing Agreement (EULA) are yet to be well defined and become industry norm.
- Legal Recourse:
IPR can provide startups with legal recourse in the event of infringement. If a business’s intellectual property is infringed upon, they can take legal action against the infringing party, seeking damages and/or an injunction to prevent further infringement.
In various recent judgments, the Courts have even held that an online marketplace can be held liable for trademark infringement if it fails to take down infringing content after receiving a complaint from the trademark owner. The court held that the marketplace has a duty to ensure that infringing content is not displayed on their platform, highlighting the importance of IPR in protecting a startup’s intellectual property.
5. Competitive Advantage:
Businesses having well protected intellectual property can provide safeguards with a competitive advantage in the marketplace. It can prevent competitors from copying or stealing their ideas, allowing the startup to differentiate itself from others and attract customers. In a judgment of Seven Towns Ltd & Anr vs M/S Kiddiland & Anr, the Delhi High Court held that the defendant’s use of a similar trade dress to the plaintiff’s was likely to cause confusion among customers and dilute the plaintiff’s trademark. The courts have emphasized the importance of protecting a startup’s intellectual property to maintain a competitive advantage and avoid confusion among customers especially when pertaining to similar or identical labels, packaging, or offering, in the case of passing off or infringement.
In conclusion, protecting intellectual property is crucial for startups to succeed in today’s competitive business environment. It can help startups to maintain their competitive advantage, add value to their business, monetize their intellectual property, provide legal recourse in the event of infringement, and provide a competitive advantage. Therefore, startups and businesses should prioritize protecting their intellectual property through IPR to ensure their long-term success.