IPR in Startups in India

“If a man is keeping an idea to himself, and that idea is taken by stealth or trickery-I say it is stealing. But once a man has revealed his idea to others, it is no longer his alone. It belongs to the world”
- Linda Sue Park

INTELLECTUAL CAPITAL

Any given business initiative or a startup generally mechanize a comprehensive plan to create a protective regime in the vividly-competitive market. It is important to create this plan it enables a promoter or a creator with the power to claim exclusive rights on the Uniqueness or on the innovation that has been mechanized. In other words, the task of this plan is to safeguard the “intellectual capital” of any given startup.

An intellectual capital is defined as the asset of a business entity which can be used for making profits, attracting customers, creating a new product, enhancing existing product or improve business. It is evident that before the “starting the startup”, a plan has to be executed to protect the intellectual capital through Intellectual Property Rights. IPR gives a comprehensive set of legislations to safeguard the startups from becoming victim to the competition posed by other entities.

The above plan is a composite mixture of trade-name, name and logo of the brand, inventions, UPS, product-design, or a website and its allied mechanics. Once the above fundamentals are distinguished they play a decisive factor in creating a right business structure to differentiate a startup from the competitors, and hence protected by the IPR Regime.

In India, the IPR Regime consists of a cluster of legislations that protect the intellectual capital of a startup or any other business organization. The cluster consists of:

• The Patents Acts, 1970
• The (Indian) Copyrights Act, 1957
• The (Indian) Designs Act, 2000
• The Trade Marks Act, 1999

All the above legislation, given above, is decisive in providing a sound legal framework to newly established startups. These legislations have a specialized function in governing and protecting the intellectual capital of a newly built startup.

PATENTS ACT

The Patents Act, 1970 protects the very aspect of any given startup, i.e. the product itself. The unique product, that a startup offers, has to be protected by the patents act. In case if the idea of the product is new, unique and has a different mechanics then it is subjected to be gone through registration under Patents Act in order to have a protective framework against the competitive market . However, Chapter II of the Patents Act provides certain restrictions or states some kind of inventions that are not deemed to be patented through the virtue of the Act.

COPYRIGHTS ACT

Furthermore, The Indian Copyrights Act, 1957 protects the ideas of any given startup capable of being expressed in artistic work, writings, video-graphic representation, etc. It is to be noted that section 14 of the act provides for a comprehensive meaning to the word “copyright”. It can be noted that websites/ applications/ software forms essential part of any given startup, therefore, special care and attention is required to be given towards their protection. The copyright act, in that regards, give protection to the ideas and expression that has been used by a startup. A copyright is generally denoted by © sign, and thereby acts as a symbol of legal protection. Therefore, copyrights act also extends protection to the mechanics or works used by the startups to function without the threat of a competitive market.

DESIGNS ACT

One of the aesthetic aspects of the Indian IPR Regime is the presence of Indian Designs Act, 2000 that helps to protect the materialistic or the physical aspect of the startups. Design, as defined under section 2(d) of the act, through its meaning defines the physical aspects like designs, patterns, shapes, colors, etc.

“only the features of shape, configuration, pattern, ornament or composition of lines or colours applied to any article whether in two dimensional or three dimensional or in both forms, by any industrial process or means, whether manual, mechanical or chemical, separate or combined, which in the finished article appeal to and are judged solely by the eye.”

Features of shape, configuration, pattern, ornament or composition of lines or colours applied to any article, whether in two dimensional or three dimensional or in both forms, can be registered under the Act. However, functional aspects of a design are not subjected to protection under the act.

In Anuradha Doval v. The Controller Of Patents And Designs & Ors, the court hold that in order to claim novelty, there has to be a significant change or difference in the design, although, it may have a common source.

Therefore, a startups must be cautious of the designs being very much distinct then the designs that are already pre-existing.

TRADE MARKS ACT

Just like the above legislations, Trademarks Act 1999 also extends its protection to a new startup. A trademark is defined under Section 2 (zb), wherein it is “a mark capable of being represented graphically and which is capable of distinguishing the goods or services of one person from those of others and may include shape of goods, their packaging and combination of colour.” Accordingly, any mark used by the startup in the trade or business in any form, for distinguishing itself from other, can qualify as trademark. Therefore, the logos or symbols used to represent the startup or any of its allied elements, in the intellectual capital, can be registered under the trademarks act. ® symbol is used to determine a registered trademark. Moreover, in many instance ™ is also used to indicate a trademarked product.

IS IT REALLY NECESSARY FOR STARTUPS TO BE ABIDED BY THE REGIME OF IPR?

However, it is nowhere mandated that the abidance of the IPR regime is not necessary but each startup tends to follow the above regime, in order to not to be fallen victim of the competitive markets.

While it is already established that IPR Regime provides for protection to the startups. The protection in this regards is of legal factor. Therefore, any infringement occurring on the startups, IPR Regime lets a startup institute a case against such infringements.

Most of the time, startups tend to make haste while opening their operations, and forget to plan out and mechanize their IPR plans. This should not be done as the competitors can take due advantage of their ideas and brand values, and may patent them first in their own name. Therefore, startup is one such activity which can’t be simply instituted without deep planning.

Another aspect that can’t be ignored is that a startup is totally governed with two primary motives, viz. earning profits and functioning in the long run. Now to ensure a long run, uniqueness in the brand name and USPs are cardinal factors. Therefore, to protect those through IPR regime, a long run for a startup can be rightly envisaged.
It is pertinent to note that investors are ready to invest in start-ups that have a well established IPR framework. Investors also think of the long-run, therefore, any given startup which is seeking financial assistance from another entity should equip with a healthy IPR Regime to attract the most secure investors. Moreover, the above steps do make startups potentially ready for competing with industry giants.

It is to be noted that going through the IPR regime might be costly to a startup but the protection that it provides can’t be matched by any other means. Moreover, the above practice booms the brand-value and financial perspective of the startups.

In many countries, where there are SEZs and other economic zones or frameworks, startups find it easier to run due to the governmental policies and the atmosphere that these policies provide are the ones that can’t be ignored. For instance, in India many such startups are subjected to be fallen under the framework of economic initiatives like Startup India, Make in India, etc.

Startup India is one of the few initiatives in India that is totally aligned towards giving all the startups in India, an economically fit atmosphere to work. This initiative was forwarded by the government of India as an action plan to achieve target in three key areas of ‘simplification and handholding’, ‘funding support and incentives’, and ‘industry-academia partnerships and incubation’. The initiative was a success as it gave a holistic boom to the economy of India. The initiative recorded 4.7 Lakh jobs reported by more than 39,000 of startups across India. Moreover, investments of Rs. 4509 Cr. were availed by the virtue of the initiative.

Therefore, sometimes in order to avail such government incentives and economic atmospheres, startups need to be well equipped with IPR framework.

One of the most deterrent impacts on small startups could be getting engulfed by the big players in the competitive markets. Therefore, IPR Regime also ensures that the competitive world doesn’t lead to compromising of small startups.

Another aspect that IPRs bring is customer satisfaction. All the business have tendency to work to provide the best of the customer satisfaction and serve the society in order to retain its goodwill in the public. Therefore, IPRs play a crucial role in keeping that goodwill intact, and at the same time keeping the integrity of the startups with the customers for the long-run.

CONCLUSION

In the light of the above reasons it can be stated that in this growing reign of innovations and startups, the competition in the market, and the global economy, is growing at a constant speed. The startups generally aim for profit earning and playing the long game in the market. Therefore, it is advisable for every startup to build a comprehensive plan pertinent to the framework of IPR.

The framework, pertinent to Indian IPR, generally revolves around Patents Act, Trade Marks Act, Designs Act, and Copyrights Act. A startup has to undergo a plan to determine the framework for the long run.

These above legislations tend to provide many other aids like suing of cases, creating a base for institutional investors, protecting the goodwill of the startups, ensuring customer satisfaction in the long run, ensuring good market of goods and services, protecting against the big players in the market etc. Hence, IPR in startups is an essential ingredient as it solely looks out for the survival of the startups for a long time.