For many startup founders, getting day-to-day operations going—product development, marketing, fundraising, and hiring—consumes most of their time. The last thing they need is another issue to think about.
But when team members leave your startup and take valuable IP (intellectual property) along with them, it might be prudent to pause and consider the issues of IP.
In this article, I collated a list of questions from the Tech in Asia Community about IP and asked Trina Ha, director of the legal department of the Intellectual Property Office of Singapore (IPOS), for her insights.
What is IP? What falls under this, especially for a young tech startup?
“IPs are creations that are recognized and protected by law and include registrable rights such as trademarks, patents, and industrial designs, and non-registrable rights such as confidential information, trade secrets, and copyright.
“Generally, the law grants the creator exclusive rights for a specific duration. This means that during the period of protection, you can exploit your IP for commercial gain while preventing others from using it without your permission.
“For tech startups, common forms of IP would be copyright (e.g. a software program or website content), patents (e.g. innovative products or processes), confidential information or trade secrets (e.g. source codes, business plans, consumer databases), and trademarks (e.g. the company name or logo). There may also be registered design protection in the graphical user interface of an app if it is sufficiently novel.”
Why create an IP? Wouldn’t you be showing everyone your secret?
“All companies, whether a startup or a matured business, already have created some form of IP in their inventions, products, or services. IP is increasingly recognized as an invaluable business asset. It is essential for all businesses to understand how to protect and manage its IP to get the best possible commercial results.
“Startups that know how to utilize their IP and put in place an IP strategy that is aligned with their company’s business strategies and goals have a strong competitive advantage in the market.
“Applying for a patent does require you to make details of your invention known. However, think of a patent as a trade-off. In exchange for disclosing your invention to the government and the public, you have a monopoly over the invention and the right to prevent others from using or copying it for a substantial amount of time (20 years).
“A startup may choose to protect their IP as a trade secret rather than a patent to save costs and avoid disclosure. This is a possible route if the business is of the view that competitors will not be able to copy or reverse engineer the technology. Do bear in mind that trade secrets have weaker protections than patents.
“For example, it does not allow you to stop competitors that independently develop the same technology from using it.”
At what stage does a startup pay attention to the IP they potentially have?
“Generally speaking, most startups only pay attention to IP after they have attained some market traction or business stability. However, they actually should be looking into IP protection and creating an IP strategy much earlier. Incorporating IP into your business strategies early will prevent future problems and also help ensure sustainable business growth.
“It does not mean that startups should secure all forms of IP protection from the get-go. Understandably, cost is an important consideration for startups. Accordingly, they should first have a good understanding of their industry and competitive landscape, the nature of their business, their short-term and long-term business goals, and identify which are their strategic business and IP assets. This will provide clarity on the types of IP protection they need and when they need it.
“For instance, a brand is a form of IP as it may be registered as a trademark. This can be a powerful business asset if the startup’s offering is targeted at the mass market and will go a long way to differentiate its offering and build customer confidence and loyalty. Brands like Apple, Microsoft, and IBM immediately come to mind.
“IP protection is also more than just about filing applications; it also extends to putting the necessary paperwork and processes in place to ensure the confidentiality of the invention or that you own the IP being created by your contractors. Under Singapore’s Copyright Act and the recently amended Registered Designs Act, a creator of a commissioned work is the default owner in the absence of a contractual provision. Hence, startups should exercise care in managing their contractors’ agreements to ensure IP ownership issues are properly addressed.”
What is the process of protecting an IP in Singapore?
“Our integrated e-service portal, IP2SG, provides innovators and business owners with an efficient registration process. It allows online filing of patents, trademarks, and designs through a single platform.
“Patent applications are more complex, and inventors should seek the professional services of registered patent agents who are experienced in the application process, strategic considerations, and drafting the patent’s claims. Claims define the scope of patent protection and it is important that the claims are drafted properly.
“In Singapore, there is no need to file for registration to obtain copyright protection. Copyright protection is automatic as long as the work is expressed in a tangible form (such as in writing or in a recording). It is a good practice, though, to document proof of authorship in the event of an IP dispute.
“Common methods include making a declaration before a Commissioner of Oaths, stating the facts of ownership and the date of creation or sending a copy of the work by post, leaving the envelope unopened so that the date stamp and unopened envelope serve as evidence of the work’s existence.
“IPOS has established a customer service center, IP101, where one can receive personalized assistance for their IP filing or general IP inquiries.”
What are the estimated costs for different types of IPs?
“Briefly, costs for filing IP protection include the upfront application fee and the subsequent renewal fee. On April 1, 2017, IPOS lowered its application fees for trademark and patent protection to support our innovators and make IP protection more affordable.
“As a guide, the application and renewal fees are briefly summarized in a table.
“The fees shown exclude costs for engaging professional services such as legal or patent agent fees. There are government grant schemes such as SPRING Singapore’s Capability Development Grant (CDG) and IE Singapore’s Global Company Partnership (GCP) available to help businesses defray some of these costs.”
What happens if someone replicates my IP? What rights do I have?
“In the event that you find out that someone is infringing your IP by carrying out any of the exclusive rights you have as the IP owner, there are a number of actions you can take to enforce your rights.
“Aside from starting an action at court, you can consider sending a letter of demand to cease and desist the infringing activity and settling the matter with the infringer by negotiation or mediation. If you do take the dispute to court and win, you can seek monetary compensation for the loss you suffered.”
Does IP registration only protect my rights in Singapore?
“IP registration is jurisdictional in nature. This means that your IP is protected only in the countries where you filed for IP protection.
“Businesses need to ascertain where their key markets or manufacturing bases are and file for IP protection in those countries so that they can enforce their rights against imitators. You may either file in each of these countries or utilize international filing systems such as the Madrid System (for trademarks), Hague System (for designs), and Patent Cooperation Treaty System (for patents).”
Defending your IP is very costly. Is it worth creating an IP if you can’t afford to sue others?
“Yes, IP litigation cases can be very costly. However, the potential revenue losses, reputational damage, and loss of market share from such infringing activities can be significant too. Hence, startups are encouraged to obtain IP protection for their key IP assets, as it provides a measure of deterrence to potential infringers.
“The Ministry of Law and IPOS are currently considering how the IP dispute resolution system in Singapore can be improved to help smaller businesses and startups find a less costly way to enforce their IP rights.
“Meanwhile, bringing an action in court is not the only avenue to resolve IP disputes. Mediation is an alternative mechanism which is less costly and less time-consuming.
“IPOS introduced an IP Meditation Promotion Scheme in April 2016. Under this scheme, IPOS will fund parties who opt for mediation up to US$4,000 (S$5,500) per case. Parties may appoint a mediation institution of their choice, such as the WIPO Arbitration and Mediation Center or the Singapore Mediation Center.”
This is the seventeenth article of the “Startup Advisory Clinic” series.
Converted from Singapore dollars. Rate: US$1 = S$ 1.39.
This article first appeared on Tech in Asia.