Intellectual Property after Covid-19 - An entrepreneur perspective

The thrust on intellectual property in the Covid-19 era has been impactful. The main challenge during this pandemic was not access to vaccines, treatments, or cures for COVID-19, but the absence of any approved vaccines, treatments, or cures. It is for this reason that the global pandemic has impacted the economy severely.

Since a strong economy has a strong IP environment, if an economy suffers, IP also suffers. The impact is felt across all levels and sectors of the business industry, and massively on trade and development.

In today’s competitive world, it becomes a challenge for businesses to cope up with the huge demand and supply of goods & services in the market.

Every business strives to create innovative products and services having greater value than its competitors. To achieve success businesses rely on innovation that reduces cost and improve product quality.

Protecting Startup Businesses through IPR

The most important consideration for a startup business is its Intellectual Property (IP). To formulate key strategies for a startup, it is necessary to protect the IP, as a startup gets a large portion of the estimation from their Intellectual Property Rights. Over 80% of the estimation of a new business depends on its IP portfolio. Registration of Intellectual Property accords stronger protection to the businesses.

Benefits:

Let's look at some of the benefits of protecting startup businesses through IPR

#1 Protecting Intellectual Property should be a priority for a startup business.

The only real asset that a startup has is its Intellectual Property. IP registration will enhance negotiations with investors and increase the commercial value of the business. Although registration of a trademark and copyright is not mandatory, (unlike patents and designs) it is nevertheless a registered IP Right that carries a greater value and acts as evidence of the use of IP Rights before courts as well as enforcement agencies.

#2 Registration prevents third parties from using innovation and copying products.

This is one of the major reasons that most successful businesses are surviving in competitive markets. However, startups should make careful IP decisions and ensure that they do not violate other companies IP rights. This can be ensured through the due diligence of Intellectual Property. This will also ensure safety from unwarranted litigation which can thwart its business activities.

#3 Businesses and their IP rights must be protected through a portfolio of agreements.

Startups must protect the business and the IP rights through a portfolio of agreements like non-disclosure agreements, agreements with employees or independent contractors or any other agreement as per requirement. It is also advisable to enter into elaborative assignments, licensing or user agreements, or other contractual agreements.

Intellectual Property Rights provide a basis for businesses to:

• Create a strong market presence, brand identity and product differentiation; thus increase the commercial value;
• Increase understanding of technological fields and trends in the market;
• Gain revenues through licensing, franchising, or other IP transactions;
• Obtain strong financing of IP assets having legal protection are valued more;
• Expand business, access, and segment in various geographical markets.
• Engage in business partnerships including R&D, marketing, outsourcing etc;
• Ensure freedom to operate in the competitive market and reduce the risk of infringements;

Government’s initiatives to increasing innovation & IPR

Department of Electronics and Information Technology (DeitY) has always acknowledged the R&D and promotion of innovation as an integral part of the Electronics & ICT ecosystem and has established a dedicated division for IPR support. Some of the major initiatives of the division are:

• Providing Financial Support to Startups and SMEs
• IPR Awareness through digital media and Financial Support to Industry Bodies and Academia
• Providing services pertaining to IP like Prior Art Search and Help-Desk services to boost IP creation.
• Launch IPR Tools, Products and Technologies
• Collaborations with international bodies

With the vision to protect IPR’s for startups, the Government has also launched a scheme, Startups Intellectual Property Protection (SIPP) for encouraging innovation and creativity of Startups.

Efforts are also made to ease out the IP filing process. The startups are given an 80% rebate on Patent filing fees and a facility for expedited examination of patent applications.

Under the new Trademark Rules, Startups have been given a 50% rebate in filing fees vis-à-vis other companies. Considering the present situation, almost all the IP offices from across the countries including India, the US and the EU have extended the deadlines for filing trademarks and patents applications.

Industrial Designs- Registration

As defined under Section 2 (d) of the Designs Act 2000[1], the design includes an original unfinished article appealing to the eye, and not to prior published or publicly known in India.

Unlike trademarks, the Statutory and exclusive right to prevent others from producing, importing, selling, distributing, or using the products having an identical appearance or a fraudulent or are an obvious imitation of your design, accrues only to the registered design owner. Registering a design provides a unique selling point to the owner and ensures a fair return on investment.

How will New Design Rules benefit Startups/Small entities?

The new design amendment rules 2021, recognize startup as a ‘separate category of Applicant’ under section 2(eb) as—

“(a) an entity in India recognized as a startup by the competent authority under Startup India initiative; and

(b) in case of a foreign entity, an entity fulfilling the criteria for turnover and period of incorporation or registration as per Startup India Initiative and submitting a declaration to that effect.”

The rules have also reduced the overall filing and prosecution fees for small entities. The Rules also explains that in case a startup/small entity ceases to be a startup, the difference amount shall not be payable. This also includes a change in the status of the startup due to lapse of the period during which it is recognized, or its turnover crossing the financial threshold limit.

Conclusion - IP after Covid-19: A new norm

The severity of the pandemic poses’ questions in the minds of innovators, IP professionals, IP Offices, and related businesses regarding the survival strategy for Intellectual Property in these times and ahead.

The Indian IP system establishes and maintains a fine balance on one hand between private rights through IPRs, and on the other hand, rights of the society as the public interest.

The TRIPS Agreement has granted policy space to countries to evolve a legal regime, the sine qua non for the sustainable development of the country.

Intellectual Property as a driver of innovation and plays a central role in the technologically advanced economy.

Providing an incentive framework to encourage innovation through various stages from invention to commercial product or service, is one of the main roles of IP.

Governments should first identify the obstacles for effective and efficient management of crisis between the health, human welfare and safety and then analyze the existing laws to modify with the current scenario.

Public-private partnerships should be encouraged to beat challenges like funding, capacity-building and legal compliance. A conducive environment between companies and the stakeholders should be promoted to enhance the business model and facilitate relationships and transactions between them.

[1] means 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;