MANAGING INTELLECTUAL PROPERTY IN EARLY STAGE START-UPS

In the dynamic and competitive environment of start-ups, intellectual property plays a key role in securing innovation and protecting investments. These young companies often rely on innovative ideas and cutting-edge technologies to differentiate themselves in the market and gain competitive advantage. In this context, industrial property rights assume crucial importance, allowing start-ups to protect their intellectual and exclusive assets, such as patents, trademarks and designs. This protection not only ensures the value of their creations, but can also be instrumental in attracting investment and strategic partnerships. Thus, the proper management of intellectual property becomes a key element in the growth and success strategy of start-ups.

The main forms of intellectual and industrial property protection:

Intellectual property protection is crucial for start-ups, as it ensures the protection of their innovations and the valorisation of their intangible assets. The most common forms of protection include:

• Patents: These give the holder the exclusive right to exploit an invention for a fixed period, usually 20 years. Patents can be assigned to process, product or design inventions.
• Copyright: This protects literary, artistic and creative works such as books, music, films, software and other original works. It grants the creator the exclusive right to reproduce, distribute and commercially exploit the work.
• Trade marks: Trade marks identify and distinguish a company’s products or services from those of its competitors. They can take forms such as distinctive words, logos, slogans or sounds and protect a company’s identity and reputation.
• Industrial designs: These protect the aesthetic or ornamental appearance of a product, such as shape, colours, contours or texture. They are used to protect the visual appearance of products, such as clothing, furniture or jewellery.
• Trade secrets: These include confidential information, such as formulas, processes, marketing strategies or customers, that give a company a competitive advantage. Protecting trade secrets involves keeping them confidential and taking security measures, including through confidentiality agreements, to prevent their unauthorised disclosure.

These forms of protection allow start-ups to protect and enhance their creations, ensuring competitive advantage and sustainability in the market.

The importance of the Innovation Plan and how to realise it:

The Innovation Plan is a crucial element in the journey of start-ups as it not only maximises the value of intellectual property, but also effectively manages the risks associated with its infringement. This strategic plan involves a series of methodical and articulated steps:

1. Identification of innovative assets: The first step is to list all innovations developed by the company, including know-how and brands. Very often, especially in early stage start-ups, founders make use of the services of third parties which, however, are not regularised with contracts containing clauses on the transfer of the intellectual property developed, leaving the ownership of the same in the hands of third parties and not the start-up. The process of identifying assets can also be facilitated, not only through the assistance of consultants experienced in the protection of IP assets, but also through the implementation of IP courses for employees and the establishment of an effective communication path between the people who realise innovation and the decision makers. In addition, it could be useful to set up a reward system of incentives to encourage innovation to go alongside the more classic deterrent system, characterised by the provision of confidentiality agreements (Non Disclosure Agreements or NDAs) to be signed by employees, collaborators and strategic partners.
2. Establish protection priorities: As IP protection can be costly, it is essential to carefully select the assets to be protected. For each technology or innovation, a decision must be made whether it is better to file a patent application, keep the invention secret and protect it through NDAs or publish it. This decision should be based on a detailed assessment of the following factors:

• Uniqueness: Assess the likelihood of a patent application being granted through an analysis of prior art and patentability requirements, such as novelty, inventive step and industrial application.
• Distinctiveness: Check whether infringement can be easily detected, especially in the case of software, to determine whether patenting is the best solution.
• Possible alternatives on the market: Examine whether the patent protects the best method of making a successful product, making imitation by competitors impossible.
• Product value: Assess how much the invention contributes to the overall development of the product and how strategic it is for the company’s business.

Overall assessment: The final decision on which assets to protect should be the result of an overall assessment, which is not based on a predefined score, but on a weighted analysis of the factors listed above. The objective is to create an effective plan that allows the start-up to convert intangible assets into IP, maximising value for the company and minimising the risks of infringement and litigation. 

Such an activity, if carried out efficiently and without wasting resources, brings with it the positive advantage of attracting investors and strategic partnerships that can provide funds and business opportunities to the start-up. We will discuss this issue in one of our next articles.