INTELLECTUAL PROPERTY LAW FOR STARTUPS

INTELLECTUAL PROPERTY

Wherever we go, we are surrounded by intellectual property. Intellectual property defines and protects human innovations and creations.

Startup’s assets may be broadly divided into two categories:

  • Physical assets – including buildings, financial assets and infrastructure;
  • Intangible assets – like know-how, ideas, brands, designs and other intangible fruits of a startup’s creative and innovative capacity.

Traditionally, physical assets have been responsible for the main bulk of value in the company. In recent years, the situation changed significantly. Intangible assets are often becoming more valuable than their physical assets.

INTELLECTUAL PROPERTY

Intellectual property (IP) refers to every example of human creativity, such as:

  • inventions;
  • literary and artistic works;
  • designs;
  • symbols, names;
  • technology;
  • images used in commerce.

 

INTELLECTUAL PROPERTY LAW

Intellectual property law is most commonly used for:

  • copyright law
  • industrial property law
  • trade secrets.

 

The main difference between copyright law and industrial property law is: protection given by copyright law is free and automatic, it begins at the moment of creation. Protection given by industrial property law is paid for and requires prior registration.

COPYRIGHT LAW

Copyright law (or author’s right) is a legal term used to describe the rights that creators have over their literary and artistic works. What is protected by copyright under Polish law?

  • every example of human creativity (ideas are not protected by copyright law),
  • irrespective of artistic value, purpose or form,
  • without the need to register (by default).

Copyright protection extends only to something what is real and not extends to pure ideas, procedures, method.

COPYRIGHT LAW

There are two types of rights under copyright:

  • economic rights, which allow the rights owner to receive financial reward from the use of his works by others; and duration of the economic rights finish 70 years after death of author.
  • moral rights, which protects the non-economic interests of the author. Moral rights are not limited in time and last indefinitely.

Protection given by copyright law allows you to demand your rights (for example claim to stop the infringement of your rights).

COPYRIGHT LAW

Sunflowers (1888) Vincent van Gogh

INDUSTRIAL PROPERTY

Industrial property law is paid and requires prior registration.​

What falls into the category of industrial property in Poland?

  • patent
  • utility model
  • trademark
  • industrial design

 

These intangible property rights are protected under the Industrial Property Law of June 30, 2000.

 

TRADEMARK

Trademark is a graphic representation, such as a sign, which can be used to distinguish products or services of one company from another.

For example: words, logos (graphics), drawings, color compositions, 3D model, the shape of a product or packaging.

TRADEMARK

In principle, a trademark registration will confer an exclusive right to the use of the registered trademark.

How long does the protection last?

The duration of protection of a trademark varies but it’s usually 10 years.  It can be renewed indefinitely (for next 10-years period of time) on payment of additional fees by the owner. That is why protection given by trademark is so attractive for business. The protection can be renewed indefinitely, in contrast to other industrial property rights.

TRADEMARK - SHAPE OF THE PRODUCT

Bottle of Coca-Cola is protected as a trademark.

WHAT IS TRADEMARK REGISTRATION FOR?

Better protection

Thanks to registering a trademark you have exclusivity over the brand name and ensure that you can take action against any counterfeit products that appear on the market.

Additional income

Registering a trademark is a good way to profit, even for startups – licensing a recognizable product or a slogan can turn into a good income.

Value of the trademark grows together with your company

ADDITIONAL INCOME

Michael Buffer is an American ring announcer for boxing and professional wrestling matches. He is known for his trademarked catchphrase, "Let's get ready to rumble!" (trademark since 1992).

Buffer uses his famous phrase in various licensing deals, especially in video games. As of 2009, the catchphrase has generated $400 million in revenue from licensing the trademark.

TRADEMARK LICENSING

In trademark licensing, a trademark owner (Licensor) grants permission to another (Licensee) to use that trademark for mutually agreed terms and conditions. There are different ways of licensing trademarks:

  • Franchising – a franchisee is allowed by the franchisor, in return for a fee, to use a particular business model and IP of franchisor, especially trademark.

The world's largest franchise network

TRADEMARK LICENSING

  • Merchandising – allowing manufactures of ordinary consumer goods such as plates, mugs, towels, caps, clothes, to apply on their products the trademark.

 

  • Co-branding - Lexus, the luxury motor car of Toyota and Coach reputed for its high quality leather accessories joined together to produce Lexus Coach Edition which is a Lexus luxury motor car with the interior finishing in Coach leather products.

PATENT

Legal exclusivity for an invention. Patents are granted for technical inventions, if they are:

  • new
  • technically innovative AND
  • technically utilizable.

What will it give you? Exclusivity to use the invention in your own production, usage, offer for sale or license.

 

For how long: up to 20 years. Where: on the indicated territory.

 

UTILITY MODEL

A “patent” in the field of design.  

The construction used must be new but the idea behind it does not need to be a technical novelty.

It must be technically utilizable, have a practical use.

The protection is given for a specific construction, a specific design.

For how long? 10 year.

 

INDUSTRIAL DESIGN

The protection is given on the basis of the appearance of the product.

Industrial designs give pretty good protection against counterfeit products.

 

The PH5 lamp (designed 1958)

TRADE SECRET & PROTECTION OF KNOW-HOW

To intellectual property rights is also included a trade secret. Trade secret is protected by Act of combating unfair competition from 1993.  

 

The secret may have technical, technological, trade or organizational character (or other). For example: know-how, business methods, sales methods, research results, marketing plans.

 

Trade secret are regarded as such only if there is an effort made to keep the information secret.

TRADE SECRET & PROTECTION OF KNOW-HOW

How many of you know the best kept trade secret in the world?  Coca Cola’s recipe.

 

 

 

 

Advantages of trade secret protection:

  • trade secret protection has no registration costs
  • trade secret protection has unlimited time.

 

IP VALUATION

IP Valuation is a process to determine the monetary value of subject IP.

IP valuation triggers can be:

  • Potential transaction (licensing of IP assets, franchising, sale or purchase of IP assets).
  • Enforcement of IP rights – calculation of damages when IP rights are infringed
  • Internal use – investment in R&D (or not), internal management of IP assets, investor relations

IP VALUATION

The most common method to estimate the value of IP are:

 

  • The cost method
  • The marketing method
  • The income method

 

WHY IS IT WORTH TO REMEMBER ABOUT IP LAW?

You are able to provide your startup a stronger market position and increase the competitive advantage of your company

IP gives enterprises the exclusive right to prevent others from commercially using a product or service.

 

Stronger protection of your intellectual property

Owning IP assets will improve your enterprise's ability to take successful legal action against imitators and free-riders.

WHY IS IT WORTH TO REMEMBER ABOUT IP LAW?

You can get additional income from licensing or selling IP

IP owner may chose to license or sell the rights to other enterprises in order to generate additional income for the enterprise.

 

You are able to create bargaining power

Owning IP assets that are of interest to others may be useful when you are seeking authorization to use the IP assets of others. In such cases, enterprises often negotiate cross-licensing agreements.

 

WHY IS IT WORTH TO REMEMBER ABOUT IP LAW?

Positive image for your enterprise:

Business partners, investors and shareholders may perceive IP portfolios as a demonstration of the high level of expertise, specialization and technological capacity within your enterprise. This may prove useful for raising funds, finding business partners and raising your enterprise's profile and market value.