Protect your business ideas from intellectual property theft

If you’re an entrepreneur and you’ve come up with a fresh take on a startup or a revolutionary new product, you need to make sure no one steals your innovative ideas. If you’re worried that your new concept might get pinched at the pitching stage, or a shady colleague might lift your idea from under you and run off with it, then protecting your intellectual property is an important part of your business evolution.

We asked Paul Cosmovici - managing director of Cosmovici Intellectual Property, a Swiss team of intellectual property law experts – to give us the low-down on everything you need to know about how to protect your business ideas from intellectual property theft.

Euro Start: Can you explain what exactly Intellectual Property is, and how this has changed with the development of the internet and tech start-ups?

Paul Cosmovici: Creativity and the capacity to innovate has been one of the main driving factors of economic development, especially now in the age of technology and this is where intellectual property (IP) comes in very handy. IP is that one type of property that, unlike real, tangible property (such as a piece of land) or personal property (usual physical belongings), cannot be secured or protected using conventional means. You cannot really put out a fence or lock an intangible property, but you could integrate it into an IP strategy that could protect your rights and increase the value of your business.

To do that, firstly you need to understand what exactly IP is and how it applies. According to the World Intellectual Property Organization (WIPO), intellectual property refers to “all creations of the mind”, including the rights relating to “literary, artistic and scientific works, performances of performing artists, phonograms, and broadcasts, inventions in all fields of human endeavour, scientific discoveries, industrial designs, trademarks, service marks, and commercial names and designations, protection against unfair competition”, inasmuch as “all other rights resulting from intellectual activity in the industrial, scientific, literary or artistic fields” (Convention Establishing the World Intellectual Property Organization, Article 2 (viii)).

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Intellectual property is often divided into two branches: (1) industrial property – including patents for inventions, trademarks, industrial designs, trade secrets and geographical indications – and (2) copyright and related rights – including artistic, literary, and scientific works (such as computer programs and electronic databases). Patents are one of the first types of IP rights recognized by modern legal systems and they refer to the exclusive rights granted upon application, either by a government or a regional office, describing a product or a process that brings about a new way of doing something or a new technical solution to a problem. Copyright refers to the protection of literary and artistic works, including books, music, sculptures, paintings, and technology-based work (computer programs and electronic databases). It is important to note that through copyright, it is protected the expression of ideas and not the ideas themselves.

Seeing how and what IP protects, with the rise of the internet and start-ups, intellectual property has started to be more and more in the spotlight, for it offered entrepreneurs and creative authors a means to monetize their creations and secure the intangible assets of their business. Think about the number of new products, be it hardware or software that tech giants like Microsoft, Apple or Google are releasing every year and how difficult it would be to protect their trademark, copyrights or patents without the legal shield offered by IP rights. Technology is supported by IP through patents by granting inventors something called “a temporary monopoly” over their innovations, inasmuch as copyright can protect software and the trademark of the company. In doing so, owners prevent the imitations that could spring in the market, translating into a decrease of their profits and their motivation to further innovate. For many tech companies having their IP secured has turned into a bargaining chip at the negotiating table when looking for investors or exiting their business, as owning a trademark or a patent can considerably increase the market value of the business and could potentially open the door to funding opportunities.

Can you give some simple tips on how someone can protect their IP straight away?

As tech world is prone to plagiarism, the need for IP protection is growing considerably. One first step for a business is to invest time into strategizing for your business and consider what are the main challenges you might encounter. Think whether you have a patentable invention and apply for a patent, trademark words or combination of words, letters, numerals, drawings, symbols, 3D features (non-visible signs such colours, shades, sounds or any other distinguishable features) and copyright your computer programs, databases, or technical drawings. It is also advisable to make sure you sign non-disclosure agreements with all collaborators, independent contractors, or employees.

What are the downfalls of not registering your IP?

First of all, you might risk losing your trademark if a third party decides to register the same or a similar mark, which could mean that you might have to give up using the trademark even if you were first to use it, resulting in financial losses and a marketing blow. Secondly, you will end up offering an advantage to your competitors by not protecting your trademark, copyrights, patents, or industrial designs, as the case may be and might not profit at all from licensing your product. Thirdly, especially if you are a start-up and need financing, investors might end being rather scarce if you do not have a solid IP strategy and a protected IP portfolio. Tech investors and investors in general need to make sure that your start-up is the sole legitimate owner of the IP over your tech idea, that there is no risk of infringement and that there are no pending legal proceedings concerning IP rights.

What examples have you come across of businesses not registering their ideas and then losing out on a lot of money?

The value of an IP asset cannot really be determined, there have been cases in which a company's trademarks, patents or industrial designs have been sold in exchange for large amounts of money. Companies, whether they are in the ideation phase or want to expand internationally, are not fully aware of the possibility of financial implications. The most recent case with financial implications for business focuses on the registration of the domain name. One of our clients who decided to expand to another territory, failed to register the domain name in the designated country. This gave an advantage to a third party to register their domain in the designated country, demanding a considerable compensation in exchange for renouncing the domain name.

What sort of documents do you need to prove your idea is original to you?

It depends very much on the IP rights you refer to. Let us take the example of a patent that you have been working at for 2 years, and in another country, someone else is working on developing the same idea or a similar one. In this case, the proof of originality will be attributed to the first one that applies for patent registration or the first one that releases the given product/service on the market. If you have a trademark and company A comes to the market with a brand that they have not trademarked yet, and company B applies the very same day for trademark registration for that same brand, company B will have priority and will be able to prove easily that they were first to come. A trademark is protected from the application date, regardless of whether it stays pending for 6 months or 4 years.

What is the process of registering your IP?

First and foremost, you need to decide what IP active you want to protect and based on that the registration process varies. If you want to register a trademark in the EU, you must conduct a research on the availability of the trademark and check for similarities with others before applying with the EUIPO (European Union Intellectual Property Office). While it might seem budget friendly to do-it-yourself, there is a risk that a dispute might arise not from a direct match to your mark, but rather from trademarks that might create confusion in the market, so to avoid potential trademark infringements, it is advisable and more straightforward to consult a trademark specialist. Prior to not finding any similar matches with the trademark that you want to register, you can proceed with an electronic application, and once payment has been processed and you have selected the class of goods or services you want to register, the trademark application will be reviewed, published in the EU Trademark Bulletin, and issued. The registration steps are similar if you want to register your trademark in Switzerland at the IPI Swiss Federal Institute of Intellectual Property.

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If you want to apply for a patent in Switzerland, it is recommended to forego the same process of prior art, freedom to operate or assisted search, before filling out for a patent application and submitting all the technical documents, examining the documentation by specialists, granting, or rejecting the patent.

Is it expensive to register a trademark?

For example, if you are registering a trademark with EUIPO, then, the official taxes are of approximately EUR 850-1300, depending on the number of classes for which protection is sought, plus professional fees. If you are registering your trademark with IPI, then you should expect a filling fee offering protection for 10 years of CHF 550 with a class surcharge (per class as of the 4th class) CHF 100.

How many years does it take to register a patent?

If you are registering your patent with the EPO (European Patent Office), the average duration for obtaining a patent certificate is between 3 to 5 years from the date you have filled your application. A patent protection lasts 20 years from the filling date, exception being made for patents of pharmaceuticals and pesticides, that can obtain a supplementary protection certificate for an additional timeline of up to 5 years. So, a patent protection lasts as the annual renewal fees are paid. In Switzerland, the annual renewal fees must be paid in advance beginning the 4th year after the filling, being due every year on the last day of the month in which the patent application was filed. Fees must be received within six months of the given due date and for the fees received within the last three months of the due date, patent owners must pay a surcharge.

What happens if someone challenges you on your idea? If you register your IP does that protect you from lawsuits?

Having your IP rights registered does not mean that you are protected from lawsuits, as any third party can oppose the registration of an IP asset. However, by registering your IP assets your idea will be protected, you will have an exclusive right over it, and in the event of a conflict, you will be able to defend it.

Do you have to register your IP in every country, or can you just register it in one country, and it covers you globally?

First of all, it should be clarified that there is really no such thing as a “global” trademark, patent, industrial design. You can indeed register your IP assets with WIPO (World Intellectual Property Organization) and that will be the closest you will be able to get “global protection”. Usually, if you intend to expand your business internationally, you must bear in mind that patents, trademarks, industrial design and copyrights are “territorial” rights, meaning that they have legal force in the country/region where they were awarded. In case of copyright, that IP right is automatic in all 179 Berne Convention adhering states.

It is crucial for any business or entrepreneur that plans to enter foreign markets to make sure that no third party will exploit their IP rights. In the event that you have not obtained protection for your IP rights in a foreign market, the risk is that competition might use your patents (that are made publicly when you are being granted the patent in your country), or your designs or trademark, without a prior licensing agreement that is applicable only when the IP rights are registered, thus valid.

How do you see the protection of IP developing in the future – will governments try to introduce new laws, and what countries are the best for IP protection?

According to the U.S. Chamber of Commerce’s Global Innovation Policy Center recent release of the “International Intellectual Property Index 2021” that surveyed 53 countries, the highest scoring intellectual property environment and most likely to achieve both social and economic benefits in terms of access to venture capital and increased private sector investment amidst the COVID-19 crisis. The United States (95.31 score), followed closely by the United Kingdom (93.9), Germany (92.27), France (91.43), Japan (91.12), Sweden (90.92), Netherlands (90.02), Ireland (88.86), Switzerland (85.82), Spain (84.68), Singapore (84.38), Spain (84.68), South Korea (83.73), Italy (83.15) and Australia (80.55).

With the rise of disruptive technologies such as AI or blockchain, the boom in tech start-ups and the change of focus from tangible to intangible assets, intellectual property has come more and more into the spotlight. IP assets ranging from technology, brands, data, innovation in all forms represent now around 85% of corporate value and surpass $ 50 Trillion, as per the INTA (International Trademark Association) report. The protection of the IP rights is increasingly challenged by the unpredictability of AI and the implications that arise. Recently, the IP world has been shook by the South African and Australian courts, ruling that an AI can be considered an inventor on patent filings. The decision caused a lot of stir as IP lawyers are concerned that it might lead to “junk patents”, while others say that this will lead the way to what has been called a Fourth Industrial Revolution.

Considerably more trademark and patent offices struggle to keep up with the increasing volume of applications that by 2018 it is thought to have reached more than 3.3 million patent applications, 14.3 million trademarks, 1.3 million industrial designs while businesses confront the challenge of shorter innovation cycles due to the fast-developing technologies. In the future, this could potentially lead to the creation of alternative means of registering and managing the IP assets on their own. Regardless of that, we could potentially expect governments to support research and development and try to ensure that national legislation is attuned with the international IP regimes.

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For more information, about how to protect your IP and register a trademark or for help in opening a company in over 30 countries worldwide, please contact us on 0033 (0)1 53 57 49 10 or email us from our contact page and we’ll be happy to help.

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