How can a startup protect its intellectual property rights


Intellectual property is the most valuable asset of any startup. Often the subsequent success of a project or even the possibility of its existence and development depends on how well the rights to it are protected.

Often, startup founders who start a project and involve third-party developers or designers do not think about the need to legally fix their arrangements. It best, they sign a non-disclosure agreement (NDA) only.

But even the signed NDA and the framework cooperation agreement do not guarantee the absence of disputes over the ownership of rights.

To protect intellectual property (IP) rights, Veronika Sokolovskaya recommends to startups:

To formalize any work on the project with separate agreements

It can be an agreement for the development of a technology, code or design project with clear conditions on the ownership / transfer of rights to the created IP objects.

If the development is supposed to be joint, it is necessary to establish in the agreement who exactly owns the exclusive rights to each of the components of the product, including in case of termination the agreement on the initiative of one of the parties.

An agreement between the founders can be concluded even before the creation of the company. It is important that this agreement will not be a declarative document, but will set forth specific rights and mechanisms for their implementation. If cooperation suits all parties, and a decision on the further development of the startup and the creation of a separate legal entity for this purpose is made, in this case it is advisable to accumulate all the rights to IP in this legal entity, i.e. to conclude appropriate agreements on the assignment of rights in favor of the company.

To create the "right" legal entity

When creating a company, be sure to get legal advice to choosing a jurisdiction (Belarus, EU, USA), organizational and legal form of the company, corporate structure (how and by whom the decisions are made in the company), clarifying the tax burden and other issues in relation to your specific project and priority tasks (scaling and entering the world market or attracting investments, etc.). There is no “standard” situation and a “standard” start-up, so “standard” templates from the Internet are an extremely short-sighted move.

When interacting with contractors, to be sure to agree on a clear technical task

First of all, a startup needs a technical task, since a technical task, correctly drawn up and signed by both parties, will easily answer the question of whether it is possible to force the developer to redo everything within the agreed budget.

In fact, the technical task acts as a checklist for checking the developed product, and also determines the rights to which particular object should be transferred to the customer. It's a bad idea to trust the contractor to prepare the technical task by himself if the startup does not have the competence to thoroughly check it. To sign the technical task after the product is created is an even worse idea (attention, spoiler - the contractor may ask for additional money for the product under the threat of not signing the final technical task).

To fix the transfer of rights to the objects created under the task in a bilateral act of acceptance and transfer of rights

Often, such acts contain only an indication of the fact of work / rendering of services, but do not regulate whether the intellectual property rights were properly transferred to the startup company.

An important tip for beginning startups – is to keep your new product separate from a work for hire

In case when the employee, within the framework of his labor function (labor contract and job description) and / or within the framework of the employer's task, creates any product, the exclusive rights to it will belong to the employer. By the way, this rule also works for the employees of the startup itself, - it is very important to correctly formalize labor relations and fix in writing the tasks that are communicated to the employees, and the reports on their implementation.

To save all information about the development and cooperation with the partners

In authorship disputes, it is very important to establish who was the first to design or write the product code. If a startup can provide reliable evidence of product development in-house (internal technical tasks, correspondence about a product design approval, publications, speeches at conferences), it will be much easier to prove that you are right when partners behave in bad faith. You can also use correspondence, - because the information from messengers can be evidence in the court.

To register / deposit your own software

In general, copyright does not need any registration, since the right of authorship arises by the fact of a work creation by the author. However, in case of a dispute over authorship or infringement of the rights, it may be difficult to prove this fact.

The procedure for registering software (depositing) is not a mandatory procedure in Belarus, however, it could be a documentary evidence that the code at a certain point in time belonged to a particular person. In Belarus, a paid software deposit service is provided by the National Center of Intellectual Property.

In addition to the registration in Belarus, it is possible to deposit the software in other jurisdictions. It is advisable to register the software in those countries and regions where its active use is planned or where the right to IP is likely to be violated.

From the summer of 2020, the online-depository function of the World Intellectual Property Organization WIPO PROOF is available.

The deposit itself will not exclude the abuse, but it can become significant evidence in a dispute about the copyright holder and the authors of the product, thereby strengthening the position of the startup. Alternatively, the code can also be placed on behalf of the startup on open and closed online repositories, GitHub or similar sites under the appropriate license, which will help to confirm the ownership of the code and the date of its creation. It is need to carefully study the license terms so as not to accidentally allow the use of your code "in secret to the whole world".

To apply for a patent

First of all - turn to the patent attorneys on the possibility of patenting your product. It is important to understand: the program code is protected as an object of copyright (literary work) and cannot be patented. An algorithm or technology is also not subject to patenting if it does not contain a unique technical solution. If your development is a hardware and software complex that solves certain technical problems and has the necessary inventive level and novelty, a patent attorney will help you choose a suitable patenting strategy.

To protect your brand by registering a trademark

A trademark (in other words, a brand) is subject to protection only from the moment of its registration in the patent office and is protected only for those goods / services and those countries in respect of which it is registered. An unregistered mark is not subject to legal protection as a trademark. If a competitor registers a promoted product name, a startup will most likely have to spend a lot of time and incur costs - both monetary and reputational - to regain the right to the name. And in some cases, it will be completely impossible to return the lost name or logo. In addition, a trademark will help to protect a domain, since domain names in Belarus are not recognized as IP objects.

If a startup is faced with breach of its rights, and preliminary actions to protect IP have not been taken, it is important to remember that the copyright for the software or design is protected by the fact of its creation. This means that failure to comply with any formalities does not deprive the creators of IP rights to it, but complicates the process of proof.

Perhaps, during negotiations, the parties will be able to agree on an acceptable option for using IP or ending such use. If negotiations are impossible or "deadlocked", it is possible to bring the case before the court.

If a breach is found, you need to contact the violator with a claim drawn up in accordance with the law, having previously collected and properly secured evidence of the violation of your rights. In this case, correspondence, materials of previous presentations, the deposit of a source code, the results of technical expertise, notarial examination of a site, etc. can be used as evidence of ownership of the rights.

Depending on the nature of disputes, there are various legal methods for resolving them and preventing illegal actions in the field of IP - in a judicial or extrajudicial procedure, in a civil or administrative process, by filing a complaint to a patent authority or by filing an application to an anti-monopoly authority on unfair competition. The choice of a protection strategy depends on the specific situation that has developed and the priorities of a startup.

How can a startup protect its intellectual property rights
How can a startup protect its intellectual property rights


Intellectual property
Anti-trust legislation
Labour relations
Contract law

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