Importance of Intellectual Property in Startups

To set up a new business is a tedious and a overwhelming process. On top of it protection of its various IPR also becomes essential as the innovations and strategies helps them to strive in the market along with other big competitors. By getting the Intellectual Property Rights protected the Start- ups have several advantages such as gaining additional revenue by licensing, it can become an essential part of branding, it can enable the start up to offer innovative or distinctive products to the consumers. It is considered as an asset or security against the loans. It moreover protects the Start up from unnecessary infringement suits and can use the trademark for building strategic alliances.

However, getting an IPR protection is not easy as it may seem. Earlier, Start ups usually suffered from inadequate guidance of lawyers, huge amount of expenses, drafting patent applications and took considerable amount of time in getting the IP registered. Thereby recognizing the need to support and encourage Start- ups there are certain initiatives taken by the government. Start up India Campaign is one such wherein it seeks to promote the youth to engage in start ups. It aims at simplifying the procedure of setting up a new entrepreneurship. The main objectives of it are as follows:

• Simplification and handholding

• Fund support and incentives

• Industry- academia partnership and incubation.

This program is organized by the Department if Industrial Policy and Promotions (DIPP). To avail the benefits under DIPP the start up must pass the following tests-

• The start up has not crossed 7 years from the date of registration or incorporation and in case of bio- technology firms less than 10 years.

• The incorporation must be done as-

a) Private limited company

b) Registered partnership

c) Limited liability partnership

• The turnover for any fiscal year shall not exceed 25 cr.

• The start up must not have been established by splitting up of an already existing business.

• The start up must focus on development and innovation in goods and markets. The government launched the Scheme of Facilitating Start ups Intellectual Property Rights Protection (SIPP) which essentially protects the patents, trademarks and designs of interest Start ups. SIPPS is an initiative to create awareness and facilitate the grant of IPR among Start- ups. It assists them by providing high quality start up services. The Start up action plan was released on January 16, 2016.

Under the scheme IP facilitators are appointed. They assist the Start- ups in getting their IPR protected free of cost. They take up all the tasks associated with IP registration and thereby relieves the start up in one aspect. The government pays a nominal professional fee through the office of CGPDTM. Even though start ups do not have to pay these IP facilitators the statutory filing fees must be borne by them. The advantages of IPR protection are as follows:

• Reduction in cost of IP filing- As the IP facilitators need not be paid anything by the start ups it becomes easier for it focus on other aspects of business. The government will bear all the expenses except the fee/ statutory fees.

• Fast tracking of Patent applications- The Start- ups can file a request for the expedited examination whereby the controller issues the First Examination Report (EIR) within 105 days. From 5-7 years the grant of IP is reduced to less than a year. Thereby, the Start- ups can build their business with a strong footing.

• 50% rebate in trademark filing.

Thus, Start up campaign is a much needed initiative for assisting the start ups in the country and to encourage many youths to set up their business plans. Not every person can avail the benefit of it as start up is defined and only those who fulfill those criteria’s can take advantage of the facilities provided by it. IPR plays a vital role in every business and garners a competitive edge from the very beginning of its set up.

Further reading/reference:

Certificate Course in Intellectual Property