1. Knowing basics of IP and getting protection
IP gives you rights to stop others from using your creativity. For founders of start-ups, it is worth spending some time in educating yourselves and your team on the basics of IP, including trademarks, copyrights, patents and trade secrets. A little basic IP terminology is introduced below:
A trademark is a sign that distinguishes the goods and services of one trader from those of others. Typically a trademark can be words (including personal names), indications, designs, letters, characters, numerals, figurative elements, colours, sounds, smells, the shape of the goods or their packaging or any combination of these.
A patent protects your invention by giving the patent owner a legal right to prevent others from manufacturing, using, selling or importing your patented invention.
Designs can be registered for a wide range of products, including computers, telephones, CD-players, textiles, jewelry and watches.
Registered designs protect only the appearance of products, for example the look of a computer monitor. Registered design owners have the right to prevent others from manufacturing, importing, using, selling or hiring the design product.
Copyright is the right given to the owner of an original work. Typically, this right can subsist in literary works, computer software, musical works, dramatic works, artistic works, films, photos etc. Unlike other intellectual property rights such as patents, trademarks and industrial designs, it is an automatic right and there is no need to register a copyright in Hong Kong in order to get protection under the Hong Kong law, but it is recordal in China.
Trade secrets and undisclosed commercial information are confidential information in a commercial setting, such as formulaes, methods, technologies, designs, product specifications, business plans and client lists, that have commercial value. Protection of trade secrets and undisclosed commercial information is of particular importance when the IP is not registrable or the right owner does not want to disclose such information to the public.
For the same product, sometimes many different types of protection may be available. For example, if your product is a new tech cordless vacuum cleaner, the relevant IP might include patents, trademarks, trade secrets and design. Understanding the basics of IP will definitely help founders of start-ups to establish their own IP protection strategy.
Once the strategy is made, start-ups shall file applications to the relevant institution as fast as they can in order to maximize the protection.
2. Having key documents in place
Many start-ups believe that if they have registered a patent for the company’s key technologies and a trademark for the product name, their IP will be protected. While these are some of the essential steps that should be taken, alone they are not sufficient.
For employee part, it need to be careful when bringing new employees into the company, especially when their work is directly related to your key technology. A well-written non-disclosure agreement is a must-have document for start-ups. It will protect start-ups’ IP from unauthorized disclosure by employee. Meanwhile, in case the key staff is later solicited to join the competitor, it is also recommended to have a non-compete clause in employment contracts, which restricts staff from taking jobs with rival companies for a period of time after their leaving.
Further, a clear ownership of the Company’s IP is also important. It is critical for the start-ups to ensure that the proper assignment agreements are in place for employee, consultants and business partner. No start-ups want to see in the future that they have to struggle in the ownership dispute for their key technologies or share half of license fee with consultants they hire for developing technologies for them.
Equally important, especially in the case of a trade secret, start-ups can follow the classical coke recipe example by strictly controlling the employee’s access to IP and keeping the secret only among a few key staff.
3. Global IP protection
Start-ups shall think hard about the future. It is vital for starts-ups to keep in mind that except copyright, most of IP which need to be registered, i.e. trade mark and patent etc., is country/region-specific and is limited to the borders of the issuing country/region. For example, Company A has registered its trade mark and patent in France. If later Company A finds that knock-offs are sold in Korea, Company A will not be able to protect its products against infringers in Korea based on its IP registration in France. It is because such protection does not extend to the places out of France. In order to avoid such awkward scenario, start-ups need to take a hard look at their business plan and devise a global strategy for entering countries, where their products will be potentially be sold and where they can be made in the future.
4. Seeking remedy from local customs
Start-ups usually have limited financial resources. Sometimes, even start-ups know that there are knock-offs of their products sold in the markets, they have to choose to take no action on such infringement. In the view of those start-ups’ founders, it is not worth their taking action to stop it when considering the high cost of litigation.
In Hong Kong, the Customs and Exercise Department has the power to take criminal sanctions against copyright and trademark infringement. If start-ups find such infringement, it will be cost-efficient for start-ups to report to the Customs and Exercise Department. The officers of the Customs and Exercise Department can help stop such infringement and protect the interest of start-ups.
How can OLN assist?
OLN and our Intellectual Property team in Hong Kong and Shanghai can assist start-ups with all intellectual property issues and in particular, devising tailor-made IP protection strategy for start-ups and helping start-ups register their trademarks, patents etc. around the world. If you need legal advice on how to register a patent and protect your copyright, we are here to help. Contact us to know more about how to register your trademark and how we may help you. We would be happy to explain to you how to register copyright and or stay away from the pitfalls of copyright infringement.