Start-up companies

Start-up companies entering the market with an innovative idea or product are often confronted with the question what is intellectual property and why is it so important for them.

Intellectual property can be divided into copyright and industrial property rights such as trademarks, designs and patents. Intellectual property rights are of crucial importance for start-up companies because they have a great impact on the competitiveness of the company on the market, on their long-term development, on the research, development and investments, on the trustworthiness of the company for future strategic partners, on the establishment of new or the expansion of existing economy branches, on new jobs etc. The entrepreneurial nature of intellectual property rights requires good knowledge of their characteristics on one hand, and careful management of these rights on the other.

a) The importance of copyrights for start-up companies

Copyright belongs to the author on the basis of the creation of a copyright work. This means that no registration is required for the work to be protected by copyright. Certain (economic) copyrights can be transferred to third parties. The holder of the copyright can be a natural or legal person and has the exclusive right to exploit the copyright work.

Copyrights are crucial for start-up companies, especially in the initial stages of development, when relationships between participants establishing and managing the company are defined. In the case the start-up company decides to acquire initial capital through crowd-funding platforms, such as Kickstarter or Indiegogo, it is important that the company and its funders regulate business relationships with the creators of the campaign precisely. What is particularly crucial is that copyrights are transferred from the creators of the campaign (for example, photographers, graphic designers, promotional video recorders etc.) to the company that will manage these rights in the future. A diligent arrangement of the relationships can prevent disputes in the future, especially between the funders of the company and the participants in the campaign.

IPI helps its clients to identify issues related to copyright which are crucial in establishing the company and conducting business, whether it is a start-up or an established company. IPI also offers advices in drawing up contracts on the transfer of copyright as well as reviews of other documents related to copyright law.

b) The importance of trademarks for start-up companies

Trademarks enable the distinction of goods and services of different companies and the communication between the company and its customers. On the other hand, registering a trademark means also investing in the recognition of the goods and services of the company. A thoughtfully selected and properly managed trademark can contribute significantly to the value of the company.

IPI advises its clients regarding the selection and use of the trademark as well as represents them in the procedure of registration of the trademark in Slovenia and abroad. IPI also gives assistance in the selection of an appropriate sign that can be registered as trademark. For this purpose, IPI prepares a detailed overview of the trademark registers, from which it can be determined whether identical or similar trademarks already exist, which could prevent the registration of the desired trademark. In cooperation with the client, IPI selects the classes of goods and services for which protection is sought.

A thoughtless selection and use of a trademark without reviewing relevant registers can represent a risk of infringing the rights of holders of already registered trademarks. For start-up companies, that are often funded by crowdfunding platforms, this can cause the blocking of the campaign, loss of reputation and high material costs.

c) The importance of designs for start-up companies

One of the forms of protecting company’s products is also with designs. Designs are exclusive industrial property rights that protect the appearance of the product that is new and has an individual character. The protection of the appearance of the product with a design is much cheaper compared to other industrial property right (such as trademarks and patents) and is recommended for the protection of original shapes or appearances of the product that can play a crucial role in product marketing. In certain cases, it is also possible to indirectly protect the functionality of the product with the design, even though this kind of protection is usually granted to patents.

For start-up companies, it is important to be informed about the possibility to protect products with designs. IPI consults its clients regarding the possibility of obtaining design protection and its exploitation on the market. It also represents its clients in registration proceedings in Slovenia and abroad as well as helps them with the transfer of acquired rights on designs to third parties.

d) The importance of patents for start-up companies

Companies that want to be competitive, ought to be innovative. Because of the emerging forms of economies that are based on knowledge and competition over monopoly, start-up as well as established companies are forced to mobilize all their knowledge and knowledge-based technologies developed by their employees. By creating new knowledge and developing new products and services the companies try to increase their added value. One of the most common questions in the initial phases of the establishment of a company is how to protect intangible knowledge and innovations based on that knowledge in order to prevent competitors from exploiting those innovations.

Patents are exclusive rights protecting innovations that are new, involve an inventive step and are susceptible of industrial application. Similar to knowledge, patents are intangible means that can represent a crucial component of a company’s value. In the case the company lacks sufficient financial resources, patents can represent a promise to the investor for future market development. Patent holders can also acquire finances by granting licenses for the use their patents or by selling the patents.

IPI gives counsel to start-up companies regarding patent protection and patent management once they are acquired. It also cooperates with various patent representatives in Slovenia and abroad that can help start-up companies with patent claims on professional areas where the innovation is developed.