Written by Claire Leonelli and Claire Denoual, Avocats à la Cour
Published on 07.07.2020 - Paperjam
Few startups have the reflex to integrate the protection of their intangible assets from the very beginning of their development strategy. However, securing these assets through intellectual property (IP) can provide a significant competitive advantage. Explanation.
IP rights, which are exclusive exploitation rights, allow to make research and development costs profitable and to increase the value of a company. They also allow to defend against copying by third parties. For any startup, defining, as early as possible, a strategy for protecting and enhancing the value of its (future) intangible assets is essential.
Protecting your intangible assets requires a contractual framework from the brainstorming phase onwards
It is essential, even before entering the development phase, to keep one's project secret, especially when it appears innovative. It is also important to make sure that the IP rights of the people involved in the project will be transferred to the startup. How can this be done? On the one hand, by concluding non-disclosure agreements (NDA) or confidentiality clauses with the partners or employees you will call upon to bring your idea to fruition. On the other hand, by integrating in your contracts a clause of transfer of IP rights (or distribution of rights in case of co-development). Keep in mind that Luxembourg law does not provide for an automatic assignment of all IP rights in favor of the employer or in favor of the client who orders an intellectual service. It is therefore better to lock this key point upstream.
Each intangible asset has its own IP right and its own strategy
Trademarks are obtained by filing with the territorial office where protection is sought. It protects the name of a company's products or services and distinguishes them from those of its competitors. It is very important, before deciding on a sign (name, logo, slogan), to ensure that no third party has prior rights. It is also essential to make sure that the chosen sign can constitute a valid trademark. This would not be the case of a term descriptive of the chosen activity (e.g.: "Software" for software). Having to modify one's visual identity at a later date is very costly and it is therefore better to be safe than sorry... Since protection is granted on a territory-by-territory basis (or by zone in certain cases, such as in the Benelux countries or the European Union), the filing strategy must be adapted to the commercial development plan.
Inventions can, under certain conditions, be protected by a patent. Only those that have never been disclosed can be patented. Here again, the protection is obtained through a prior filing and is territorial. The protection strategy therefore depends on the business plan. One must also take into account the significant costs associated with obtaining and maintaining a patent in several countries and the fact that the innovation covered by a patent is made public. Third parties have access to the information even if they cannot copy the patent. Filing a patent is therefore not always a panacea and the business model can be more profitable by keeping the underlying know-how secret.
The appearance of a product can be protected by a design right. Here again, a prior territorial registration is necessary, although many countries admit a cumulation of protection with copyright.
Copyright arises from the simple creation of a work of the mind, provided that it has an original character. It can be a text, a software, a graphic design, a photograph and not only a work of art or a novel. The date of creation, and thus the anteriority, can be difficult to prove in case of litigation. Certain formalities, such as the i-DEPOT with the BOIP, for example, make it possible to overcome this difficulty.
Simple ideas, no matter how great they are, are not protectable by IP and can be taken over by anyone.
What are the (main) questions to ask in practice?
- Do I have the right tools in place to keep my concept or know-how secret?
- Do I have proof of the creation date of my creations (publication, i-DEPOT, other...)?
- Have I developed a patentable invention? If so, does my business plan allow me to make the costs of a patent profitable?
- Do I have the IP rights to my products/services? What is the impact of using open-source software on my business plan?
- Is the name/logo I have chosen sufficiently arbitrary in relation to my activity? Is it available?
- What are the territorial markets I am targeting (tomorrow, the day after tomorrow, the day after tomorrow)?
- How will I market my product/service (direct sales, franchising, commercial agents)?
- What budget do I have to devote to the protection of my IP rights and how can I make this investment profitable?
- And so on.
So many questions to ask yourself in order to build your strategy in terms of IP, anticipate the corresponding investments and integrate them into your development plan from the beginning in order to avoid setbacks.
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