Startup specialist firm, Beauchamps Solicitors, join us to answer startup legal queries every month.
Ecommerce startup Bynk needs some advice on patents:
Were an emerging FinTech startup focusing on innovation in the banking sector. At what stage should startups focus on patents? Also: should you wait until you have a proof of concept, or do startups need to employ a specialist to check if their idea is already patented?
From the outset, your startup should consider what intellectual property rights (not just patents) are important to its business. Every startup needs to plan for success, and having a strong intellectual property (IP) portfolio will be important to its ability to play the long game.
However, it should be noted that patents are not the only IP rights available that play an essential role in the monetisation of any startups technology. Depending on the technology, copyright and confidential information may also be relevant. Intellectual Property is a basket of different rights ranging from trademarks and patents to copyright, database rights and designs. Confidential information is also considered alongside intellectual property rights.
Whether or not they are aware of it, every business possesses IP rights (either collectively or individually) and so, your startup should conduct an audit, at the start, to identify its IP rights and then proceed to protect them as this will give you a competitive edge against your rivals.
Regarding whether or not your idea has already been patented, you can do your own informal patent online search – including a simple Google search for their technology – by using as many different keywords to see if another has invented (and patented) the exact same technology. If you cannot find the exact same technology or the startups technology is different to what has already been filed or registered, you should then consider the market implications of its technology: namely, are there customers who are willing to pay money to use the technology or buy (or licence) the intellectual property rights (including a patent).
If there is not a strong demand for the technology or the market is small, it may not make business sense to invest time and money in filing a patent – in such cases, it may make better sense to rely on the (non-registrable) intellectual property rights such as trade secrets or copyright. However, if there is a market and a demand for your technology, then patent protection may be appropriate, but this will depend on a combination of the technology and business model. For example, if the technology was difficult, time-consuming, and/or expensive to develop but easy for others to copy once they see it, patent protection may be appropriate.
It is always worthwhile having a chat with a patent attorney as they can advise whether it would be worthwhile filing a patent application. If the decision is made to proceed ahead, the patent attorney can carry out a comprehensive patent search before the patent application is filed. They will also draft and file the appropriate patent application.
Also: It is important that your startup does not disclose its technology before a patent application is filed because disclosure will cause forfeit any patent rights. Also, a startup should not wait too long to protect its innovation because the longer it waits, the more likely it is that someone else will release a competing technology and/or file an application for the technology before you do.
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NB: While all reasonable care has been taken in the preparation and completion of this article, no responsibility is accepted for any errors or omissions. This article has been prepared for information purposes only and does not constitute legal or other advice.