Intangible assets are the most precious assets of a startup. The intellectual property system therefore protects those who innovate, even in a sustainable way. They can be divided into two large families: industrial property includes inventions (patents), trademarks, industrial designs and models; copyright, on the other hand, concerns literary, artistic, musical and architectural works. The founders of startups should deal with intellectual property before even launching their brand or product on the market, to verify that it does not overlap with pre-existing realities. When presenting your startup to third parties (investors, partners, suppliers), it is advisable not to disclose the elements that could be patented. Alternatively, you can ask for the signature of a non-disclosure agreement (nda).
The most precious heritage of one startup it cannot be touched or locked in a safe. It is represented by her inventions, her brand, the elements she was able to bring to market before anyone else. In summary, from his own intangible asset. The law protects them, dividing them into two large families: the industrial property includes inventions (patents), trademarks, industrial designs and models; the Copyright (copyright) instead concern literary, artistic, musical and architectural works. The intellectual property system, in fact, safeguards those who innovate and allows them to build an entrepreneurial project. It therefore deserves to be considered as a driving force for growth and development, also in a sustainable way.
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So far everything seems crystal clear but, when it’s time to get down to the practice, the first doubts arrive. Completely absorbed in the mission of laying the foundations of their startup, some founders momentarily lose sight of the need to protect their intangible assets, only to realize it when it is too late. Or they would like to do it, but they don’t know where to turn and are intimidated by the costs. Or again, they preclude opportunities – such as a pitch in front of an audience of potential investors or participation in a challenge launched by a large company – because they are afraid of revealing too much and being blown away by their project.
To clarify these and other questions we turned to the lawyer Umberto Locatellipartner of the law firm Uno Quattro in Milan, specialized in the branch of intellectual property and profound connoisseur of the world of startups.
What are the most common needs for which startups turn to your studio?
Among the cases related to the protection of the intangible assets of startups, in the first place there is the registration of the trademark, that is the “business card” of a company, represented by a word, a drawing, the shape of a product, a sound or a combination of these elements. Validation of brand identity is one of the main reasons that bring startups closer to the world of intangible assets.
However, many do not expect to have to carry out a preliminary activity: they simply create a brand and want to register it. On the contrary, as soon as you start thinking about a name and a logo you should proceed with the search for anteriority, that is to verify the existence of other earlier signs that are in conflict with the trademark being registered and which could therefore prevent it from being protected.
What other advice would you give to a startup that is preparing to register its trademark?
Since a trademark is registered by choosing one or more product classes, I would recommend looking to the future and extending your research to classes similar to those in which the startup operates. This serves both to assess a broader coverage in case of future expansion, and to verify the existence of third parties with similar names. A startup food, for example, should make sure that there are no confectionery companies that have the same or similar name as yours. In summary, we must not think in terms of watertight compartments.
On many occasions, startups are called upon to present their idea through pitches, meetings with investors, challenges. How to prevent someone else from misappropriating it?
When transmitting confidential information to a third party, it is good to ask them to sign a non-disclosure agreement. A confidentiality agreement can provide for both the application of penalties in the event of violations, and a non-competition agreement which limits the supplier’s or partner’s right to carry out competitive activities.
In some contexts, however, this is not possible: during a pitch, for example, you cannot get the whole audience to sign a note! In this case, the ideal would be to avoid disseminating technical information on processes relating to innovative aspects of the project, that is, those that could be protected in the future by means of a patent. Even during the challenges you should have this foresight.
When it is necessary to disclose confidential aspects to third parties, it is good to ask them to sign a non-disclosure agreement (nda) © AndreyPopov / iStock
But can ideas be protected?
No, and this is the real problem. In order to protect them, ideas must be concretized through an artistic work such as a book, a film or an architectural project (in this case we are talking about copyright or copyright) or through inventions, trademarks, designs and industrial models (which fall into the category of industrial property).
When there is no possibility to patent your invention immediately, for economic reasons or because these requisites are still lacking, the way to go is always that of confidentiality. So sign stringent confidentiality agreements, pay attention to the duration of the confidentiality bond, create armored know-how contracts.
The idea alone is not an intangible asset that can be protected. It becomes so when it is expressed through a creative work in the artistic or technical field © Kvalifik / Unsplash
He mentioned the economic reasons. How much does it cost to patent an invention? And register a trademark?
There are two factors that affect the cost of the patent: the search for the prior art, that is, other previous inventions similar to yours, and the cost of filing the Italian or European registration application.
The costs for registering a trademark, on the other hand, are much more variable. In Italy, the basic cost for a single product class is 101 euros, plus another 42 for stamp duty; for each additional class you have to spend another 34 euros. For a European brand, on the other hand, the basic cost is 850 euros; the second class costs 50 and the following 150 each. To these amounts must be added the costs of the professional who takes care of the deposit, in addition to any research phase.
Can the startupper take care of the prior art search alone, or should he contact a consultant?
As for patents, it is difficult to carry out the research of the prior art independently because a patent attorney is needed, often supported by an engineer.
For brands, however, there are some tools, so it becomes easier to organize independently. However, it is necessary to pay attention to various clues that are not immediate for those who are unfamiliar with the subject: in addition to verifying whether there are possible conflicts with other pre-existing brands in their sector, in fact, it is also advisable to extend the investigation to other product categories.
In short, doing it yourself means saving the consultant’s fee but, on the other hand, exposes you to much greater risks. If one day someone opposes his brand, the startup is forced not only to go in search of a consultant to defend itself in the opposition phase, but also to rebrand and throw away all the investments made up to that moment.
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But what happens in the event of a dispute?
As regards trademarks, a proceeding is opened in front of the trademark office which is following the registration procedure. The phase of opposition to the trademark is a contradictory procedure in which the parties must bring elements in support of their arguments in order to assert their rights. If the office considers that a trademark is in conflict with another pre-existing one and therefore violates the rights of the previous owner, it can order its cancellation. In this case, the entrepreneur loses his marketing investments, the registration fees paid at the time of filing the application and also the legal costs incurred in defending himself.
Research done well does not rule out opposition cases 100 percent, but typically gives a clear idea of any problems that may arise in the recording houses. The entrepreneur can decide to take a risk and move forward, or to design a new brand right away.
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In short, contacting a consultant immediately can avoid unpleasant surprises in the future …
Let’s put it this way: the founder of a startup must already think about many things. To tackle issues that are not in its strings and which at the same time are so important, such as the protection of intangible assets, it is better that you rely on a consultant.
This is also why my studio has developed legal boxes, legal products that contain an assistance service at a fixed cost. This is because we want to make life easier for startups and professionals, offering clear, quick and effective solutions to specific needs that are on the agenda for them. How, in fact, the protection of intangible assets: registering a trademark, signing an NDA, transferring assets from the founders to the company, supervising the brand and so on. We have tried to standardize the know-how that we have developed in fifteen years of activity, adding to it a part of personalized assistance.
Many are afraid to call a lawyer precisely because they have no idea how much it may cost, but our job must also meet the needs of companies that are born with few resources, have great potential and deserve to receive excellent assistance. .
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