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The jury is still out as to how to properly define a startup. But a majority of reputable sources seem to agree that the key identifiers of a startup are innovation and scalability.
Startups differ from traditional entrepreneurial ventures, which may not seek to innovate, but to supply an existing product or service in the market, and compete for an existing market share. Innovative ideas enable startups to offer unique products or services, or products or services in a manner that is different from how the goods and services have been offered or consumed before.
Innovation often follows from intellectual engagement or consideration, resulting in creation of intellectual property (IP). IP is defined by the World Intellectual Property Organisation (WIPO) as “creations of the mind, such as inventions; literary and artistic works; designs; and symbols, names and images used in commerce”.
However, being a creator of IP does not necessarily mean that your IP is protected in your favour. Appropriate IP registration and protection enable a startup to safeguard its position in the market, and to reap the commercial benefits of its innovation without risking the same being appropriated by a third party for their own gain.
IP could take different forms, including trademarks, trade secrets, patents, industrial designs, copyright, and geographical indications, depending on the nature of IP, or the manner in which it was developed. It is important to obtain professional guidance on which category your IP falls, and the accompanying rights, limitations and exceptions.
In my experience advising startups in the East African market, it is common to find a startup not having invested in unimpeachable IP protection.
This largely leaves their idea, which the startup founders build through sweat, blood, tears and anything in between, at the risk of never truly benefitting them, or risking lengthy disputes as the startup tries to claim ownership to its IP rights, which may have been appropriated by another person.
It is of course understandable that startup founders are usually under incredible pressure to keep the startup going. In fact, if you randomly have a conversation with founders, invariably 8 out of 10 will tell you “funding” is top of mind, and not IP protections.
Yet, this is perhaps the single most important asset that their sweat, tears and blood will benefit from.
For instance, data from WIPO shows that more than 70 percent of the value of the companies listed in the United States comes from their IP assets, further buttressing the importance of protecting a startup’s IP.
As such, putting IP rights, and ownership of IP assets in the back burner for startups, may be akin to the proverbial shooting one-self in the foot.
The IP may be all the startup will ride on into its success, and it’s much better to valiantly guard this, by obtaining the appropriate registrations and ownership rights, especially at the very early stages of the startup.
Otherwise, a founder’s efforts later may be too small, too late, or the founders may have to endure lengthy disputes with third parties challenging ownership of their IP.
By Timothy Mukiti – The Author is the Founding & Managing Partner at Mukiti Advocates LLP, and a co-host of the Full Scale Podcast, a podcast dedicated having conversations around the startup ecosystem in Africa. Email: [email protected] Website: www.mukitiadvocates.co.ke
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