3 things all Startups should know about Intellectual Property


I was recently privileged to be part of BEAM, an entrepreneur and startup event. They are a movement dedicated to bringing together Entrepreneurs in a fun, inspiring, and insightful environment. Comparatively, many startup events traditionally focuses only on funding, hacking, and branding among others but do not cover the all-important topic of intellectual property (IP). As a result, there is still a huge gap on the lack of IP awareness amongst the startup owners.

One would think because of the lack of emphasis in Southeast Asia, IP protection itself is not important. Well that certainly isn’t true. Malaysia boast quite a reputation in IP protection, which is telling in the amount of research and development expenditure (% of GDP) based on data from World Bank . We are only trailing behind Singapore in Southeast Asia and well ahead of Thailand by some distance too. This certainly shows confidence of the prospect of successful R&D in this part of the world.

Source: World Development Indicators (WDI), February 2016

As commercial and private corporation are spending money on R&D, for startups on the other hand there is a stark contrast.  In my conversations with many startups, they tend to ponder “Is it really all that important to think about IP when you’re a new business just starting out?” In my opinion, it certainly is very important. After the industrial revolution of America and Europe, as Asia was emerging, we were indirectly labelled as the copycat countries, but in recent times, we have been ourselves creating and innovating, hence the need to protect IP is now even greater. Now that we are on the other side of the coin, ignorance is definitely not as blissful as it used to be.

Where to start you would ask? Well, like all businesses, a startup is not all that different, and vision is a key ingredient to success. Hence, knowing what you want to do with your IP is very important. Don’t just file and protect your IP simply out of fear, or do the same just because everybody else is doing it, or that someone says you need it. You do need IP but most importantly you must understand why you need it. Here are 3 things to consider in all things intellectual property.

1. WHAT is IP? 

Identifying one’s IP rights have been one of the most frequently asked questions I get. “What is IP all about?” We have many technical terms for it but I will attempt to describe it as simple as I possibly can.

Trademarks Your unique BRANDthat others can identify
Patents Your TECH-nology which solves a problem
Industrial Design Your PRODUCThaving creative design
Copyrights A CREATOR’srights to their own original work in music, arts, writing or performance
Trade Secret IDEASthat could offer your business a competitive advantage
Commercialisation Getting your BRAND, TECH, PRODUCT, CREATION and IDEA out to the MARKETand reap the benefits of your IP ownership

However like all lawyers and their disclaimers, this description is merely to make the subject more relatable and it may not reflect the all-encompassing meaning of each component. For a more comprehensive understanding, download this pdf from World Intellectual Property Organization (WIPO).

2. WHY IP is important?

For one, it gives startups the first ownership rights before anyone else can claim it. It is sort of like buying your own domain name, but that’s a topic for another day. These are foundational rights in your business that would give you a choice to stop those who might misrepresent your brand if it happens in the future (you just never know what might happen).

Having your IP rights secured is like bringing your sword to war. It can be used as a defense and also an offence weapon!

Other than the benefits of protection, IP also adds value to your startup as it is a recognizable intangible asset. Having said that, it can give investors confidence that your innovation is truly owned by your startup in the eyes of the law. This then translates to the freedom to operate which gives you a competitive advantage. One thing to note though, many venture capitalist and investors in this region might not see the benefit of this in a hyper local market and audience, but in order to grab the regional market and eventually going global, IP is something many investors cannot ignore, hence it is always better to be ready than sorry.  A rather popular way of maximising your returns on IP is to license your process and brand. Having ownership gives you the chance to scale and increase market share rapidly, as the saying goes you can’t give what you don’t own.




3. WHEN to think and act on IP?

Now, just because your startup is still at its early stage of growth and you think that your focus on traction and marketing is key at this moment, doesn’t mean you should neglect and overlook IP. Remember the vision mentioned earlier? Well we need to make IP part of our strategy. On some cases when you’re in the ideation stage, you probably are not sure of what you want to protect seeing that it’s still only an idea after all. In such an early stage, you might not need to spend on protection yet (although there are some exceptions). But you do however need to be thinking about IP at every stage of your startup.

….think of IP at every stage of your startup

Let me give you an example, assuming that you are in the ideation stage and you are selecting the name and logo of your startup. (By law: You need to make sure that your mark is special or distinctive enough to be registered). In other words, you need to be aware that if someone else has a similar name or even emblem to your logo/mark, it could be challenged or objected when you register it later. Ignoring this fact could lead to an increased cost during the registration process, worst case scenario, you might find yourself infringing someone else’ trademark (logo or name). If that happens, you are then forced back to the drawing block and have to rethink your branding all over again. In short, you’ve got to do your own research or what us lawyers would call, due diligence to find out what’s out there before you create your brand. Google is always a good place to start!

Here’s a slide to draw up a summary of the thought process at all stages.

Hope this helps shed some light and perspective into intellectual property. I believe startups should at least spend some time to learn about their IP rights and embrace it as a tool to complement their business strategy.

I am for one an advocate that IP should be incorporated into each accelerator program and have increased discussion and talks on this topic amongst the startup community (as what MaGIC is doing with ACE) as it is such an integral part of a startups’ growth.