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Patent Protection for Startups in India
Why Early Filing Matters
For a startup growing in India, an idea on which it is based can be its biggest asset for running the startup. It could be anything relating to new technology, an innovative product, a unique manufacturing procedure, or even a technical solution or service to a problem that has existed for many years. But it is important to understand that having a great idea is only the beginning and protecting that idea before someone else copies it is as important as developing the idea.
This is where patent protection becomes relevant. As we all know, any new business model often operates with a limited amount of resources and spends months or even years developing their ideas, products before even thinking about intellectual property protection. Many founders assume that they can file a patent once the product is ready for the launch in the market. In reality, waiting too long can create serious issues. In India, early patent filing can play a very important role in protecting an invention and preserving a startup’s commercial advantage.
What is a Patent?
Basically a patent is a form of intellectual property protection granted for an invention which invariably meets the legal requirements under Indian patent act. It is important for an invention to be new and involve an inventive step which is very much capable of industrial application. A patent gives the patentee who is an applicant an exclusive right over the invention which is patented for the prescribed term called as the patent period, subject to the provisions under the patent law. This can invariably prevent others from inventing, using, selling, offering for sale, or importing the patented invention without any kind of authorisation.
It is important to note that for a startup, this patent protection can be particularly valuable. Unlike established companies, startups may not have large teams or substantial financial resources to compete with businesses that can quickly replicate a successful product or a process. A patent can therefore act as a legal guard between a startup who came up with an iinnovation and its potential competitors.
Why Should Startups File Patent Early?
One of the biggest mistakes founders of startup make is treating patent filing as something that can be done at later stage. The timing of filing matters alot because India follows a first-to-file syste meaning thereby that where competing claims arise over the same invention, the person who first files a patent application may have a significant advantage. Consider a startup spends two years inventing a new technology. The founders discuss the invention with potential investors, demonstrate the product at an industry event and share technical details with potential business partners. Before they file a patent application, another party files an application relating to the same invention.
The startup could then find itself in a difficult position. This is why founders should think about patent protection before any kind of public disclosure, rather than after the product becomes commercially successful.
Filing Patent Before Public Disclosure
Confidentiality is particularly the most important thing when dealing with potentially patentable inventions. Founders generally want to demonstrate their products to investors, customers, manufacturers and potential partners when coming up with unique invention. However, openly disclosing technical details in public before filing a patent application can potentially affect the novelty of an invention which the primary thing in order to get invention patented.
This does not mean that startups should never discuss their technology with anyone. Instead, founders should have a clear strategy for handling confidential information. Where appropriate, startups should consider using Non-Disclosure Agreements (NDAs) and limiting access to sensitive technical information until an appropriate patent filing has been made under Indian Patent law.
The safest approach one can follow is generally to assess patentability before making the invention public.
Provisional Patent Applications: An Useful Option for Startups
Startups generally operate in an environment where the product is still evolving under process of invention. The technology may be functional, but the final version may not yet be ready. In such circumstances what can help is, a provisional patent application can be very useful. A provisional application can invariably allow an applicant of a patent to establish an early filing date without immediately preparing a complete specification of patent. The applicant can subsequently file the complete specification within the prescribed period.
This can be particularly useful for startups because innovation rarely happens in a perfectly linear manner and takes time.
Let’s understand, a technology startup may develop a working prototype in March, begin testing it in April and make significant improvements by June, now this process ran for months. Instead of waiting until invention is completed the startup can explore filing protection at an earlier stage, provided the invention is sufficiently developed to support the provisional application and also in line with provisional application.
However, a provisional application should not be treated as a mere formality. The technical disclosure should be prepared carefully because the quality and scope of the disclosure can have an impact on the protection ultimately pursued.
Patents Can Increase a Startup’s Value
Patent protection can invariably prevent competitors from copying an invention. For startups seeking funding, intellectual property can also contribute to the overall value of the business. It is important to note that Investors often look beyond revenue and customer numbers. They may want to understand what makes a startup difficult to replicate. A well-managed patent portfolio can demonstrate that the company has invested in protecting its technology and building a defensible business position.
Ownership Should Be Clearly Documented
Another issue startups sometimes overlook is who actually owns the invention. A startup may have founders, employees, consultants, freelancers, research institutions and external developers working on different aspects of a product. Simply assuming that the company owns everything created during development can create problems later.
Startups should therefore consider appropriate agreements dealing with intellectual property ownership and assignment. This becomes especially important during due diligence. An investor or acquiring company may ask whether the startup actually owns the patents and inventions it claims to own.
What Happens If a Startup Waits Too Long?
The consequences of delaying patent filing can extend beyond losing a potential filing advantage. Once an invention becomes publicly available, questions regarding novelty and prior art can arise. Competitors may also enter the market and make enforcement and granting registration can be more difficult from a commercial perspective.
Even where legal protection may still be available, delay can increase costs and create uncertainty. For a startup operating on a limited budget, early planning can therefore be more efficient than trying to repair an intellectual property problem after the product has already been launched.
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Written By
Advocate Vineeta Singh
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