Intellectual Property (IP) is one of the most neglected aspects of business. Small businesses and start-ups face a lot of challenges. One of the biggest challenges for start-ups is having your intangible assets swiped underneath your nose. This can set your progress back immensely.

There has been a significant lack of awareness about how important IP is for the modern small business. That is why we’ve come up with this comprehensive guide that will tell you everything a start-up or a small business needs to know about IP.

What is IP?

Intellectual property is a type of property that recognises concepts that are produced by the human mind. Most IP is intangible, meaning you cannot physically touch it.

IP laws give the same protective rights as physical property to intellectual property. There are several types of intellectual property that all countries recognise. These include copyrights, trademarks, patents, industrial designs, utility models and trade secrets. In essence, the term ‘intellectual property’ is a blanket statement that covers all these types of IP.

IP is unique to you or to your business because it was born from the creations of your mind. Real-world examples of IP include:

– Your company logo (which includes the colours, font and characters you use).

– Your brand identity (includes your name, any shapes you use, slogans etc.).

– Products you sell.

– Services you provide.

– Designs you came up with.

– Lyrics of a song and the melody of the song.

– A secret recipe, ingredient or business plan.

Most of these things you cannot physically touch, hence the term ‘intangible assets’, but they are very valuable to your business. We will discuss later on in this article why it is important to invest in and keep track of your IP, whether you are a start-up or a small business. For now, let’s take an in-depth look at the most common types of IP.

Types of IP

As we have stated before, IP comprises several kinds of intangible property. We have listed the most common types below.

Trademarks

You know how you can recognise McDonalds just by seeing the famous golden ‘M’ arches? That in essence is what a trademark is all about. A trademark is a phrase, name, symbol, or mark that is distinctive and represents a service or a product in a certain industry. Once you register your trademark, it belongs exclusively to you, no one can use it or copy it. This protection is awarded to you as long as you renew the application by paying renewal fees at the Companies and Intellectual Property Commission (CIPC). This renewal process has to occur every 10 years.

Requirements to meet:

Not every mark or name will meet the requirements. So it’s essential that you understand what the vetting process is. Additionally, every trademark is required to be in use for commerce purposes. A trademark that is registered and not in use for a period of five consecutive years will be removed from the register.

A trademark is registrable if:

– It is going to help distinguish the goods or services of one trader from those of another.

– It has not become customary in the field of trade.

– It does not indicate exclusively the kind, quality, quantity, intended purpose, value, geographical origin, mode or time of production of the goods or services that you are to trade in.

– It does not represent or replicate protected emblems such as the national flag or any national monument.

– It does not contain offensive, deceptive, immoral or illegal depictions.

– It does not conflict with an earlier registered trademark such that there is a likelihood of confusion in the market.

Trademark Filing Process 

The first step is to apply for a search of the register to discover if there is a similar mark that might conflict with yours. Once your search results are in and no such mark exists, the next step is to file an application for the trademark.

The mark has to undergo a few processes before it can be registered. These processes include;

– Examination to see if the requirements are met.

– Advertisement in the trademark journal (to see whether there are any objections to the trademark).

– If no objections are filed then the mark will be registered.

As you can clearly see, the process can be painstakingly slow, but the rights you are awarded after registration are worth it.

 

Patents

Getting a patent is always quite a challenge because of one requirement. The idea has to be novel; i.e. never done before. A patent allows you, as an inventor of a new design, process, physical invention (a new machine), or an improvement, to exclusively monetise your work. The protection is guaranteed for 20 years as long as you pay your renewal fees every year. Examples of well-known patents include; Bluetooth, Amazon’s 1-click button for purchases and the iPhone.

Requirements to meet:

The requirements for a patent are quite cumbersome. To pass the test, your idea needs to meet the following requirements:

– The idea or invention must be novel, or new.

– It must be inventive, i.e. will an expert in the field consider your invention to be obvious. If not, then it is inventive, if yes, then it will not pass the test.

– It must be useful to the specific field.

Patent Filing Process

Before you apply for a patent, a search needs to be conducted via the Patent Cooperation Treaty (PCT) website. This is an international database that contains patents filed from all the countries that are a part of this international treaty. You will also need to search the South African database.

Once it is established that there is no existing patent then you can file via the CIPC website. The examination process only begins six months after filing because there are certain formalities that need to take place. As with trademarks, once the examination is through, your patent will be advertised in the patent journal and if there are no objects, you should receive your certificate after two months.

We have tried to summarise the patent process for the sake of this article. The actual requirements and filing processes are a bit more complicated and go beyond the scope of this article. For more detailed information please visit the CIPC website or contact a patent attorney.

Registered Designs

An industrial design is a product whose shape or form is protected. There are two types of registered designs; aesthetic and functional. The design could relate to anything such as a circuit board layout, a website landing page, jewellery or furniture.

This type of IP only protects the way the design looks, whereas a patent protects a novel invention that solves a problem. Therefore, a registered design will not protect the functional or technical features of the product.

Requirements to meet:

For an aesthetic design, the following requirements must be met:

–  It has to be new and original.

–  It must be beautiful in shape or configuration.

–  It must be capable of being produced by an industrial process.

For a functional design:

–  It has to be new.

–  The shape or configuration is necessary for its function.

–  It must be capable of being produced by an industrial process.

Design filing process 

The process is the same as with patents except for the formalities requirement.

Copyright

Perhaps this is the most familiar form of IP. Copyright protects the literary works of authors, creators and artists. The following works are eligible for copyright protection in South Africa:

–  Literary works, e.g. books and written composition novels.

–  Musical works, e.g. songs.

–  Artistic works, e.g. paintings and drawings.

–  Cinematograph films e.g. programme-carrying signal that has been transmitted by satellite.

–  Sound recordings.

–  Broadcasts, e.g. broadcasting of films or music.

–  Programme-carrying signals, e.g. signals embodying a programme.

–  Published editions, e.g. first print by whatever process.

–  Computer programs.

Requirements to meet:

For a work to be eligible for copyright protection, it must be original and be reduced to material form.

Copyright Registration

Once you write, print, publish, perform, paint, sculpt, film or record your work, you are automatically awarded copyright rights.

 

Franchises

A franchise is a license that you are given by the owner of the business to operate a duplicate business in a different location or country. This license allows you to use their IP, and it gives you access to all their processes and trade secrets. Notable franchisee companies in South Africa include KFC, Pizza Hut, Burger King and Starbucks.

 

Trade Secrets

A trade secret refers to the unique processes or practices that give you a competitive economic advantage over others in the industry. A trade secret can be anything, really. A few examples that come to mind include; a recipe, formula, pattern, or design.

There are no specific laws that govern trade secret registration in South Africa. The protection of your trade secret largely depends on the measures that you take to guard against it becoming public knowledge. For example, to this day no one knows what gives Coca Cola its specific taste. Their formula is one of the best kept trade secrets in the world.

 

Why is IP important for your business or start-up?

Let’s discuss why your small business needs to take IP seriously. Successful companies guard their IP jealousy. In today’s world, it is one of the most important aspects of business growth and development.

There is so much value that you can extract from IP. Although it is an intangible asset, the benefits are very clear in the physical world. For example, you might be selling a very common product, but your trademark is very distinct and registers with a specific customer segment. They attach value to your brand, thus giving you a unique selling point that separates you from the rest.

Think of it this way, the success of McDonalds is based on a few things, one of them being their brand. They sell burgers, just like a lot of retailers and street vendors do, but their IP sets them apart.

 

Start-ups

Start-ups operate on a different business model compared to small businesses. The biggest mistake that new business owners make is to prioritise other aspects of the business such as marketing, research and development and hiring staff

A start-up is usually focused on innovative ideas that are likely to disrupt the industry. That said, a focus on IP is equally if not more important for start-ups. How will you manage to convince shareholders to invest in your idea if your house is not in order?

For any business, IP assets can actually be more valuable than physical assets. They can create value for interested shareholders who might actually come on board based on the IP portfolio. IP can help you solidify your place in the market by limiting competitors and making your product and service unique. You can also get an additional revenue stream by licensing your IP to companies or individuals that will pay you for it.

 

How to protect your IP

There are extra measures that you need to take to ensure that your IP is protected. Before you start pitching your business ideas, seeking investment or introducing your product or service to the market, your IP needs to be protected.

After you register there are certain steps, you can take to further your protection:

Maintain confidentiality: Always take the extra precautions when storing your IP. Limit the parties that can access your IP and have them sign non-disclosure or confidentiality agreements.

Maintain an accurate protected record: Keep an accurate record of everything concerning your IP assets. Make sure the information has dates so that you can defend your IP in the event of a dispute or an infringement.

Update every small change: If you make small changes to your logo or any part of your IP, seek advice to make sure that you are still covered. Most times you will have to register the new change so that you continue being protected.

Always be on the offensive: It’s better to protect and not defend. While it might cost you to protect your IP in the beginning, it is cheaper than trying to defend it. Minimise the risk of you losing your IP to someone who filed earlier than you.