Protecting Your IP in a Pitch CompetitionFavour Owhuvwie
The era where start-ups and SMEs barely considered intellectual property (IP) as part of their overall business strategy is far gone. Intangible assets, including intellectual property, make up for about 30-40% of the profit margin of most businesses today. In fact, some businesses deal solely on the intangibles. It is therefore very important to consider IP protection at every stage of the business, including at the seed or incubation stage.
Intellectual property arises from novel or original expressions, which could take the form of copyrights, trademarks, patents, designs, etc. Every start-up has at least one intellectual property. Logos, designs, colours, customer databases, clients’ lists, manuals, software, etc are all intangible assets, which can be protected under intellectual property.
Most innovations are products of novelty or originality. In essence, a start-up is putting forward what good or service it can provide distinct from that of others. Novelty or originality in this sense does not imply an out-of-this-world idea coming to life but rather, being able to establish a difference between your good or service, and that of related businesses.
Imagine coming up with a groundbreaking idea and turning the same into a beautiful innovation. You cannot wait to pitch your great idea before potential investors, competitors and organizers of a pitch event.
Before you do that, wait!
There are certain precautions you have to take with regards to your beautiful idea before making it public.
The purpose of a pitch competition is usually to present your innovations before the organizers of such competitions and potential investors. It is putting your stuff out there for others to see. This could help a start-up get seed funding for its projects, attract investors, and display what it can offer. It could also make room for collaborations as well as identifying competitors.
Why Secure Your IP?
Safeguarding Your Pitch Against IP Infringement
Protecting a start-up’s intangible assets using intellectual property from the very onset is vital. This ensures adequate protection before going public with the idea. And prevents theft of the start-up’s ideas during the pitch presentation by organizers or potential competitors.
Prior IP protection has two advantages for the start-up, that is, the “defensive” benefit and the “offensive” benefit.
The defensive approach, also known as “protection and blocking” ensures that the start-up has in place the appropriate mechanism – IP protection – to prevent its IP from being infringed on. In addition, it would provide a basis for counter-infringement claims in IP litigation. It also serves as a barrier to market entry, blocking competitors from entering the same market.
The offensive approach would allow a start-up to sue to protect its intellectual property rights (IPRs) in the event of an infringement. It also gives the start-up competitive edge when negotiating licensing or out-of-court settlement deals.
Time-Bound Nature of IP
Some classes of IP by nature are time-bound, that is, a period or window of opportunity is provided to allow for the necessary IP protection for any idea that is released during a pitch competition without adequate IP Protection, before falling into the public domain. Hence, to ensure adequate and timely protection, such classes of IP ought to be registered within a given time frame. For instance, patents under most national laws have a period of grace of twelve (12) months within which patents that have been made public ought to be applied for to be protected.
The implication is that if a start-up presents an invention during a pitch competition without having filed for a patent grant, it only has a period of one year to file for it; otherwise, it would lose protection and fall into the public domain. Hence, it is of utmost importance for a start-up to protect its IP before a pitch competition. For instance, if SmartTech, a tech company that produces microbots, displays its microbots at a pitch competition before patenting the functional aspects of those microbots, it has a period of grace of twelve (12) months to apply for patent grant.
Boosts Investors’ Confidence
Safeguarding your IP before a pitch competition gives your business a sense of seriousness that is attractive to potential investors. It shows the meticulousness of the idea or business owner as well as his IP due diligence.
How to Secure Your Idea Before and During a Pitch Competition
Limit the amount of information you let out during a pitch deck
In a pitch deck, the information a start-up owner lets out should be limited to only the basics, that is, enough information to pique the interest of potential investors but insufficient to be stolen or misappropriated.
Execute non-disclose or non-compete agreements
In situations where giving out just basic information would not cut it, it is imperative to execute a non-disclosure or non-compete agreements with the pitch deck organizers beforehand. That way, if your idea gets stolen, you can hold them liable.
Seek proper protection of your IPRs
While it is very important to consider various means of securing your IP before a pitch deck, actual and adequate protection of your IPRs is of utmost importance. This is because of the defensive and offensive benefits that accrue to the start-up.
Keep a trail of documentation
Having a good record of all transactions leading up to the pitch competition would leave a trail that would assist the start-up in proving ownership in the event that the need arises. These include emails, receipts, letters and other correspondence, etc.
The importance of prior protection of IPRs before a pitch competition cannot be overemphasized. The overall benefits far outweigh the often misconstrued perception that IPRs’ protection is expensive.
DISCLAIMER: This article is written for educational purposes only and should not be construed as legal advice. Consult a lawyer for tailored legal advice.