IP protection for startups
Startups at the pre-seed stage often seek to protect their intellectual property or software innovations. There are three types of protection available:
Copyright protects the “literal expression” of computer programs, which means it can the software developers and startups can protect the source code against misappropriation and reproductions.
The copyright protection lasts for a lifetime plus 50-70 years after the death depending not the country.
Although copyright protection accrues automatically, it is advisable to obtain registration (for evidentiary reasons), which is quick and inexpensive.
Copyright protection can be useful only if someone copies the exact same source code of the software, but not when a new and inventive process or concept needs protection.
However, patents should be used when a startup wishes to protect innovative features, concepts or processes underlying the software. If such computer-implemented inventions are patented, protection is available even if the source code was not reproduced and a new source code was developed independently. The patent lasts 20 years from the filing date. Having a patent provides exclusivity for making, using, selling an invention and therefore provides a startup with a legal monopoly of the market, which contributes to attracting investors, generating revenues and increasing the value of the business.
Trade secret protection is available for confidential algorithms, data, models and formulae underlying the software. There is no requirement for registration, however, no protection is available in case of reverse engineering or independent discovery by others.
The protection of trade secrets is perpetual as long as it is kept secret and has economic value, but it loses protection when it enters the public domain. Google is known to have kept many of its computer algorithms secret.
The European Patent Office accepts algorithms that are considered computational and abstract in nature for patent protection if they can be applied to a technical problem. To pass the eligibility test, the subject matter will be assessed on its technical character. So, in order to pass the first step technical means should be introduced; for example, by amending the subject matter from “a method of performing an algorithm” to a “computer-implemented method of performing an algorithm”. The second step requires a technical contribution to the inventive step.
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