How start-ups and businesses can protect their unique selling proposition

While numerous businesses, as well as start-ups, have designed innovative medical equipment to help contain the spread of the novel coronavirus, there are reports that almost 95 per cent of the products being sold in the market, including those on e-commerce platforms, are either counterfeit and/or fake. Thus this is a great time for counterfeiters to list their products and reap huge benefits whilst encashing upon the goodwill and reputation of well-known brands. Simranjeet Singh, Partner and Aadhar Nautiyal, Associate, Athena Legal thus reason that it is imperative for start-ups and businesses to carry out mandatory registration of IP

The outbreak of COVID-19 across the globe has led to a massive rush for the procurement of medicinal products. Resultantly numerous start-ups have emerged in a short span of time in the medical equipment eco-system, manufacturing products like ventilators, face shields, respirators and etc. In light of the sudden surge in such start-ups, it is necessary for such companies to focus on guarding their Intellectual Property. To do so it is incumbent upon such start-ups to mandatorily register their IP including patents and trademarks in order to reap benefits arising out of the same for a long period of time.

IP is a tangible asset for the registrant and has an immense commercial value associated with it, which makes it imperative upon start-ups to ensure that their IP is duly registered and protected so as to enjoy exclusive commercial rights arising out of it and to prevent anyone else from reaping benefits out of their ideas and products. IP Rights permit a start-up to compete effectively against large companies and are crucial for businesses as they drive innovation resulting in the delivery of better services and products for consumers. IP further provides a competitive advantage to an entity and incentivises innovation. Start-ups should patent their innovative ideas to alter the status quo and succeed against larger rivals. Patents also promote valuation since patented ideas are likely to attract more investors. Thus it is essential that any Start-up protect their valuable trade secrets to prevail upon entities who seek to use the same technology and trade secrets for commercial gains. To do so it is necessary that the innovation is patented and the trade origin function of the same is safeguarded through registered trademarks.

A patented idea can only be commercially exploited by the Patentee whereby leading to the creation of unique products and services with a higher chance of success. IPR’s prevent rival companies and/or entities from copying or stealing ideas thus preventing deterioration of profits and strengthening brand integrity. Similar to Patents, Trade-Mark registrations should be mandatorily carried out by start-ups in order to create a brand that is easily distinguishable, to enjoy exclusive rights over the product, to increase goodwill amongst the common public and to enjoy statutory protection under the law. Without a valid Trade-Mark, a consumer would not be able to ascertain as to whether a product belongs to a specific company or not and further certifies that the consumer has purchased a genuine product. The quintessential check that every Start-up must carry out is to verify whether the proposed mark is already registered or not.

It is an established fact that protection of IP by a start-up can materially alter the valuation of the company. Therefore, start-ups in the field of medical devices should also aim at registration of their IP internationally to secure a higher level of protection. An application qua registration of IP including trademarks and patents may be filed with WIPO after obtaining IP registration within the local jurisdiction. This provides greater incentive, inasmuch as it permits start-ups to increase their areas of business operations whilst enjoying the protection of their IP across various jurisdictions.

Thus it is imperative for Start-ups to carry out mandatory registration of IP before the concerned office of the Controller General of Patents, Designs and Trademarks for products being manufactured and sold by the company. Absence of valid registration and/or license would not grant statutory protection under law thus only giving rise to an action of Passing-Off which is difficult to prove before the court inasmuch as the burden of proof is higher. Subsequent to registration of IP before the concerned regulator, it is vital that a constant vigil and monitoring process be followed on the portals for IP registration The same is stated as many individuals as well as entities try to get their products and equipment registered which may be blatant knock-offs or deceptively similar to the products of the registrant with the intention of securing IP rights frivolously. In such a case immediate oppositions and applications seeking cancellations are required to be filed against such individuals and/or entities.

In light of the aforesaid, it is incumbent upon start-ups to ensure registration of their Intellectual Property and constant monitoring with respect to any sort of infringement and/or counterfeiting. Stringent action may be initiated against counterfeiters/infringers by approaching the Hon’ble Courts, whereby citing immense urgency. With medical equipment being of utmost necessity in the current scenario, the courts would be inclined to hear such matters at the earliest inasmuch as not only does such counterfeiting and/or infringement cause a detrimental and adverse impact on the common public but also further poses risks towards the front-line workers i.e. doctors, nurses and other medical staff working day in day out to protect the country from the spread of COVID-19.

(Views are the authors’ own and do not constitute legal advice)