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Many EU based startups operate in an intellectual property intensive environment. During my career, I (IP lawyer Erkki Holmila) have encountered a lot of myths and misunderstandings regarding intellectual property. Here are some of the most common ones:
Myth 1 – Registration is the end of the matter
Many companies mistakenly believe that when a trademark is registered or patent is granted, that’s it, your registration or patent is final and you can use the trademark or invention without worrying about infringing others’ intellectual property. It is possible that a registered trademark or patented invention cannot be used without infringing other intellectual property. It is also possible that post-registration challenge is made to the validity of trademark or patent. This happens especially in infringement cases where stakes are high.
Better view: Having a registration or patent is a good indication that all is well. With the passing of time and expanding the business, the risk of infringement decreases and may eventually lose completely.
Myth 2 – Software cannot be patented
This is a commonly held view. However, there is no blanket prohibition for patenting software products. It is true that often it is difficult to find patentable inventions with software products but if it fulfills the same patentability criteria as other inventions, it is possible to get it patented.
Better view: Before disclosing your invention to public, check with your patent attorney whether your software related invention can be patented or not.
Myth 3 – Your company automatically owns the work it commissions
If you order a graphical layout for your website, new logo, user interface, or marketing materials, make sure that rights to these materials are conferred to your company. Copyright automatically arises to natural persons making the work. So if you order, let’s say, marketing materials or logo from a design agency, make sure that the design agency expressly assigns full copyright to your company. Such transfer does not happen automatically merely by commissioning and paying for the work.
Better view: Make sure all intellectual property is expressly transferred to your company from your employees and contractors.
Myth 4 – Intellectual property benefits mainly big companies
Intellectual property benefits companies of all sizes. Often strong intellectual property portfolio is the main component in competing with big companies. Smaller companies are often more creative and innovative, and larger companies rely on startups to come up with new solutions before buying them out. Intellectual property is a key component of this cycle. Startups get routinely acquired because they have come of with a better or smarter way of doing things.
Better view: Intellectual property is size neutral and is often the best asset of a small company against bigger ones.
Myth 5 – China
There are many myths, “truths” and legends about China. The most common, perhaps, is that there’s no point in protecting intellectual property in China because it gets copied or stolen anyway. If you do not protect your intellectual property in China, some else will and can cause you problems for example in manufacturing in China. Also, as Chinese companies are innovating more and more and creating more brands, it is also in their interest that there is a strong intellectual property protection in place. Almost 90% of patent applications in China are made by Chinese companies.
Better view: China is a hugely important market in protecting and generating intellectual property, and not protecting your rights there can lead to serious problems.