By Geetha K
These days, we can’t go anywhere without seeing a McDonald’s® or Starbucks®, and while it may be difficult to imagine – they were once start-ups too. The former began as a single burger store in Illinois, USA and has since ballooned to a massive 35,000 outlets in 119 countries. Starbucks® Coffee, meanwhile, started in 1971 and sold quality coffee beans and related equipment. When they finally started selling coffee beverages, they stumbled upon something with enormous potential. Starbucks® now has around 21,000 outlets in 63 countries.
But let’s start at the very beginning. How did these stores, dealing with common non-sophisticated products, even succeed as start-ups, much less grow into the international business operations they are today? Where do Intellectual Property rights come into play?
What do people want?
A business that brings in repeat customers tends to have a certain uniqueness to it, so start-up owners will have to look at features and characteristics of businesses that attract customers, find something that stands out about their start-up idea and properly conceptualise, articulate, and document these features. Everyone knows that a successful business will spur copycats, “me-too” products or identical business models. You need look no further than the emergence of familiarly-styled coffee chains following the Starbucks® boom.
But I’m just a start-up – do I need to care about potential competitors?
In short, yes. You don’t want to wait until it’s too late and all your blood, sweat and tears have gone to waste. So here’s what you can do. Firstly, your business / product / service name(s) can be registered as a trademark. Once done, no one can use an identical or substantially similar mark for the same type of business or products – not even ex-partners, shareholders, ex-employees or suppliers. Your trademark identifies your business to the public so it is very critical that the trademark is registered promptly (it is more affordable than you think!).
Next, you should have a consistent “trade dress”. The importance of this particular right will of course depend on the nature of your start-up. Trade dress includes the ambience and colour scheme of your store, “cultural” elements, type of music played, even the floor colour – basically, any aspect of the store that is unique. Other aspects of trade dress include uniforms, menu cards, cutlery, furniture, and so forth – some of which can be protected by acquiring Industrial Design Rights or Patent Rights (the former being for the outer appearance of the products and the latter being for the function of the products/processes). So when a customer deals with you, he/she will recognise these as your defining features.
Can you keep a secret?
Trade secrets (also known as confidential information/trade know-how/secret formulas) refer to any information or business aspect that is not publicly known or easily accessible. This can include supplier/customer lists, customer demographics, sales pattern variations on a weekly, monthly or annual basis, pricing policy, staff remuneration package, etc. All trade secrets and documents containing trade secrets should be scrupulously managed and information should be given on a need-to-know basis. Merely marking files or documents as “Trade Secret” or “Confidential” is not sufficient if there is no control as to who has access to these files. Likewise, merely depending on copyright protection is not sufficient. Any confidential documentation should be handled as a trade secret.
So how do you protect your brilliant ideas?
Well, it’s simple – don’t discuss it until you’ve executed it. Or, if you simply must discuss the idea or business proposal with someone, you should enter into a simple Confidentiality or Non-Disclosure Agreement (NDA) with the other party. With such an agreement in place, an action for breach of contract can be pursued in the Courts in the event that any copying takes place.
In a nutshell…
As your start-up grows, it is often necessary to engage professional advisors who not only ensure that quality and standards are maintained, but also ensure the efficiency of your operations. Source identifiers, such as trademarks, trade names, patent and industrial design rights, confidential information and all Intellectual Property rights should be properly managed and enforced against any infringers. Even at the beginning.
Disclaimer: This article is by no means comprehensive and should not be treated as legal advice. For specific and detailed advice, do consult experienced IP professionals.
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