Professor & 

Lawyer 
Puttu Guru Prasad
B.Com., M.Com., M.Phil., M.B.A., PGDFTM., AP.SET., M.Phil., DRMS., L.L.B., ICFAI TMF., DIRM., L.L.M., Pre PhD (PhD)from JNTUK.,  Topper
 Introduction 

• A startup isn’t a piece of cake. People behind successful

startups face a lot of hardships mostly financially.
• As we all know a startup doesn’t instantly earn you money.
• Apart from that, a startup requires much more effort,
dedication, and time as compared to a job.
• Even if one person does all this despite facing so many
hardships.
• A person might see a fall in his startup if he isn’t aware of
the proper strategies and intellectual properties required
for a tech startup.
 What are tech startups?
• A startup company is a term used to describe a business model
that is focused on finding a repeatable and scalable model.
• A tech startup is a company that aims to bring technology products
or services to the market.
• These companies are typically focused on a specific industry or
product area.
• During the dot-com bubble i.e. when a large number of dot-com
companies were founded, the term was often used to refer to
companies already established but still in their early stages of
development.
• Due to this background, many people consider startups as only
tech companies.
• However, as technology becomes more prevalent, the essence of
startups is more about innovation and growth.
 Why do tech startups need protection?
• Many startups can’t afford to risk losing their IP rights. Getting
basic IP protection doesn’t require a huge sum of money or a
team of attorneys.
• To get basic IP protection small legal research is required with
standard fees which are not too expensive but the benefits are
huge.
• Your intellectual property rights are secured by formal
registration. This protection can help you avoid getting sued in
the future.
• When you gain ownership of a copyright or patent, the
presumption is that the property is yours.
 Why do tech startups need protection?
• When someone else infringes on your intellectual property, the
courts will presume that your IP is yours unless the other party
proves otherwise.
• Getting an IP rights holder is an important step in protecting
yourself from infringement suits.
• Getting an IP rights protection plan protects your startup from
costly infringement lawsuits later.
• The key to competitive advantage is intellectual property.
• For example, if you protect your invention with a patent, then no
one else can make/produce the same product without your
permission.
 Why do tech startups need protection?

• This is the process of acquiring and protecting intellectual

property that can be used to advantage in the marketplace by
creating your own image.
• If your startup gets into a novel idea of software or hardware
that’s ready for commercial use and you haven’t protected it yet.
• Then your entire business could be at risk as IP protection
provides stability and security for investors too.
Strategies for tech startups to safeguard themselves

• An intellectual property issue is just one of the many factors that

a startup will face when it comes to starting a technology
company.
• There are a number of issues that intellectual property can avoid
when it comes to getting a product to market before someone
else does.
• Protecting intellectual property can help you get the most out of
it.
• Here are some strategies techs can use to safeguard their
interest as well as their startups.
1. Keeping your work by the employers separate from your own
idea
• It is scary to give up your current job and start a startup for no pay.
• However, it is also very important to remember that working on your own
idea while working for someone else can be dangerous.
• This may establish a conflict of obligations which can put intellectual
property at risk.
• Most companies have various employment obligations, such as the
obligation to assign or refrain from competing for the rights or intellectual
property of their employees.
• If your side project is not approved by your employer, it is a bad idea to do
it.
• Most people don’t want to disclose their new venture to their employers.
• This can be a problem if the project is related to the employer’s business.
 2. Don’t let other people claim ownership of your IP or your
company
• Having a co-founder agreement is very important. It can help you
avoid making many mistakes down the road and it can also help
preserve the relationship.
• This informality often leads to people submitting funding applications
together, which can be very confusing and awkward for co-founders.
• When you become a co-founder, you have to agree with the terms of
your relationship with him or her. Doing so can cause problems down
the road.
• Having a co-founder agreement is very important. It sets out the
terms of your relationship with one of your partners.
• A mutual agreement with co-founders is essential.
• Below are some queries which one should clear in an agreement for
avoiding internal conflicts.
 2. Don’t let other people claim ownership of your IP or your
company
• What percentage of the company is owned by the founders? 
• What are the responsibilities of each founder? 
• If one founder leaves, what happens to the other founder’s shares and
how much commitment is expected by a founder?
• What are the key decisions that the business has to make?
• Who will make the decisions, the CEO or will be mutually decided?
• How will a founder be removed from his or her job due to certain
circumstances?
• What will be the basic investment of each founder?
• What will be their decision regarding sales?
• What happens if the founder isn’t living up to expectations? How do they
resolve the issue? (A favored approach is for any disputes to be resolved
by confidential binding arbitration).
• What are the goals and visions behind the startup?
 2. Don’t let other people claim ownership of your IP or your
company
• Understandings that are informal or vague are bound to get out
of hand.
• Keep in mind not to share information like the stakes of the
company or any idea that might bring any harm to you or your
company.
• Keep records of all the discussions and ideas from where they
came from to avoid future conflicts.
• If something changes, make sure to communicate clearly in
writing what you would like to share with them.
• This will help avoid making a mistake and undermining their idea.
• If your idea is worth a billion dollars, then it is cheaper and more
cost-effective to resolve these sorts of issues beforehand than
filing for an IPO or selling the company.
 3. Getting contributors to assign their IP rights to the
company
• Many different parties may be involved in the formation of a
company.
• So the parties involved may contribute something or the other.
• A company should get the IP assigned to them through a
contract in order to use them without hindrance.
• The owner of intellectual property rights holds that right until the
contract has been terminated.
• In some states, such as California, employees can keep their
inventions on their own time(which is apart from the company’s
work) as long as they do not use company equipment, supplies
or any other facilities.
 3. Getting contributors to assign their IP rights to the
company
• A written agreement is essential for ensuring that all rights and
intellectual properties are assigned to a company.
• Establishing the ownership of the intellectual property rights of a
startup is very important.
• Doing so will allow the startup to take advantage of the potential
of the intellectual property market.
• Any intellectual property created before the formation of a
company should be transferred to the corporation in exchange
for shares or consideration based on mutual understanding.
3. Getting contributors to assign their IP rights to the company
• All employees should agree to the terms of the Confidentiality
and Invention Agreement which acquires the assignment of
intellectual property as a condition of employment.
• Independent contractors or consultants should also sign
agreements stating their obligation to assign their intellectual
property to the company.
• An agreement that states the company’s rights over inventions
and discoveries is a must.
• As well as a non-disclosure agreement is required for anything
that pertains to any ideas, inventions, or discoveries.
 4. Evaluate your core assets and decide on the type of IP
protection you need
• Ever wonder why tech startups are reluctant to protect their
intellectual property?
• Startups are prone to losing their intellectual property rights for
their hard work, as many of them hesitate to invest in intellectual
property protection.
• Companies should evaluate their core assets and think to
themselves if they should or shouldn’t protect their intellectual
property.
• Some simple and cost-effective measures can help minimize the
anxiety of protecting your company’s core assets.
 4. Evaluate your core assets and decide on the type of
IP protection you need
• Many companies believe that patent protection is the best way to
protect them.
• However, it is often not the best way to protect their intellectual
property.
• Instead, they should consider other forms of IP such as trade
secrets, trademarks, cybersecurity policies and copyrights.
• In case someone doesn’t know what kind of protection is best for
them then one should consider an IP lawyer or anyone else who
has good knowledge about intellectual property.
 Intellectual property protection which a startup
can use according to their needs
•Patent
• A patent is a protection that a company or individual
has against the use and sale of their patented
product.
• The key issues in determining if a patent is needed
are:
• the concrete embodiment of an idea, formula or
product,
• the nature of the invention must be novel and the
reason why it should be patentable.
 Copyright
• Copyrights cover original works of authorship,
such as art, advertising copy, literary works,
articles, musical works, cinematograph films,
software, etc.
• A copyright gives the owner the exclusive right to
make copies of the work and to prepare derivative
works (such as sequels or revisions) based on the
work.
• A person can register his copyright through this 
website in India
 Trademark
• A trademark is a symbol or word that an individual uses
to identify or distinguish their goods or services.
• Some well-known trademarks are Coca-Cola, American
Express, and IBM.
• You obtain the rights to these trademarks by actually
using them in commerce.
• You don’t have to register a mark to get rights to it.
However, federal registration can give you some
advantages.
• In India, you can register trademarks through this 
website.
 Trade secret
• A trade secret is a valuable asset that can be used by
startups.
• It can be maintained for as long as its value is derived
from its secrecy and maintains its confidentiality.
• A trade secret right can be used to prevent the
unauthorized use or disclosure of confidential
information.
• Trade secrets can range from computer programs to
customer lists to the formula for Coca-Cola.
 Confidentiality agreement (NDA)

• Non-disclosure agreements are often referred to as

NDAs.
• They are agreements that prevent the disclosure of
confidential information.
• These agreements are drafted by a lawyer.
 Terms of service and privacy policy

• If you operate a website that uses the internet, you

should have good terms of service agreement in place
to prevent unauthorized users from accessing and using
your site.
• Knowing how to protect your intellectual property is
often a material issue that needs to be disclosed in
order to attract investors and acquirers.
 Geographic indications
• Geographic indications are becoming more prevalent in the
industry.
• They help identify the geographical origin of goods and services.
• A geographical indication is a sign that a product has a certain
geographical origin.
• A geographic indication is a type of designation that identifies the
origin of a product.
• It can be used to identify the quality of the goods and their
origin.
• Many agricultural products have characteristics that are derived
from their local environment and have a premium quality that is
unique to them.
 Geographic indications
• Geographical indications are granted protection under the TRIPS
Agreement.
• Part II of the Agreement sets out the minimum standards for the
protection of geographical indications.
• Some of the products that have been identified with geographic
indications include; Darjeeling Tea, Kangra Tea, Alphonso Mango
etc.
• Many of these establishments have gained valuable reputations
due to their impeccable quality.
• If their reputations are ever jeopardized, they would be exploited
by dishonest commercial operations.
• The former is easily deceived into buying products that are not
worth their while. The former are usually left with a tarnished
reputation.
 Industrial designs
• Industrial design protection provides protection for a variety of
shapes, configurations, and surface patterns, which can be applied
to a functional article. Industrial design improves the design
appearance and increases the aesthetics of the 2D or 3D design of
the product.
• According to Indian Law, industrial design protection is an
exclusive right granted to individuals who have the right to make,
use and sell the articles that contain the protected design to a
specific person. Design protection rights provide protection of your
design for 10 years which can be renewed once for another 5
years. A person in India has to register for this protection in India.
• The main and basic requirement to qualify for a design patent is
that it should be novel and original, it should be functional, it
should be non-obvious and there should not be any prior
publication or disclosure of the design.
 Conclusion
• Tech startups are for persons who either have a lot of
investment as well as a lot of experience.
• But there are some brilliant minds who think of tech startups but
lack financially.
• At many times companies/persons trick people who come up
with great ideas for their startup.
• It’s better to be safe rather than being sorry later.
• Apart from that, lawsuits regarding conflicts of Intellectual
Property can be costly.
• So one should get IP protection for their startup as per their
need.
• You never know how much your startup can yield you. So it’s
always good to protect your idea which can fetch you a lot of
money rather than getting your unprotected idea stolen.