10 myths about intellectual property rights

Like it or not, the legal system and its treatment if intellectual property rights can impact your startup’s success. Photo: State Library of Victoria Collections

The ongoing legal wrangles between Apple and Samsung have resulted in a fierce global debate surrounding intellectual property rights. Questions have arisen over whether the patents horded by established companies can stifle innovation from startups. Entrepreneurs also wonder what they can do to protect their intellectual property rights, if anything can be done at all.

Here, we examine 10 myths about intellectual property rights, and look at the recourse that startups have to safeguard their interests. The bulk of this article is based on a talk given by Professor David Llewelyn at Techventure 2012. David is the deputy dean at the School of Law, Singapore Management University.

Myth #1: Patents are the most important form of intellectual property rights (IPR).

That really depends on the country you operate in. In China, for example, there aren’t adequate protections for IPR. So people don’t play by the rules. The state and provincial governments often have no motivation to protect IPs, since improving efficiency in companies could lead to less employment, and government officials are keen to portray themselves as job creators. But that is changing, since the country is now facing a labor shortage. Nonetheless, the situation stands in China that acquiring customers and building market share remains far more important than enforcing your rights.

Whether patents are supremely important also depends on your industry. In research-intensive industries like material engineering and biomedical sciences, patents matter a lot more. Not so in the consumer internet space, where branding and distribution takes precedence.

Myth #2: Having IPR in Singapore is enough.

Singapore is a small country, too small to be considered a viable market for many startups. Just because you’ve applied for a trademark in one country doesn’t mean that it is enforceable in another. So, due to the fact that IPRs are bounded by sovereignty, startups that have a regional outlook should apply for IPRs in every country they want to enter.

Myth #3: IPRs restrict the flow of ideas.

As much as we hate the patent battle raging between Apple and Samsung, IPRs are necessary to protect products, processes, and expression of ideas. What needs reform, perhaps, is the bar by which an idea is considered enforceable. Also, disincentives could be introduced into the legal framework to discourage patent trolling.

Myth #4: We should all copy the US of A.

Asian entrepreneurs are well known for taking advantage of IPR arbitrage by copying Western ideas and implementing it in their home countries. While this has worked in many cases (think Groupon and Birchbox clones), blinding implementing Silicon Valley ideas could very well be a fool’s errand.

Myth #5: Getting the IPRs is the hard part.

It’s actually pretty easy. So easy that entrepreneurs frequently don’t think about why they acquire the rights. Startups must think about how getting IPRs fit in with their commercial objectives. After all, with the limited resources startups have, they might end up spending an excessive amount of time applying for patents, trademarks, and so on without devoting sufficient effort to product development, go-to market strategies, and customer acquisition.