Startups

For the new technology Startups, there is always the question as to whether they should patent their new technology or simply keep it a secret. In fact, this depends on the Startups’ business strategy and whether the invention or technology is patentable or not. If it does not meet the patentability criteria, then it can only be protected as a trade secret.

There are essential similarities and differences to be considered in choosing between patent protection and trade secret protection for a new technology. A comparison of these two types of IP protection follows:

1. In terms of scope, patent protection is more limited than trade secret protection because a patent must satisfy all statutory subject matter as to (i) the novelty, (ii) the inventive step and (iii) the capability of industrial application in order to be patentable. By contrast, trade secret protection can be asserted for any type of information or idea as long as one can safeguard the information or idea from disclosure to and use by others.
   
   
2. As to the degree of disclosure of the new technology, a trade secret simply requires secrecy, while a patent requires full disclosure. In fact, if the intended use is public in nature, then patent protection should likely be sought thus giving the patent owner the exclusive right to defend the patent against any infringement. In contrast, because a trade secret is not granted as an exclusive right, it is more difficult to protect and defend against an infringement.
   
   
3. Patent protection is acquired through a legal process that incurs legal fees for patentability assessment, application preparation, application submission and the subsequent maintenance. Since trade secrets do not require extensive legal procedures, the cost to maintain its trade secret status is dependent only on the measures necessary to maintain its secrecy.
   
   
4. Regarding the duration of protection, patent protection lasts in general for up to 20 years, while a trade secret may continue indefinitely as long as it remains a secret.

As to the comparison mentioned above, if the new technology is eligible for either patent or trade secret protection, then the decision on how to protect it depends on business considerations and the weighing of the relative benefits of each type of IP.

Trademark is valuable in being an effective communication and branding tool that allows customers to know the origin of the products. The process, registrability and requirements for trademark registration will vary in each country. One of the most important factors in determining the registrability of a trademark is the requirement that the mark must be sufficiently distinctive such that it is capable of identifying and distinguishing the goods or services being proposed from that of other goods or services. A trademark may be either inherently distinctive or, alternatively, be likely to acquire a secondary meaning or distinctiveness as a result of recognition by the relevant public after a period of use. While the degree of distinctiveness may differ according to the country, the trademark owner should avoid descriptive words in the application process that are overly generic, thus increasing the registrability of the proposed trademark.

Because trademark rights are territorial in nature, it is recommended that, prior to filing a trademark application, the Startups conduct a trademark search in the country where they would like to sell or license their products, so as to ensure that it is not identical or confusingly similar to existing marks in the relevant category of products.

In order to further avoid infringement issues from another companys trademark rights, the following steps are recommended: [i] search relevant dictionaries for similar looking or sounding words in all relevant languages, [ii] examine the use of the mark in the relevant marketplace, including that of well-known marks, and [iii] check the availability of all relevant domain name and business names.

There are numerous systems for filing trademark application depending on the countries designated by the applicant. The application can be filed under the Paris Convention, the Madrid Protocol or under other Multinational Trademark Rights conventions such as the Community Trademark (CTM) or African Union (OAPI). The Madrid System is a good choice if the Startups are in a member country of the Madrid Protocol and all or most of its target countries are also members. The Madrid system allows trademark owners to seek registration in member jurisdictions through means of a central filing system which allows just one application, prepared in one language, and with fees paid in one currency.

However, Startups should be aware of a potential drawback under the Madrid protocol which occurs due to the fact that the underlying application impacts the international registration for the first five year, and thus the registration has the risk that it may not be assigned at all in the applicants selected countries. Also, it is important to note that the Madrid protocol does not cover all countries around the world. Therefore, Startups might need to a file trademark application through Paris Convention in some counties to cover all the designated countries.

Licensing agreement is a useful tool if Startups would like to become a world player but do not have enough funds to manufacture their products themselves. It allows Startups to garner profits globally without having to establish local businesses in numerous countries, thus reducing the need for capital investment. A licensing agreement grants permission by an owner of an IP right (licensor) to another party (licensee) the right to use the product for a prescribed period of time, while allowing the Startups to retain the right of ownership of the product or new technology.

Before entering into a licensing agreement, Startups should seek to qualify any potential licensees in the target country by investigating their reputation, experience, and financial condition and whether the licensees handle other products that might conflict or compete with the licensed products being proposed. Following this step, Startups should conduct another step of due diligence aimed at analyzing the potential risks and benefits that affect the value and success of the products and/or technology being proposed developing strategies for overcoming the risks and capitalizing on the benefits as presented assessing the legal and business environment and gathering information on the proposed market and technology, including any competing products or technologies in the market, whether existing or being developed.

Both the Startups and the potential licensee should do such due diligence. It is highly recommended for the two parties to enter into a confidentiality agreement before beginning the due diligence or negotiation process, as each will be required to disclose confidential information.

Subsequent to the completion of the due diligence, but prior to the final negotiation of the licensing agreement between the Startups and the potential licensees, a valuation of the licensed products and/or technology is needed in order to set the basis for a mutually satisfactory and profitable future relationship.

In order to structure a mutually beneficial license agreement, the following are some of the key issues that need to be considered:

• the scope of the license
• the geographic territory
• the royalty fees and rates
• the exclusivity of license rights (whether exclusive or non-exclusive)
• any sublicensing rights
• the duration
• the scope of use
• the quality-control standards and procedures
• cross-licensing,
• and a termination provision

It is in the interest of both parties that the Startups and the potential licensee present a business and marketing plan as it relates to the prospective license agreement. Such a plan should outline how the Startups will provide technical assistance and support for the product/technology to the licensee in a manner that will help them generate income more quickly, thus benefiting the Startups via royalty income.

It is also recommended for the Startups to enter into a trademark licensing agreement in order to retain ownership of the trademark and the associated goodwill during their international expansion and the associated building of their brand.

It is recommended for Startups to select a domain name that is the same or similar to its business or trademark. Those top-level domains [TLD] with the. Com; designations are generally considered around the world as having the most valuable and best-known category. However, if the Startup would like to adopt a new domain name that is not the same as the trademark it already owns, it should check to see if that domain name is available and also do a trademark clearance search to ascertain that no other partys trademark rights would be infringed.

To register domain name in Thailand under .co.th for business organization in Thailand, the applicant must be a company registered under the Thai law or a foreign company that has representative in Thailand, the representative must be registered under the Thai law and entitled by the foreign company for domain name registration.

The domain name must be accord with; be part of; be an abbreviation of the company name. Each company can register only one domain name. Trademark or service mark can also be registered as a domain name under .co.th, the condition is the mark needs to be a registered trademark in Thailand or outside of Thailand.