Is IP protection worthwhile?

Q) I am the owner-manager of a fast growing barcode app service which allows users to access more detailed information on a brand or service through their smartphone. I founded the start-up five years ago. Until now, we have had limited resources to protect all the IP elements of the company. I read recently that only one in five IP disputes settle in favour of the rights holder, making it highly costly even with adequate protection. Is there any point spending money on IP protection?

A) As a young, high-tech business, your intellectual assets - your brand, source code, technical innovations, etc. - make up a large part of the value of your company.  It's important to protect these adequately to deter competitors, and also if you want to attract investment.

But IP protection can be expensive, and you're not alone in wondering how much it is worth spending.  It's important to think strategically about what rights to register, and when, to avoid over-spending.

Registering your company name and app name as trade marks, along with any distinctive logo or icon, is highly advisable.  This can prevent competitors from offering competing services under the same, or similar, names.

Patents protect technological inventions.  Software apps are at the margins of what can patented.  However, if your app contains low-level technical innovation, such as a new image-recognition algorithm, it could be worth investigating patent protection.  Copyright and design rights can also help protect your software.

Registering IP rights can be expensive.  However, these costs are typically spread over several years, and can be managed so as to scale with your business. 

The vast majority of IP rights are never enforced through courts.  Most disputes settle out of court, often in licensing deals.  Court statistics also don't reflect the powerful deterrent effect IP rights have against potential competitors, often dissuading them from even entering the same market as you.

Dramatic headlines about multinationals fighting each other in court can be off-putting.  However, please don't let this deter you from securing adequate protection for your company's valuable assets.

Tim Wilson, Associate
First published in the Financial Times, August 2014