In our investment work, we did a lot of legal due diligence for venture capitals and investors. We found that some technology companies tend to neglect taking steps to protect intellectual property assets. But if you are a technology company, what else would be more important apart from your team if it’s not your intellectual property assets?
Essentially, intellectual property (IP) assets refer to a set of legally recognised assets under the law like copyrights, trademarks, industrial design, and patents and so on. But in this post, we’ll focus on copyrights and trademarks as they seem to be more common IP assets that generally apply for technology companies.
Let’s take a look at our simplified checklist below.
1. Do you own your technology?
It is crucial for companies to ascertain if they actually own the technology.
For instance, when an early-stage company is just starting out, it may have outsourced certain product development to a third party like an outsourced software developer (as opposed to developing the MVP or prototype in the house).
In this scenario, IP assignments need to be made by everyone involved in the creation of IP assets. In other words, there needs to be necessary IP assignments by all developer, service, any business agreements with another party and in all employment, consulting or advisor agreements to the company.
2. Have you protected your technology?
Usually, the most important intellectual property asset for a technology company revolves around its underlying source code.
Under Malaysian laws, any company can protect its source code by voluntary filing to Malaysia Intellectual Property Office (MyIPO). Source code falls within the scope of a “literary work” under the Copyright Act 1987.
This is different from a trademark which refers to a sign, design, or expression which identifies products or services. To protect your trademark, you need to file trademark filing to the MyIPO. This can be done by engaging a trademark agent or by self-filing. Before filing, the standard practice is to doa search on the current database and see if they are any similar trademark filing that may have been done over a similar name or logo. A good trademark agent would be able to highlight your prospect of succeeding in a filing application or if it may be better if you change your name.
As a technology company or startup, you also need to decide on the level of protection. IP protection is territorial in nature. In other words, you need to file a separate filing in every country that you wish to protect your IP assets.
Previously a company is required to engage a trademark agent to do filings in every country that it seeks to be legally protected. But thanks to the newly-amended Trade Marks Act 2019, companies can now file worldwide protection over its trademark by a single filing to the MyIPO.
3. How do you monetize your technology?
When it comes to monetising your IP assets, for a technology company, you need to demonstrate proof of your IP ownership. So if you have an unclear IP assignment, it may be more difficult for you to monetise your software or services.
Owning a technology itself does not automatically generate money for a business. A technology company generates income by licensing the use of its certain software like ‘Software as a Service’ (SaaS) which can be a B2B or B2C solution.
Having a term sheet in place can help save cost and time.
Are you planning to protect your IP assets for your technology company or startup? Take a look at our legal services for startups and jump into a free 30 mins initial call with a startup lawyer and we can run through the steps again.