When it comes to start-ups, the sobering reality is that at the very early stages, any project would be more concerned about the business feasibility, numbers and go-to-market plan, rather than esoteric concepts such establishing a intellectual property (IP) strategy. This statement can be pragmatically backed up by practising lawyers dealing with the fallout from issues which could have been better tackled early on in a project’s infancy.

Deo Falzon

In the early conceptual stages – regardless of the eventual subject matter, at its core, every start-up entails an idea (or a series of ideas). Even if the eventual subject matter, when fine-tuned and fully expressed - could some day constitute a form of registrable IP, at the conceptual stage it could arguably be too premature to constitute a formal, protectable IP which ticks all the boxes required by statutory protection and which generally always requires the specific IP to be fully rendered in a tangible and expressible format.

However, even before delving into the actual product or service, a start-up needs to be aware of IP when conducting early discussions between project backers, including any co-contributors who need to think through the legal setup within which they will vest their project and its deliverables, be it an entity with separate legal personality such as a company, a partnership or alternatively opting for a joint venture agreement with carefully considered clauses.

Other important issues to keep in mind are the eventual commissioning of any independent contractors or discussions with potential investors which a start-up would need to start disclosing its ideas to. When a start-up is just working with vague ideas and research results, without any tangible product or service having been rendered – the confidentiality of the work carried has to be protected regardless of its quality, and this is where contractual agreements and non-disclosure agreements come into play.

In Malta copyright protection is statutorily established as soon as the original content is created

At this stage, the start-up should not be concerned with obtaining formal intellectual property protection for its standalone product or service but rather to ascertain that its background and preparatory work is well taken care of and protected from instances such as team members running of with an idea, or portions of it, or even initially interested investors simply choosing to do it on their own steam.

A frequent stumbling block encountered by start-ups is in gauging the appropriate form of intellectual property right which is best suited to cover the relevant commercial interests. Photo: Shutterstock.com

Moving on to the development stage, a frequent stumbling block encountered by start-ups is in gauging the appropriate form of intellectual property right which is best suited to cover the relevant commercial interests as well as managing the expectations of what an IPR can concretely provide. The primary consideration to be made here is related to what distinguishes a start-up’s product or service from other third parties? Is it the innovation element which is critical to its competitive advantage? Is its creation completely novel and does it do something entirely different from the rest of the market? Is it something which can be easily reverse engineered?

Looking at patent protection for instance is not for the faint of heart. Even when surmounting the patentable subject matter hurdles – that is, ensuring that the innovation is sufficiently novel – involves an inventive step and is capable of industrial applicability. An inventor would need to commission search reports to check whether their invention and its corresponding claims have already been discovered and disclosed. Even then, a start-up has to consider the value added that a patent can add on to any specific project, if any.

If a start-up is dealing with the generation of new content, then luckily in Malta copyright protection is statutorily established as soon as the original content is created. Copyright protection can range from artistic works to literary works including the expression of a specific computer program. Even a database can qualify for copyright protection in the correct circumstances. Naturally even if copyright can automatically come into existence, there are various best-practices and questions that need to be asked especially when content is being generated by various team members or potentially being inspired or obtained through third-party sources including open-source repositories which can greatly affect the value of any IP. Of equal concern is an assessment of whether any contributing intellectual property to the project has been legitimately obtained.

Most start-ups would also be involved in creating a specific look and feel by investing in branding their offering, a concept best tackled by trademarks. This is essentially the obtaining of registered protection for distinctive devices used in conjunction with specific goods or services and these require careful jursidictional clearances to avoid any situations of identity or similarity with pre-existing third parties.

In practice then, considering the breadth of IP rights available, a start up would be involved with all major forms of IP, the question at that stages becomes one of priorities. Which IP right would should be given priority – (when balanced with the commercial realities of a project) - to invest in and consult upon.

This article is a follow up to a webinar organised by Fenech & Fenech Advocates’ TMT and IP Department that took place on World IP Day 2022 themed, IP and Youth: Innovating for a Better Future. The webinar is available at www.fenechlaw.com.

Dr Deo Falzon is an associate at Fenech & Fenech Advocates practising in the TMT and IP department.