Think HBR

Smart IP for a smart city

Will Hird , Marion Heathcote , Gavin Recchia, Lauren Eade
Davis Collison Cave – The Newcastle Team
It’s set to be an exciting year for innovation in Newcastle. Smarter Cities initiatives are underway including cabling projects for “living labs”, TAFE “sandboxes,” incubators are flourishing, the University’s new city campus is almost complete, and of course local innovators are working hard.
It goes without saying that IP rights are critical to innovation. However, the start-up phase can be a difficult time for IP protection. On the one hand, start-ups are increasingly aware that a failure to take appropriate IP protection measures in the start-up phase can result in valuable IP rights being irretrievably lost– and of course, of the undeniable value of strong IP rights when seeking investors (as one of our clients recently put it, “venture capitalists just love patents”). On the other hand, broad IP protection can be a substantial cost for start-ups, often when they are least able to afford it. This can lead start-ups to conclude that IP protection is an all or nothing business, and that if they can’t afford to invest in strong IP protection across the board, they shouldn’t bother at all. Nothing could be further from the truth.
The innovation boom in Newcastle is therefore a great opportunity to think about the many cost-effective measures start-ups can take to strategically position themselves to capitalise on their IP in the future.
The one thing that almost all start-ups (and all businesses) have in common is a brand concept which is underpinned by a trade mark. The good news is that, provided a start-up selects its trade mark with care, trade mark protection is a low cost exercise. There are also some steps you can take to ensure the trade mark registration process is smooth:
• Select a mark that is individual and unique. Avoid descriptive names, e.g. ‘Salty Crackers’. Know your market. Look at your competitors and distinguish yourself.
• Make sure that the rights in any parts of your trade mark which are created by third parties (eg. Logos designed by creative agencies) are assigned to you.
• Search it. A simple search on the name can help gauge whether it’s unique, but it will save you time and money in the long run to have a professional advisor conduct a ‘clearance search’ to ensure the trade mark is able to be used and registered.
Proper trade mark protection ensures that start-ups can extract full value from their future investment in marketing, avoids the potential risk of costly rebranding in the case of unforeseen conflict with third party rights, and can help attract investors.
While seeking patent protection is often considered an expensive exercise, the reality is there are also cost-effective strategies start-ups can take to protect their innovations so as to ensure that valuable IP rights are not eroded. Start-ups should regularly review their innovation output to consider what IP may be protectable. This can assist in prioritising investment in IP protection on the highest value IP rights, but also enables start-ups to take appropriate measures to preserve their rights. For example, if the innovation output includes patentable innovations in the development phase which cannot yet be registered due to resource constraints, start-ups can take measures such as avoiding public disclosures of innovations for as long as feasible to improve the prospects of registering a patent at a later date, when resources permit.
Smarter Cities initiatives such as “living labs” and sandboxes are fostering a collaborative model of innovation, which will promote faster and more efficient innovation. However, start-ups should bear in mind that collaborative innovation has challenges for IP ownership. If you are using third party facilities or input in your innovation (for example, “living labs” data, third party software, patented technologies or an innovation partner’s skills), consider who will own the innovation, and whether agreements with third parties are required to secure your rights to protect or commercialise the innovation. If so, it is far better to settle the terms up front than in the commercialisation phase.
For further information contact Davies Collison Cave on (02) 4960 8366, email or visit