Let’s know more about it from Raddhika Singh, Managing Partner, and Founder, Aletheiaa Legal. It is a law firm specializing in IP, media & entertainment, commercial contracts & IT Law that has advised 300+ startups.

Here’s what we’ll cover in this discussion.

What is an IP?

IP is called Intellectual Property. It is the mind’s creation that’s used commercially. Examples, Inventions, literary and artistic works, designs, names, and images.

Different Types of IP

There are four main types of IPs:

Trademark

Brands claim trademarks as an IP for their products, services, company name, business, slogans, taglines, or domain names.

Copyright

Any business that creates original literary, dramatic, artistic, musical works, sound recording & cinematograph films claims to copyright as an IP.

Designs

Manufacturing companies come up with their own innovative designs and unique aesthetic features on a product, unique products over which they can claim the design as an IP.

Patents

A novel innovative idea having an inventive step is patented and claimed as an IP.

How to Commercialize an IP?

We commercialize an IP in three ways:

• You keep it for your personal use.
• You use it commercially and earn revenue by leasing it to a third party. The third party pays you a royalty. The IP’s ownership stays with you (IP creator).
• You can assign it for a value to a third party or sell it to a third party.

How to Generate Income by Licensing Your IP?

The basic licensing allows a third party to use your brand’s information that pays you a royalty in return for it. Nuances of each IP agreement will be different depending upon the understanding between the parties. There are different modes of licensing your IP. Let’s know about all of them one by one.

Trademark

You can generate income by a trademark in three ways:

Trademark licensing by a parent company to its subsidiaries:

If a company situated in Singapore needs to use the same product in India, their parent company needs to license the brand trademark to the Indian company. The parent company and its subsidiaries enter a licensing agreement that has all the important clauses clearly mentioned.

Trademark licensing by a franchisor to franchisees:

It is the most famous form of licensing trademark. There are several restaurants, they all look the same. A famous food joint, restaurant, or salon license the right to use their brand to entities that are willing to use it. They license it to a third party. They have different models of licensing of franchising basis which they permit the third party to use their brand name. There are certain conditions in respect of that & there’s a royalty & franchise fee that’s payable to the franchisor.

Trademark licensing to facilitate a sponsorship:

A brand sponsoring an event permits the event organizers to use logos. Two brands can have a co-branding agreement. They permit each other to use their brands & they have a licensing agreement amongst each other.

Copyright

You generate income by copyright in two ways:

Copyright licensing by authors of a book via movie contracts & book publishing contracts:

There are authors who write a book & they enter into an agreement with a publisher to publish their books. They license the right to publish a book to a publishing house and keep its ownership with themselves.

Copyright licensing in a software:

One of the most common forms of copyright. Companies that develop software, generate income by giving users the right to download the software/app. In turn, users pay a certain royalty or a certain amount to the owner of the software in the form of a subscription or a fee depending on the arrangement between the parties.

Designs

Design companies design products that are aesthetic. They design it and license it to a manufacturer. The manufacturer takes it and designs it on their own. For every product they manufacture based on the design created by the designer, they give a certain revenue per piece to the designer.

Patents

Entrepreneurs file a patent for their exemplary ideas. They find manufacturers and permit them to manufacture the design. Manufacturers pay a royalty to the designer per piece.

Important Clauses in an IP Licensing Agreement

If you have to license your IP to a third party, here’s what you need to keep in mind:

Nature of IP

Identify the nature of IP if its software’s code, literary work, or trade’s name, etc. There could be different IPs for any tech startup. You need to give the right to use a software’s feature if it’s patentable. This makes the nature of IP is important.

Ownership of IP

The licensor should mention that they’re the owner of the IP they’re licensing to the licensee. It is important for the licensees to get the representation of it. This can lead to a legal battle if there’s no such representation from the owner’s end. The agreement should identify that ownership stays with the licensor to avoid any confusion.

Scope of license

The scope of the license can be exclusive & non-exclusive. The owner of the IP has the right to license it to one person or multiple people. The license’s scope should be non-exclusive if several customers have to use your IP. If you give exclusive rights to a customer, only that person has a right to use that IP even to your exclusion. This will exclude the owner from using it.

Term of the license

IP’s time period is an important clause to consider. You’ll need to mention the consequences for it after the term is over. On expiring of the term, the IP rights must go back to the owner.

Territory

The license’s territorial limits are important. This can range from specific states, countries, or worldwide. It is important for a franchising agreement. Franchisees need to understand the territory where they can use the products. The licensor must mention it.

Consideration (Royalty)

The licensee pays royalty in different ways. Here’s more about it:

• A single up-front payment
  Licensee gives a single upfront payment to the licensor. Licensor does not track the number of sales that happened.
• Periodic payment of pre-determined amount
  The franchisee pays royalty to the franchisor for net revenue made every month. It is a pre-determined percentage of the net revenue. You can find it commonly in copyright and design licensing.
• An amount periodically paid based on ancillary conditions
  This agreement allows you to use an IP royalty free and pay royalty if a big client signs up. It depends on basic negotiations between the party.

Permitted use of IP 

A license agreement must mention IP’s use and the restrictions if any. There may be restrictions on reverse engineering or creating something similar.

Indemnification

IP misuse or agreement breaching consequences needs to be clearly mentioned.

Advantages of IP Licensing

Below are the advantages of IP licensing you must know:

• Generates a passive income for the IP owner, without any significant overheads
• Creates new business opportunities for licensor & licensee
• Enables businesses to enter new markets or industries & expand their business
• Provides the potential for better marketing

The post A Complete Guide to IP Licensing and its Advantages appeared first on PayU Blog.

Today, this mark has taken up a much more formal meaning and identity in the form of a trademark. But a trademark denotes a lot more than just the ownership of a product or service. It signifies the brand’s unique identity and helps it stand out from the crowd.

What is a Trademark?

A trademark is a distinctive symbol or word(s) used to represent a business or its products. After a trademark is registered for a product or service, the same symbol or words cannot be used by any other entity as long as its owner uses it.

Through a trademark, customers can recognize a brand in a marketplace and differentiate it from its competitors.

While the word ‘trademark’ is essentially for goods, a ‘service mark’ is for services. However, ‘service mark’ is rarely used, and ‘trademark’ is used for both products and services.

Usually, trademarks are known as intellectual properties and may or may not be registered. A registered trademark provides better rights and protection as compared to an unregistered one. Nevertheless, it’s not always necessary to register your trademark.

How to Identify a Trademark?

Trademarks identify and protect words and design elements that distinguish the source, owner, or creator of a product or service. They can be product names, logos, or slogans.

A trademark prevents any other entity from using a company or individual’s products or services without permission. It also helps avoid any possibility of a situation where a name, symbol, or logo has a chance of confusion with an already existing one.

This means that a company cannot use a symbol or brand name if it looks or sounds similar or has a similar meaning to one that already exists, especially if they belong to the same industry.

For example, any mobile manufacturer can’t legally use a logo that looks like that of Apple and cannot use a name that sounds similar to Apple.

Here’s how you can identify trademarks:

• ™ – Through this symbol, usually put after a logo or a phrase, brands claim that respective symbol or words as their own. However, the symbol doesn’t necessarily mean that the trademark has been officially applied for.
• ® – Only those trademarks that are officially granted and registered by the Trademark office can use the ® symbol. The symbol denotes a ‘registered trademark’.
• ℠ – Companies that sell services and not products can use the service mark logo. However, commonly, service providers also use the ™ instead.

What Can a Trademark Do?

A trademark does the following things for its owner:

• Helps send a notice of claim to other businesses that consider using the same symbol or word as their trademark.
• Provides a legal presumption of ownership preventing anyone else to take it, even in the future.
• Provides the exclusive right to use the claimed trademark.
• Gives goods or services their identity and a traceable source.
• Offers legal protection to your brand.
• Safeguards your brand against fraud or counterfeit.
• Ensures trust of quality among customers.

How Can You Apply for a Trademark?

Any individual, company, or legally identified person can apply for a trademark or a separate trademark registration. Steps to register for a trademark:

Step 1: Trademark Search

A thorough search of trademarks will help you determine if there are other identical trademarks in the market. Often, a trademark search can also predict possible trademark litigation. You can check for all existing registered trademarks on the Trademark Registry India website. 

Step 2: Application Filing of a Trademark

After confirming that the brand name or logo selected by you does not already exist in the official Trademark Registry, you can register it by going on the Trademark Registry India website and filing for a trademark application.

Step 3: Inspection of Application

After filing the trademark application, an examiner will inspect it for any issues, which might take about 12-18 months. The examiner can accept the trademark in any of the 3 forms- absolute, conditional, or object. The trademark is then published in the Trademark Journal if your application gets accepted.

Step 4: Publication of the Trademark Application

If anyone wants to object to a particular trademark, they get a chance to oppose it. And, the authorities find out that there is no opposition after 3-4 months from the trademark’s publication, you can go ahead with the final registration. In case, there is an opposition, an official hearing takes place, and the Registrar makes the final call.

Step 5: Getting the Registration Certificate

After publication in the Trademark Journal, the application proceeds for trademark registration. Following this, you will get a registration certificate carrying the seal of the Trademark Office.

Step 6: Renewal of a Trademark

After every 10 years, one can renew the trademark forever. In other words, your logo or brand name gets the trademark for as long as you want.

What is the Cost of Registering a Trademark?

In India, the trademark cost is Rs. 9000 per application per class for a company, while the trademark cost for an individual is Rs. 4500 per application per class.

Is Trademark a Copyright?

People tend to confuse a trademark with copyright. But no, a trademark is not a copyright, and there’s a significant difference between the two.

While a trademark distinguishes your brand name, mark, or logo from others, copyright prevents others from using your creation without your permission. Copyright is applicable to artistic works like paintings, poems, artwork, literature, and songs.

Conclusion

Having a trademark is important to create and establish your product/service in this competitive world. But do you know what would be even better? If this entire process of registering for a trademark was completely hassle-free.

PayU does precisely this! It simplifies the trademark registration process and takes care of it all for you. Registering for a trademark has never been this simple!

So trademark and stand out, for the world merely accommodates the common ones but rewards those that stand out!

The post What Is A Trademark, And How Can You Apply For It? appeared first on PayU Blog.