“Startups are creating their own intellectual property all the time without realizing it“

The Grid: The main takeaway from our IP protection event for startups and investors at The Cribb today was that although startups cannot really afford the costs for comprehensive IP protection in the UAE, they do what they can. The main areas of focus today were non-disclosure agreements, trademarks and patents. Let’s look at initial practical measures that startups can take without it costing an arm and a leg.

Melissa Murray: Yes, startups are creating their own intellectual property all the time without realizing it. They are often strapped for time and money and since they don’t have the leverage of bigger companies to challenge IP infringements, this can leave them exposed. However, they can start by putting non-disclosure agreements (NDA’s) in place to ensure that the signing parties respect confidentiality and that they are taking some measures to ensure due diligence.

The Grid: The general feeling amongst today’s startups was that as an NDA is difficult to enforce, it is just a formality. There was agreement however that NDA’s can act as a filter and screen out ‘time wasters’ or ‘copycats’. If the signing parties are hesitant to sign or, conversely, if they are too eager to sign without reading the fine print, this can in itself raise alarm bells. In relation to enforceability, there were questions around the governing law and jurisdiction for disputes relating to the NDA’s, particularly when the signing party resides in a different country or jurisdiction from the startup. The key message was to ensure some thought and tailoring goes into the NDA rather than using a general form found on the internet.

Melissa Murray: NDA’s will always act as a deterrent and give pause to copycats. Better to put one in place than leave it to chance. Here is a recap of a few other points raised today in relation to NDA’s:

  • Tailor the dispute clause to add in an appropriate governing law and jurisdiction– think about the other side’s location and where your customers are. If breached, where you would realistically need to seek a remedy such as an injunction?
  • Digital signatures are acceptable in the UAE and most other jurisdictions so an NDA sent electronically with a digital signature will be deemed a valid binding contract.
  • As an added protection to an NDA, build confidentiality and non-compete clauses into employment agreements with your employees.

IP Protection for Startups and Investors Venture Cafe Talks with Bird & Bird at The Cribb, Dubai, March 6th, 2017.

The Grid: Ok so there are steps to enforce confidentiality. We also discussed trademarks during the event. The issue of cost was raised several times as it seems that the UAE is one of the most expensive countries in the world to register a trademark being as much as 16 times the UK for instance.

Melissa Murray: In the UAE, registering in just English does not protect the Arabic use of the trademarks.  It is therefore recommended to register trademarks in both English and Arabic if used in both and in the appropriate classes (i.e. classifications of goods and services). While it can be costly, it is best to start by registering one trademark in one class and adding registrations incrementally as your business grows and if possible within certain time limits. By staggering your registrations across countries within the GCC, with careful planning, you can manage your costs with the maximum protection. Where applicable, some registrations can obtain priority backdated to the date of the original filing as long as it is filed within 6 months of the first filing.

We have a lot of international clients. Trademark filing in other countries can be relatively inexpensive so some clients can easily file multiple logos, different colours, mixes of words and pictures or even file taglines of their business to protect against infringements. When they engage us in the UAE, we take a strategic approach taking care to customize specifications within classes to mitigate against potential oppositions at the publication stage and hopefully save clients money.

The Grid: So trademark registration is costly but can be done incrementally. Now, I know the answer will probably be ‘no’ but can copyright somewhat help you protect parts of your IP as a substitute for trademark registration?

Melissa Murray: Well, it’s certainly not a substitute but it is useful. Here are ways you can use copyright to protect IP you have created:

  • Put ‘copyright’ at the bottom of any materials you create;
  • When pitching for a project, should the RFP wording include something like, ‘any IP shared in this RFP will be deemed our property’, you can reply by adding that you are creating IP and would be willing to transfer it for a fee. Sometimes its possible to tailor IP clauses so that you keep the ‘background IP’ (i.e. your existing IP in plans, drawings, concepts) and any “foreground IP” (being IP developed specifically for the project which builds on your background IP). Naturally, you will have to do a risk assessment at the time as to whether you can negotiate such clauses.
  • Separately, when you are engaging a third party provider to develop something for you, let’s say coding for a website, for instance, you should get a ‘transfer of IP’ in writing from the developer as they can be deemed the owner of the IP unless this is made clear.

The Grid: If we move on to patents now, we know that very few are filed in the UAE due to cost and lengthy process. Could you provide a few tips for startups who may be thinking of filing?

Melissa Murray: There are a lot challenges that need to be overcome in the UAE regarding the registering of patents. The government is working on upgrading the system in preparation for Dubai Expo 2020 and to better foster innovation in the UAE, so things may well change soon. Given the costs involved, it is rare for a startup to register a patent in the UAE. Most have customers abroad and it may be more cost-effective to file a patent in markets where your biggest customer base sits.

The Grid: There was a question about whether you should file a patent given that it publicizes what you are doing to the whole world. Are you unduly exposing your IP?

Melissa Murray: True, you may decide to keep your trade secrets just that; a secret.

This is an extract from an interview with Melissa Murray, Partner, Bird & Bird.

Bird & Bird is an international law firm, with a rare and invaluable grasp of strategic commercial issues, combining exceptional legal expertise with deep industry knowledge and refreshingly creative thinking, to help clients achieve their commercial goals.

 

Interview by May Khizam, Founder & Chief Strategist, The Grid Media Ltd

This article is provided as general information to readers of The Grid Media Ltd. It does not constitute, and should not be construed as, advice on any specific matter or advice on which you should rely, nor does it create any contractual, tortuous or fiduciary relationship. You should not act or refrain from acting on the basis of this information.

Belief Statement: The Grid believes in the transfer of information that can be converted to knowledge and used instrumentally in business in the form of modified or new practices.

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