Over the last two decades, the mobile technology industry has witnessed unprecedented growth and the quest for innovation has never been more fiercely contested. The industry’s fast-paced and competitive nature is forcing more early stage innovative entrepreneurs, who often lack deep pockets, to seek creative, cost-effective means to prevent others from infringing on their innovation. Without these means, start-ups’ valuable ideas and intellectual property (IP) might be at risk.
Inspired by this, the Ecosystem Accelerator team ran a clinic for the programme’s current portfolio start-ups, dubbed ‘Protecting Mobile Innovation – Intellectual Property for Mobile Solutions’. The 75-minute session was led by Michael Loch (Head of Intellectual Property at GSMA) and David Frolio (Legal Counsel at GSMA Mobile for Development). The session was attended by 13 of our portfolio start-ups (20 start-up team members) across 10 Asia Pacific and Africa countries. While the allocated time slot was not enough to fully cover a topic of this magnitude, David and Michael provided valuable insights on how start-ups can protect their mobile innovation. As with our previous three clinics (Pitching to MNOs, Crafting compelling start-up pitch decks for MNOs, Mobile user experience for start-ups), we thought we would share some insights from the session with you.
1. Take stock and identify the intellectual property in your business
It was recommended that our portfolio start-ups review and identify their intellectual property (trade secrets, copyrights, trademarks etc). Founders had to ask themselves if the identified intellectual property is worth protecting. If affordability of protection is a challenge, start-ups could explore shared ownership with an established partner who is in a better financial position to protect and enforce the specified intellectual property. This option, however, comes at a higher cost for the start-up.
2. The best way to protect your intellectual property: Be mindful of what you disclose
While stressing the importance of having the appropriate IP strategy, a key point raised was that the best way to keep any piece of information confidential is to either share it in limited form or not disclose it in the first place. While agreements and contracts are vital, they are limited as the legal process is not infallible. If ideas must be disclosed, proper confidentiality and/or non-disclosure agreements (NDAs) ought to be put in place.
3. A non-disclosure agreement (NDA) mitigates the risk of exposing a start-up’s innovation
Discussions with other parties can put the start-up’s valuable ideas at risk. It was stated that an NDA, when drafted properly, can help mitigate this risk. Without this legal document, start-ups risk others profiting from their ideas or information without permission. An NDA essentially sets out how to share information or ideas in confidence. A one-way NDA is used when only one of the parties involved in a potential partnership is disclosing information while a mutual NDA is used when both parties are. A standard NDA should typically include the definition of what information requires confidentiality, the purpose of the NDA, the obligations of those signing the agreement, the length of time the NDA will be in force, among other details.
4. Start-up founders should make sure employees and consultants sign agreements which include an intellectual property clause
Aside from the NDA, it was suggested that start-up founders should make sure their employees sign an agreement with an IP clause, detailing that the start-up’s proprietary information will be kept confidential. Such agreements would also provide that any IP created or invented by the employee within the specified job description will be owned by the company. An employee invention agreement is an example. This contract should be signed at the beginning of the relationship with employees.
Similarly, temporary contractors or consultants should also have an IP clause drafted into their contracts which clearly states that the start-up or business will acquire ownership of contractors or consultants work for the start-up. In the case where the third party owns the technology, start-ups were advised to make sure there are licencing agreements in place.
Please, note that the contents of this blog are for general information only and provided “as is”, without any express or implied warranties of any kind. Nothing on this site is deemed as constituting legal advice. Specialist legal advice should be sought in accordance with individual circumstances.
We would like to thank Michael Loch and David Frolio for sharing their expertise, experience and knowledge with our portfolio start-ups. We would also like to thank the teams our portfolio start-ups for making the session an interactive one.
The GSMA Ecosystem Accelerator Innovation Fund provides selected start-ups in Asia Pacific and Africa with equity-free funding, technical assistance, and the opportunity to partner with mobile operators in their markets to help scale their products and services into sustainable businesses with positive socio-economic impact.