Protecting Intellectual Property for Australian Startups

For most Australian startups, intellectual property is the core of the business. Whether it is a software platform, a brand, a product design or proprietary know-how, the value of the enterprise often depends on IP that can be protected, licensed and enforced. Yet IP protection is frequently overlooked in the early stages of a business, leading to costly disputes or lost opportunities down the track. At Astris Law, we work with startups and growth-stage businesses to build IP protection strategies from the ground up.

Types of Intellectual Property Relevant to Startups

Trademarks

A trademark protects a sign used to distinguish goods or services - including words, logos, slogans, sounds and shapes. Registration under the Trade Marks Act 1995 (Cth) provides exclusive rights to use the mark in Australia for the registered classes of goods and services. Registration lasts 10 years and is renewable indefinitely.

For startups, trademark registration should be among the first steps. An unregistered brand can be used by competitors, and rebranding after traction has been gained is expensive and disruptive. Before committing to a name, startups should search the IP Australia Trade Marks Database and consider seeking professional clearance advice.

Patents

Patents protect inventions - new products, processes or methods that are novel, involve an inventive step and are useful. Under the Patents Act 1990 (Cth), a standard patent lasts 20 years (or 25 years for pharmaceutical patents). An innovation patent (for incremental advances) was available until 2021 and existing innovation patents remain in force until expiry.

Startups with genuinely novel technology should consider patent protection early. Public disclosure of an invention before filing can destroy novelty and prevent patent registration. Provisional patent applications can secure a priority date while the business develops the technology further.

Copyright

Copyright protects original literary, artistic, musical and dramatic works, as well as films, sound recordings and broadcasts. Under the Copyright Act 1968 (Cth), copyright arises automatically upon creation - no registration is required in Australia. For startups, copyright is relevant to software code, website content, marketing materials, product documentation and databases.

The critical issue for startups is ownership. If code or content is created by contractors or freelancers, copyright generally belongs to the creator unless there is a written assignment. Startups must ensure that development agreements include clear IP assignment clauses.

Trade Secrets and Confidential Information

Not all valuable IP can or should be registered. Customer lists, pricing models, algorithms, business processes and manufacturing know-how may be better protected as trade secrets through confidentiality agreements (NDAs), employment contracts with confidentiality clauses and access controls.

Common IP Mistakes Startups Make

• Not securing IP assignments from founders and contractors: If a co-founder develops technology before incorporation, the IP may belong to them personally unless formally assigned to the company
• Disclosing inventions before filing: Public presentations, pitch decks and social media posts can destroy patent novelty
• Using generic or descriptive brand names: Trade marks that are too descriptive of the goods or services may be refused registration
• Ignoring IP in employment contracts: Without proper clauses, employees may retain rights to IP created during employment in some circumstances
• Failing to conduct freedom-to-operate searches: Launching a product without checking existing patents and trademarks risks infringement claims

A Cautionary Tale

There's no shortage of cases on IP battles fought and won in Australia. As riveting as they can be (to a lawyer), sometimes a good ol' movie really helps to understand the lived experience of being in the throes of these battles.

If you need a reminder of what's at stake, Netflix's The Billion Dollar Code tells the true story of two German developers who created the algorithm that powered Google Earth and then spent years in court trying to prove it. It's a dramatised account, but the underlying lesson is real: if you don't lock down your IP from the start, someone else might build an empire on it.

The Billion Dollar Code | Official Trailer | Netflix. Credit: Netflix.

IP Assignment and Ownership Structures

For startups seeking investment, clean IP ownership is a due diligence requirement. Investors and acquirers will want to confirm that the company owns all IP it relies on. This requires:

• Written IP assignment deeds from all founders, transferring any pre-incorporation IP to the company
• Employment contracts with clear IP ownership clauses
• Contractor agreements with IP assignment or exclusive licence provisions
• Technology development agreements that specify ownership of deliverables and background IP

Enforcing IP Rights

Protecting IP is only effective if it can be enforced. In Australia, enforcement options include:

• Cease and desist letters: Often the first step, demanding that the infringing party stop the conduct
• Federal Court proceedings: For trademark, patent and copyright infringement. Available remedies include injunctions, damages or an account of profits and delivery up or destruction of infringing goods
• Trade mark opposition: If a competitor applies to register a conflicting mark, the owner can oppose the application before IP Australia
• Border seizure: Australian customs can seize infringing goods at the border under a Notice of Objection

Conclusion

IP is often the most valuable thing a startup creates, and early missteps can be irreversible. Trademark registration, proper IP assignments, patent filing before disclosure and robust confidentiality agreements should all be in place before a startup goes to market or seeks investment. Astris Law's IP and technology practice advises startups on structuring their IP portfolio, securing ownership and enforcing their rights across all forms of intellectual property.

This article is for general information purposes only and does not constitute legal advice. You should seek professional advice tailored to your specific circumstances before acting on any information in this article. Liability limited by a scheme approved under Professional Standards Legislation.