11 ASIAN LEGAL BUSINESS – INDIA E-MAGAZINE WWW.LEGALBUSINESSONLINE.COM Q. India has seen a spurt in tech startups and unicorns in the last few years. Are these new-age companies taking intellectual property and patents seriously? Would not doing so impact their whole business model going ahead? NS - I am delighted to see how the startup ecosystem is shaping up in India. I am equally delighted to see that how the government hand-holding is helping the startups foster faster and better. When I touch-base with any startup with their requests of being counselled on intellectual property issues, what I feel is that all of them could have taken a better first-hand knowledge on managing as well as protecting their innovations and creativity. These new-age companies are taking IP seriously but most of them are either late or short on legal budgets. I have a tough time making them understand that IP would impact their business model much more than their marketing priorities and that they should really prioritize IP over everything else as that is the heart of any startup. KM - India’s startup ecosystem is thriving, bolstered by favourable government policies and tax incentives. However, many startups continue to undervalue the critical importance of intellectual property (IP) management. From my observations, startups often postpone IP registrations due to budget constraints or overly prioritise marketing. I consistently advise my clients that neglecting IP can have severe financial and reputational repercussions. Ensuring robust IP protection from the outset is vital for sustainable success and should be a foundational aspect of any startup’s strategy. Q. Do you think a patent or a trademark registered in India can be defended globally in case of a cross-border intellectual property dispute? What are legal strategies required to manage this? NS - That would be yes and no. There have been orders where the transborder reputation has worked in favor of the litigant where the rights have been defended well in case of cross border trademark dispute. The legal strategy that comes to my mind would be advising the client to be mindful about their user dates, choosing the goods/services well and definitely documenting the use of the product well enough to produce enough evidence in case of cross border litigation and justifying the right in a proper manner, from adoption till use. The most crucial aspect in all of this would be that at least making an application outside India where a client is doing or committed to do business. KM - Global defense of a patent or trademark significantly hinges on the brand’s international recognition. For brands with substantial global presence, leveraging a trans-border reputation can be advantageous. It is critical for companies to strategically allocate funds towards securing their IP not only domestically but also in key international markets. This proactive approach is crucial for protecting intellectual assets globally and requires diligent planning and execution. Q. Do you think holding patents, intellectual property or any other trademark outside India by an Indian company can create a tax or other regulatory issue? How can companies safeguard against these? NS - I am very certain that when an Indian entity makes an international IP portfolio, irrespective of all the countries it is holding the IP in, if the applicant is question is the Indian company then all of the valuation of the entire portfolio will stream back to the Indian company. The company has to make sure that strategically how does it want to define its structure vis-à-vis its applications internationally. Usually, we suggest that the IP Portfolio being directed to one company only with it being able to give licenses of use to various other entities in each country to avoid any sort of tax duplications and other regulatory issues. KP - Managing IP internationally can indeed lead to intricate tax and regulatory challenges. Companies must strategically plan their IP holdings based on their unique business models. For some, assigning trademark/patent or such other IP rights ownership to distributors in low-tax jurisdictions may be sbeneficial. Alternatively, licensing IP from the parent company in India may be more tax-efficient for other business models. Establishing clear ownership or licensing agreements is essential to minimise potential tax liabilities and regulatory complications. Q. How does one protect and safeguard the intellectual property in the Metaverse? How can a company or an individual create a robust intellectual property strategy to tackle this NS - I would suggest making a list of your digital assets and a baseline value of such assets. In case of blockchain based toke, it can be a digital file that encodes the product. You have to follow the basic rule of Create, Protect and Prosper even in the metaverse. Also, documenting your data as well as your proprietary information well is another aspect that should always be on a priority. One also needs to keep in mind that metaverse is a huge ocean and tackling your IP in it always depends on case-to-case basis. KP - Navigating IP protection in the Metaverse requires several strategic approaches. Firstly, ensuring that IP rights are formally registered provides a foundational layer of legal protection. Secondly, monetising through licensing can generate revenue while safeguarding usage rights. Thirdly, drafting comprehensive service agreements for Metaverse interactions is vital for enforcing IP rights. Lastly, employing automated monitoring tools to detect and address infringements is crucial in this digitally evolving landscape.
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