World Intellectual Property Organization

Recognition of the Importance of Intellectual property by a Start-up Business Manager - Enterprise S

COMPANY DETAILS

Location: Luxembourg
Business sector: Software and Internet
Activities: Software management systems and web solutions
Number of employees: 7 persons
Annual turnover: 40.000 € (2002), 150.000€ (forecast for 2003)

Enterprise S. is a young start-up company from Luxembourg. Its activities are focused on the software and the Internet business. It develops, implements and distributes software management systems in the field of accounting, logistics, process tracking, communication, human resources and CRM. Enterprise S. also offers web solutions including application provider, web hosting, web and application development services.

The owner of Enterprises S. learnt about intellectual property issues by attending seminars and conferences for future company managers. There he became aware of the value of his intangible assets and of the importance of protecting them. So he began to seek information about how to best protect them, by consulting IP experts.

As some IP protection tools require financial resources that a start-up company may not necessarily have, the company owner finally adopted a 2-level strategy, which consists of using as much as possible of the free-of-charge protection tools such as copyright and secrecy and of making a cost benefit analysis in respect to his finance regarding trademark and patent protection. "Why not make use of the free-of-charge intellectual property rights as they give you a legal tool to defend your rights in case of infringement by third parties", is one of his principles.

So the company owner protects his know-how by concluding non-disclosure agreements with future employees, clients and partners before any information is exchanged. He also ensures that all the company's documents have a confidential notice. Furthermore a copyright notice is placed on all the documents, software and web pages produced by the company. Finally the registration of his products' trademarks remains on his list of next things to do.

Being aware of intellectual property issues for his business, the Enterprise S. owner also takes care to integrate intellectual property in the business plans. He admits that the time it took him to include IP considerations in his business plans is not wasted as it helps him in his business activities today.

Regarding intellectual property protection, the company manager has adopted a defensive strategy, because he does not think that his competitors are going to copy the company's products. Nevertheless he wants to be able to assert his rights in case a competitor copies him.

Regarding Intellectual property protection, the company manager has adopted a defensive strategy, because he does not think that his competitors are going to copy the company's products. Nevertheless he wants to be able to assert his rights in case a competitor copies him.

He also made use of IP as an information source by asking the Luxembourg Technology Watch Centre for searches on trade marks and patents. But he does not regularly use IP information to monitor his technological and competitive environment.

Intellectual property issues are managed by him alone. IP questions are dealt with as problems arise by seeking help from IP experts.

Planning to diversify his business activities, the company owner plans to develop a new innovative service based on a patented system. An exclusive license agreement has been signed between the company and the patent holders. During the negotiation of the contract it was agreed to extend patent protection to more territories, but they missed the deadline of 1 year, which is given to the patent holder to seek protection in other countries without failing the novelty criteria (the priority date). As a matter of fact the company now faces the problem that they can be freely copied and competed in some of their relevant markets.

The company owner considers intellectual property protection as a very important issue for small high-tech firms as if attracts investors and protects one's intangible assets from competitors.

Case study compiled by the LIIP Project.

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