Author: Himani Tomar
College: Madhav Vidhi Mahavidhyalaya , Gwalior
Abstract
Ask most founders what their startup needs help with, and you’ll rarely hear intellectual property from the list. Fundraising, hiring, product, these dominate the conversation, with IP quietly relegated to something to “sort out eventually.” The reality is that the law around IP rights rarely cares to bend for the convenience of a founder. Rights are lost in an instant at the wrong action – a public demo, an unfilled application, an undocumented handshake – and cannot be reclaimed through better lawyering later. This article explores six common pitfalls Indian startups fall into: waiting to register the trademark, disclosing an invention before filing a patent, not doing a clearance search, not documenting IP ownership with co-founders and contractors, confusing different forms of protection and not ensuring NDAs in early conversations. The article uses two landmark Indian judgments on patent novelty and confidential business information as examples.
To the Point
Founders tend to think about IP the same way they think about dental checkups – something to get around to when there’s clearly a problem. It’s understandable behavior – but legally, it’s a disaster. A patent application has to be filed before an invention becomes public, not after it gains attention. A trademark goes to whoever has first application, not whoever has stronger claims to the name, and no documentation of IP ownership means its default position is the creator’s, not the company paying for it.
These rules aren’t obscure, and the difficulty to implement them while a startup is still small, unproven, and on the move is what leads to all the disputes below.
Use of Legal Jargon
The six pitfalls and their legal implications are as follows:
1. Only filing a trademark once a brand gains some recognition.
The intuition is intuitive – if nobody has heard of a product, there’s no need to register a name for it. But the Indian trademark law has a very different approach: rights are awarded to the first applicant, regardless of who has stronger claims to the name and recognition. A founder waiting to register a trademark until their brand has wider recognition is creating a situation where a competitor, or a professional trademark squatter, can file for the same name and take legal control of it – with no easy remedy for the original creator apart from a bitter and expensive legal fight, or rebranding their product with customers now familiar with the name. Filing under the correct class of goods and services matters just as much – a registration in the wrong class can appear solid on paper, but offer no actual protection in a dispute.
2. Showing the product publicly before a patent application is filed.
This is arguably the most disastrous of the six mistakes, because it renders the invention ineligible for patent altogether. A demo at a conference, a walkthrough posted on the web, an offhand explanation of a novel process to a journalist, all can constitute public disclosure, which can kill any patent application.
3. Not running any sort of clearance search before adopting a name or filing an application.
Founders fall in love with a product, and then move right to using the name and concepts – on packaging, on a website, in outreach to customers – without first checking whether someone else already has a trademark registered for something similar. A clearance search, even something as simple as a Google search, would flag up potential problems before it’s too late. Skipping this step not only leaves the trademark registration vulnerable during the process, but exposes the growing brand to a possible infringement claim from someone else who was first, forcing a more expensive rebrand after the cost of the name has already been invested in products, contracts and marketing materials.
4. Leaving co-founder, contractor, and employee IP ownership undocumented.
Startups are usually built on relationships of trust – friends, former classmates, early hires who joined on a handshake. But Indian law does not consider trust as a substitute for a signed agreement. Without a document that explicitly assigns IP created during the engagement to the company, the default position can favor the individual who actually did the creating.
5. Treating copyright, trademark, and trade secret protection as interchangeable.
Each of the three protects a different sort of asset, using a different set of rules, and one is not a substitute for the others. Trademark registration is necessary – and sufficient – for a name or logo to be protected. Copyright automatically protects any written or creative work from the moment it is created, but it is far easier to enforce if it is formally registered. Internal processes, methods, and data on the other hand can be protected as trade secrets, but only as long as it remains genuinely confidential, as there is no registration to fall back on once information is no longer confidential.
6. Discussing confidential information without an NDA in place.
Long before any formal deal exists, founders are already talking to each other – to investors, to manufacturers, to prospective co-founders and collaborators. Skipping an NDA in these conversations because it seems awkward, or as a sign of distrust, leaves very little legal recourse if that information is later leaked, copied, or used without permission.
The Proof
Each case discussed here reached a courtroom only because protection wasn’t secured before it was needed. The patent in Bishwanath Prasad was invalidated because its novelty had already been destroyed by the time the application was filed – and no amount of litigation could reverse that afterwards. The dispute in Diljeet Titus consumed years of legal proceedings that a straightforward confidentiality and IP-assignment agreement signed at the start of the working relationship would have prevented entirely. The pattern is the same – by the time a startup, invention, or working relationship has proven its value, the window to protect it cheaply and cleanly has already passed.
Case Laws
1. Bishwanath Prasad Radhey Shyam v. Hindustan Metal Industries, (1979) 2 SCC 511
The Supreme Court settled the question of patent novelty decades ago. The dispute involved a device for holding utensils during manufacturing, and the Court held that if the claimed invention had already been publicly known, used, or discussed – whether through word of mouth or published material – before the date the patent application was filed, its novelty was legally negated. The Court further found that the invention in question was little more than an obvious workshop-level improvement, rather than a genuine inventive leap. This case remains the standard reference point in Indian patent law for this scenario, demonstrating why any invention with real commercial potential should, at minimum, have a provisional application filed before it is demonstrated to anyone outside a carefully controlled and confidential group.
2. Diljeet Titus, Advocate v. Alfred A. Adebare & Ors., 130 (2006) DLT 330
The Delhi High Court’s judgment shows the messy mess undocumented relationships can get into, even when some residual rights do exist. Associates at a law firm left to start their own practice, taking with them client records, due diligence documents, and databases built during their time there, without a written confidentiality agreement. The Court held that the departing associates were entitled to use the general skills and knowledge they had genuinely absorbed, but could not use specific copied material and records that were confidential and created during their employment. The judgment is right at the intersection of trade secrets and copyright: the client lists and internal records functioned as confidential trade secret material, but could also attract copyright protection. While narrow protection was extended based on specific facts, the case shows that such judicial protection is fact-dependent, and no substitute for a formal agreement.
Conclusion
None of the six mistakes require significant legal spending to avoid – they require founders to treat IP protection as a day one task rather than a someday task. File the trademark, and run the clearance search, before the brand has anything to lose. File at least a provisional patent before any public demonstration, since Bishwanath Prasad makes it clear that novelty, once destroyed, cannot be recovered. Put IP assignment and confidentiality terms in writing with every co-founder, contractor, and early employee, rather than relying on a court to unravel the facts as Diljeet Titus was forced to. Understand which protection – copyright, trademark, or trade secret – applies to which asset, and sign the NDA before the sensitive conversation, not after the information has already left the room. The earliest IP protection is almost always the cheapest, as it is the only kind that hasn’t been overtaken by the very success it exists to protect.
FAQs
Q1. Why is it risky to wait until a brand has some recognition before filing a trademark?
Because India generally allocates trademark rights to whoever filed first, and waiting gives competitors or trademark squatters a window to file ahead.
Q2. Can showing a product publicly destroy patent rights for good?
Yes. As per the Supreme Court in Bishwanath Prasad Radhey Shyam v. Hindustan Metal Industries, public use or disclosure of an invention before the patent filing date negates its novelty, and the invention cannot be patented afterwards.
Q3. If there’s no written agreement, does a company automatically lose all IP created by a contractor or co-founder?
Not automatically – courts can still restrain the use of specific confidential material as seen in Diljeet Titus v. Alfred A. Adebare. But such protection is narrow and fact-dependent, and is no substitute for a clear written agreement made at the outset.
Q4. Is verbal trust between co-founders enough to protect IP ownership?
No. Disputes without written agreements still end up in court, and the outcome turns on fine factual distinctions rather than clear legal entitlement. A signed agreement avoids that uncertainty.
Reference
Bishwanath Prasad Radhey Shyam v. Hindustan Metal Industries, (1979) 2 SCC 511 (Supreme Court of India).
Diljeet Titus, Advocate v. Alfred A. Adebare & Ors., 130 (2006) DLT 330 (Delhi High Court).
