A startup's patent is a competitive advantage.

Intellectual Property: The Key to Startup Competitiveness

With recent improvements in the startup environment, the barriers to entry for startups have lowered, but the chances of success remain low. Moreover, the startup industry is currently experiencing a "winter," marked by economic uncertainty and reduced investments, leading to challenges for many startups. The competitive landscape is also becoming increasingly fierce. In such a scenario, securing strong competitiveness is crucial for startups to survive and grow in the market.

One of the most critical factors for startups to gain an edge over large corporations is intellectual property (IP), particularly patents. Patents serve as a powerful tool to protect a startup’s innovative ideas and technologies, preventing large companies or competitors from copying or infringing on them. When investors show interest in a startup, one of the first things they examine is its intellectual property. Patents not only protect technology but also play a vital role in attracting investment, shaping market entry strategies, and ensuring long-term business growth.

Patents: A Powerful Weapon for Startup Competitiveness

Startups often find themselves at a disadvantage compared to large corporations in terms of capital, marketing, and networks. However, one of the most accessible and powerful tools for startups to secure competitiveness is patents. Through intellectual property rights, such as patents, designs, and trademarks, startups can establish a competitive edge and significantly increase their chances of survival in the market. These intellectual property rights act as crucial assets that drive startup success, going beyond mere protection.

Especially for tech-based startups, patents are an essential element that helps differentiate them from competitors from the early stages. By filing and securing patents, startups can protect their technological superiority, which, in turn, becomes an attractive factor for investors. Investors are more likely to believe in the long-term growth potential of a startup when they see that its innovative technology is protected by patents.

The Importance of Patents for Startups

Some may think that the importance of patents is diminishing because many startups today rely more on ideas than on technology, and large corporations already hold strong market positions. There is also a viewpoint that intellectual property may have little impact on companies like Google or Facebook, which have built formidable defenses based on their monopolistic ecosystems.

However, it is important not to overlook the fact that even these large corporations amass extensive intellectual property portfolios and build patent barriers. In business environments where products and services can be easily replicated, patents become even more critical for startups. According to a 2019 study by the Korea Institute of Intellectual Property, startups with patents are 35 times more likely to grow than those without, with a five-year employment growth rate four times higher and a revenue growth rate three times higher. This highlights the significant role that patents play in the sustainable growth of startups.

Intellectual Property Strategy for Startups

For startups to successfully secure competitiveness, an intellectual property strategy is essential. First, patent documents, as disclosed technology and business documents, are invaluable resources for understanding competitors’ technological developments and business models. Startups can conduct prior art searches to identify the technological advancements of competitors and strategically allocate their resources accordingly.

Additionally, since startups often have limited resources, they should focus on protecting their core technologies and ideas. Initially, securing strong core patents and gradually expanding intellectual property rights as the business grows is important. This strategy maximizes the use of a startup's initial resources while securing technological superiority and enhancing cost efficiency.

Particularly, it is advisable to file for trademarks before launching products or services to prevent legal issues in advance. Trademarks play a crucial role in how consumers perceive a product or service, so securing trademark rights is essential for enhancing the brand value of a startup. Through trademark rights, startups can protect their brand and secure a competitive advantage in the market.

Key Government Support Programs for Startups

Patent filing and management can be costly, posing a financial burden for startups. To address this, various government and local government support programs are available to help startups secure intellectual property rights.

1. IP Narae Program (Regional Intellectual Property Centers):
   The IP Narae Program targets startups within seven years of establishment, supporting them in developing intellectual property strategies necessary for growth. The program is available annually from March, depending on the region, and provides up to 25 million KRW per company. Selected companies receive three months of consulting from professional patent attorneys, including services such as prior art searches, R&D element identification, patent filing and registration, infringement checks, and strategies for responding to patent infringement.
2. IP Direct Support Service (Regional Intellectual Property Centers):
   The IP Direct Support Service is a scaled-down version of the IP Narae Program, with the consulting period and scope reduced by half. However, companies that have already received support from the IP Narae Program or do not qualify can receive up to 20 million KRW through this program, including support for filing one patent if needed.
3. Global IP Star Company (Invention Promotion Association):
   This program supports startups preparing for or engaged in overseas exports. Selected companies bear 30% of IP service costs over three years and receive support for services such as patent mapping, design mapping, international patent filings, and brand consulting.
4. Export Voucher Program (KOTRA):
   The Export Voucher Program supports startups preparing for international exports, providing between 30 million and 120 million KRW, with 30% of the cost borne by the company. The program offers various export-related services, including international patent filings.

Conclusion

Startup patents are essential not only for protecting technology but also for strengthening competitiveness and enhancing long-term growth potential. Securing intellectual property rights from the early stages and strategically utilizing them is crucial for gaining a competitive edge in the market. Startups should actively leverage government and local government support programs to develop and implement intellectual property strategies, including patents. With strong patents, startups can survive and achieve successful growth even in challenging market conditions.