What Startups Should Do To Protect Their Big Mobile Application Idea? The Importance of Intellectual Property Rights In An Extremely Competitive Market

In today's knowledge economy, intellectual property (hereafter "IP") rights are very important and powerful.  Unfortunately for (young) entrepreneur's, it's not always the first thing that will cross your mind when you start a business. Indeed, you get excited by your project, you have a multitude of activities and issues that you have to deal with, you start to spread your idea everywhere, etc. However, if you want to protect your smartphone application (hereafter “app”) and generate profits, you should really read this article!

In this article, two questions will be analyzed. In terms of IP rights protection:

(1)   What should a startup do when starting a business? For instance, should you patent your smartphone application [5]? Do you need a trademark? A short summary of  Apple trademark applications icon 'strategy' will also be explained.  

(2)   What can a startup do to protect a business idea when a tech giant (such as Apple, Google, Microsoft, etc.) is 'stealing' it? In 2013, Apple held its annually Worldwide Developers Conference (WWDC) conference in San Francisco. Just after the Conference, TechCrunch [1]  published an interesting article[2]: 'iOS 7 [a mobile operating system designed by Apple]  Steals Mailboxs Gestures, Sunrises Layout, BB10's Back Button, WebOS's Multitasking'; explaining that 'many features and UI choices were greatly inspired by innovative third-party apps or even competitive mobile operating systems'. One may ask: What could have done a startup, such as Sunrise Calendar App, to avoid this scenario?

1.     In terms of IP rights protection, what should a startup do when starting a business?

Firstly, you should clearly defining who owns the project/idea and to talk to anybody who contributes to your idea about the value of their contribution. Indeed, once the company starts to make profit (monetizing its investment) and developing a clear business vision, it is sometimes too late to discuss the partnership (if any). A sub-question might be: Who owns the IP? For instance, as an employee, it is important to know that any IP you create becomes an asset of the company (unless the contract says otherwise).

Secondly, you should register the name of your company as a trademark to start protecting your reputation. Trade marks are distinctive signs identifying and distinguishing the commercial source of goods or services. Such signs can consist of words, logos, names and colors, as well as any other means of identifying commercial origin such as the shape of the products (e.g. Coca-Cola bottle) and their packaging. It is easier to prevent competitors from copying or damaging your trademarks if they are registered. You should also know that a strong word mark is sometimes better than registering a logo with a specific shape. But of course, If you can do both, it's even better.

Depending on which part of the globe you want to protect your trademark and make business, different institutions are responsible for the registration of your brand. The main requirement for the registration of a trademark in the European Union is that your name should be non-descriptive of the product of service concerned, and dissimilar to other names your competitors use. In Europe, you can register your trademark with the World Intellectual Property Organization - WIPO (International Registration) or the Office of Harmonization for the Internal Market - OHIM (European Registration in 28 countries). But if you want to protect it on a smaller scale, your national IP Office[6] is probably the best and cheapest option. In the U.S, the United States Patent and Trademark Office (USPTO) website[7] will guide you in the application process.

Trademark tip: if your app starts to become really popular, always use it as an adjective and not as a noun (otherwise the mark becomes a generic name of the product). To avoid genericide of your mark, you can, for instance, use “app” in association with the mark.

Thirdly, If you are starting up your business, it is likely that your finances are tight. Therefore, don't try to lose money and time registering your brand name all over the world. It's important to manage your geographical area of protection: if you remain in your home country, protection costs will be considerably lower than those of international protection. This is relevant for patents and trademarks.  

Fourthly, you can also register your domain name i.e. the actual address identifying the site (e.g. http://www.d-is-freshinteresting.blogspot.com/) that correlates to one or more Internet protocol (IP) addresses (which are strings of #'s, i.e. '128.165.132.9').

You should be aware that registering your domain name is not a substitute of registering your trademark. The Internet Corporation for assigned Names and Numbers (ICANN) is responsible for the allocation of all top level domain names (such as .com, .org and .net). If a dispute arises, then WIPO is responsible.

Fifthly, what about patents and smartphone apps? 

• Introduction

Let’s start with the basics. A mobile application (mobile app or phone app[8]) is a software program [9] for a computer or phone operating system (such as iOS 7). These apps are designed to run on smartphones (iPhone, Samsung Galaxy, etc.), tablets (Ipad, Microsoft Surface, etc.) computers and other mobile devices. They are usually accessible through application distribution platforms, such as the Apple App Store, Google Play, Windows Phone Store, and BlackBerry App World, which are typically operated by the owner of the mobile operating system[10], e.g. Android for Google, BlackBerry 10 from BlackBerry, iOS from Apple, Nokia Asha platform from Nokia, Windows Phone from Microsoft, etc.

The question is not really whether you can patent your smartphone app (of course you can!), but more whether you should. Years after years, the Apple iTunes App Store and Google Play are getting extremely competitive marketplaces. At the Apple WWDC 2013, Tim Cook announced that iOS users now have a staggering 900,000 choices for apps and games to put on their smartphones and tablets, and 375,000 apps that have been built 'just' for the ipad[11]. That's an extremely huge amount of apps! With the consequence that the competition has never been so intense.

Being the first to launch a smartphone app also draws a risk of being copied (reverse engineered), especially if the software becomes popular. After the WWDC, some people noticed that many features and user interfaces (UI)[12] choices were greatly inspired by innovative third-party apps or even competitive mobile operating systems.

For instance, Apple new mobile operating system (iOS 7) has a calendar App extremely inspired by SUNRISE Calendar[13] (in case you don't already know this app, here is the logo), especially when you get a scrollable month view.

The only difference is in the week view that doesn’t exist in SUNRISE. While it’s 'normal' for Apple to copy other operating systems’ features (even though we always expect something revolutionary from such a company), ‘stealing from independent third-party developers is harder to swallow. Those small teams have created some of the best UI innovations on mobile and are not rewarded by iOS’s new major iteration’ concluded the TechCrunch article[14].

• So what should a web or app developer (like SUNRISE) be doing before launching a new product, in order to protect its (Calendar App) idea?

In the U.S, as long as the requirements for patentability are met, there are no legal obstacles to the patentability of computer programs. In Europe, based on the Article 52(1) of the European Patent Convention (EPC), the situation is a bit different. Some exclusions exist but they are narrowly interpreted. In general, it is possible to patent your great app.

Developers can create applications that run on mobile platforms that differ in development technology, user interface style, size, resolution, etc. Simply put, user interface of a device is the look and feel of the on-screen menu system. It "comprises the screen menus and icons, keyboard shortcuts, mouse and gesture movements, command language and online help, as well as physical buttons, dials and levers. Also included are all input devices, such as a mouse, keyboard, touch screen, remote control and game controller" (see note 12).

As explained by Florian Mueller, "if you want to obtain a patent on an aspect of a user interface, you are limited by the fact that you can't monopolize end users' body parts. [You] can't take out a patent or copyright on a gesture per se, like using a finger to scroll or using two fingers to zoom. There are only three areas in which you can claim to own intellectual property:

1. the graphical representation of the user interface before a user touches it,
2. the computer's interpretation of user actions on the interface, and
3. the visual effects resulting from user actions.

In practical terms, you can forget about the first part if you basically just draw rectangles, circles, pixels etc. At most you can claim copyright or try to obtain a design patent on a very specific design, but you can't patent this before-the-user-touches kind of functionality if it's just computer graphics of the kind that has been around for decades. For example, the slide-to-unlock slider could have been drawn on computers that existed long before Apple was even founded.

The third part -- the graphical response to a user action -- is more interesting. For example, Apple's rubber-banding patent [known as the "overscroll bounce" patent, that solves the problem that an abrupt end to a scrolling instinctively makes a user press harder because it appears that a device is not responding to a gesture], is at least a different kind of bounce-back from the ones that existed before.

It's the second part where there's most of the opportunity. The "Steve Jobs patent" [a massive 364-page patent with 293 pages of drawings dating back to September 2006], which Samsung has worked around anyway, is an example of a patent that focuses pretty much on the second part. It's about how the computer can distinguish between a vertical/horizontal finger movement and a diagonal movement. 

If you just keep in mind that a patent holder can't own the user's fingers or what goes on in the user's mind, then it's probably easy to see that there's a limit to the breadth of any multi-touch user interface patent".

 

Whether or not it's worth to do it, that's another question. In this situation, it's all about money and time. The patent process could easily take 3 to 4 years (in EU and in the U.S). Then, you need to add the fees for application preparation, filing, examination, attorney, etc. In sum, that’s a lot of money for a startup. Therefore, it depends on your business plan and strategy: if you want to create an app for a short time period, it's not worth to pay a lot of money and to patent it. It's probably better to sell it on different online stores because competitors will not have a sufficient time to copy it anyway.

If you strongly believe that your app is the next big thing (long period), a patent is still not the best idea. The problem is not really in the patent system, but is more in the apps store. Indeed, with all these apps, it's hard to get the attention of the user for a really long period. Consumers like to change and explore new alternatives. Therefore, even if you patent your app and decide to pursue the infringers, the costs that you are going to spend for a patent lawsuit are unlikely to add any added value to your business/startup. Therefore, I don't think it's worth patenting your app.

Beyond these considerations, there may be circumstances where a patent is super useful. For example, an app that improved methods of mapping is definitely a technology worth to be patented[15]. Technology companies like Google, Apple, etc. are certainly not over with possibilities to improve their mapping system. For instance, this patent could be licensed for use by other developers in their own apps and creating a further source of income for your startup.

In conclusion regarding smartphone apps, depending on your business, it's really a case-by-case analysis. Based on the earlier comments, you should ask yourself, among others, the following questions: what commercial benefit would having a patent provide to my startup? If I want a patent, in which market should I invest? Would this patent complement other forms of IP assets associated with the product? Is the lifespan of the technology expected to exceed a couple of years? Etc. Before investing money in a patent application, do your own basic search on the relevant websites.

• What about copyright, design patent and trademark?

In addition to patent protection (if you decide to do it), U.S copyright protection can be used to protect copying of the code behind the app as well as artwork. This protection is created automatically when a software is fixed in a tangible medium. Therefore, the copyright notice should always appear in screens. If you want, you can also register your copyright to the Copyright Office. In conclusion, if you don't have sufficient budget for patents, you should always consider copyright registration.

Always in the U.S., you should also know that smartphone icons and apps are capable of being protected by a design patent (if the design is sufficiently novel). This protection only protects ornamental design of exactly what is pictured. This means that they are weaker than a utility patent, but because they are very easy to get you should consider them to round out your portfolio. A design patent is useful when the design of your product (think of the physical shape and the appearance of the product) is unique. For example, Samsung got awarded a vertically flexed smartphone design patent. The USPTO considers designs for computer-generated icons embodied in articles of manufacture to be statutory subject matter eligible for such protection.

Moreover, you can also protect the icons by trademark. Hereafter are some great examples and inspirations for entrepreneurs.

Due to Apple's redesigned iOS 7 UI going flat, many icons will have to be updated[16]. Just a month after the WWDC, Apple filed for iOS 7 icon trademark applications at the USPTO and the Canadian Intellectual Property Office. As shown on Patently Apple website [17], here are the comparisons [18]:

On July 10, 2013, the USPTO published another Apple's trademark application for the new "iCloud" logo/icon (consistent with Apple's new iOS 7 UI flat design) in Class 09 of the Nice Classification[19].

Of course, this is an extremely good example of what a startup (or any other business smartphone related) should be doing to protect their business/icon/logo. In other words, filing a trademark application (for example at the USPTO), with a beautiful icon/logo, in Class 9 (see below examples), and with a description [20]. For instance, Apple's mail icon was described as follows: The mark consists of a blue square with rounded corners depicting a white stylized envelope. The color dark blue appears in the upper half of the square design with a fade to a lighter blue at the bottom of the square. 

Here are some examples of Class 9 trademark applications filed by Apple[21]:

• For Apple Game Center icon/logo: "Computer software for use in accessing multi-player games and for use in scoring and tracking game performance; computer software to facilitate communications among users via the internet and other computer and electronic communication networks; computer software for use in social networking; computer application software for mobile phones and handheld digital devices, namely, for accessing multi-player games and for use in scoring and tracking game performance".

• For Apple Photos Icon/logo: "Computer software for taking, recording, editing, sharing, and viewing photos, images and video content sold as a feature of handheld mobile digital electronic devices comprised of mobile phones, digital audio and video players, handheld computers, handheld computers, and tablet computers".

• For Apple Mail icon: "computer software for composing, sending, searching, organizing, and reading electronic mail".

• And for a big number of other icons: "Computer software for use as a standard and scientific calculator sold as a feature of handheld mobile digital electronic devices comprised of mobile phones, digital audio and video players, handheld computers, and tablet computers".

 
Recently, Apple filed new trademarks for "iBeacon" icons (more info about this new tech here), in Classes 009 and 036 (as mentioned above) with a description of the word mark (on the left side) as follows: Color is not claimed as a feature of the mark. The mark consists of partially complete concentric circles with a dot in the center above the word "iBeacon".

 


And for this word mark (under Classes 035 and 009): The color(s) black, purple and blue is/are claimed as a feature of the mark. The mark consists of partially complete blue and purple concentric circles with a blue dot in the center above the word "iBeacon" in black for "Computers; computer peripheral devices; computer hardware; handheld digital electronic devices; digital format audio and video players; radios, radio transmitters, and receivers; car audio apparatus; audio components and accessories; network communication apparatus; electronic communication equipment and instruments; optical apparatus and instruments; telecommunications apparatus and instruments; global positioning system (GPS) devices; telephones; wireless communication devices for voice, data or image transmission; apparatus for data storage; computer software; couplers, cables, chargers, docks, docking stations, interfaces, and adapters for use with all of the aforesaid goods; computer equipment for use with all of the aforesaid goods" (Class 009).

But also the two following word marks (in the same classes):
 

Sixthly, in the EU, a further way to protect your brand is through registered designs. It protects the ornamental design, form, appearance or style of objects. However, registered designs only protect the aesthetic aspect and are not intended to protect any functional aspect of the product. Registering your product design gives you a monopoly in it and allows you to stop others from making, selling or using a product which incorporates your design or to which your design has been applied. Designs can be registered with a national office, with the OHIM for EU-wide protection or through the Hague System for the international registration of industrial designs (WIPO).

Always in EU, unregistered designs also enjoy protection under certain conditions. You basically get a free, automatic right when you present an original design to the public. Like the registered designs, the requirements are absolute novelty[22] and individual character[23]. Nonetheless, the protection is maximum 3 years following the publication whereas it's up to 25 years for registered designs.

2.     What can a start-up do to protect their business when a big multinational corporation is "stealing" your smartphone app idea?

Regrettably, not much... If you had the chance to protect your business with intellectual property rights before the "drama", then (in theory) you can sue them for infringement (but that's not a good idea because you eventually will get banned from the apps' platforms). In practice, it will cost you at lot of money and time.  For a startup, this money could, for instance, be invested in an improvement of your core business[24].

As mentioned at the beginning of this article, unfortunately for (young) entrepreneur's, intellectual property is not always the first thing that will cross your mind when you start a business. Entrepreneur's often underestimate the real potential and benefits of it.

I hope these lines (pages) helped you to be aware of the crucial importance of IP in your business (plan). You should strongly consider all these specific IP tools (patent, trademark, design protection, copyright, etc) that are nowadays available, and expertise's that built the right ecosystem in supporting your idea. Hopefully, in the excitement of the creation of your business, you will find the time (and the money) to think about these IP rights considerations. 

All the best with your big mobile application idea!

Follow me on Twitter @tdubuisson or check my professional profile on LinkedIn: http://www.linkedin.com/in/thomasdubuisson

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[1] TechCrunch is a news website focused on information technology companies: http://techcrunch.com/

[2] http://techcrunch.com/2013/06/10/ios-7-steals-mailboxs-gestures-sunrises-layout-bb10s-back-button-weboss-multitasking/ (last visited on July 20, 2013).

[3] Apple defines itself as a design company: http://www.businessinsider.com/apples-designed-by-apple-in-california-2013-6 (last visited on July 20, 2013).

[4] With an estimated value of US$414 billion as of January 2013, see http://www.telegraph.co.uk/finance/9827795/Exxon-overtakes-Apple-as-biggest-public-company.html (last visited on July 20, 2013).

[5] When you know that the mobile app market could be worth $27 billion by the end of 2013 (see http://www.technobuffalo.com/2013/04/23/budget-smartphones-abi-research-report/, last visited on July 20, 2013), it is fundamental to understand why you should protect your business.

[6] For instance, the UK Intellectual Property Office (http://www.ipo.gov.uk/types/tm.htm).

[7]  http://www.uspto.gov/

[8] Listed as “word of the year” by the American Dialect Society in 2010: http://www.americandialect.org/app-voted-2010-word-of-the-year-by-the-american-dialect-society-updated (last visited on July 20, 2013).

[9] In other words, a software “that is used for business or entertainment. The term (…) may refer to virtually any type of program from spreadsheets such as Excel to media players such as iTunes to virtual reality games such as Second Life” (http://www.pcmag.com/encyclopedia/term/37892/application). In contrast, system software “consists of programs that run in the background, enabling applications to run. These programs include assemblers, compilers, file management tools, and the operating system itself. Applications are said to run on top of the system software, since the system software is made of "low-level" programs. While system software is automatically installed with the operating system, you can choose which applications you want to install and run on your computer. Macintosh programs are typically called applications, while Windows programs are often referred to as executable files” (http://www.techterms.com/definition/application).

[10] A mobile operating system (mobile OS) is “an OS built exclusively for a mobile device, such as a smartphone, personal digital assistant (PDA), tablet or other embedded mobile OS (…). A mobile OS is responsible for identifying and defining mobile device features and functions, including keypads, application synchronization, email, thumbwheel and text messaging. A mobile OS is similar to a standard OS (like Windows, Linux, and Mac) but is relatively simple and light and primarily manages the wireless variations of local and broadband connections, mobile multimedia and various input methods: http://www.techopedia.com/definition/3391/mobile-operating-system-mobile-os (last visited on July 20, 2013).

[11] http://venturebeat.com/2013/06/10/wwdc-liveblog/ (last visited on July 20, 2013).

[12] http://www.pcmag.com/encyclopedia/term/53558/user-interface (last visited on July 20, 2013).

[13] More info: http://www.sunrise.am/ and http://techcrunch.com/2013/02/19/sunrise-brilliantly-redefines-calendar-apps-on-ios/

[14] http://techcrunch.com/2013/06/10/ios-7-steals-mailboxs-gestures-sunrises-layout-bb10s-back-button-weboss-multitasking/ (last visited on July 11, 2013).

[15] For another example, see this article: http://www.fosspatents.com/2011/05/worse-than-lodsys-macrosolves-sues.html (last visited on July 11, 2013).

[16] http://www.patentlyapple.com/patently-apple/2013/07/an-avalanche-of-revised-ios-7-icons-surface-at-two-patent-offices-while-apple-files-for-iwatch-trademark-in-japan.html (last visited on July 11, 2013).

[17] http://www.patentlyapple.com/patently-apple/

[18] For the full lists of icons, see: http://www.patentlyapple.com/patently-apple/2013/07/another-big-round-of-new-colorful-ios-7-icon-designs-are-published.html and http://www.patentlyapple.com/patently-apple/2013/06/apple-files-for-new-trademark-covering-facetime-logoicon.html (last visited on July 11, 2013).

[19] http://www.patentlyapple.com/patently-apple/2013/07/apple-files-for-new-flat-design-logoicon-for-icloud-more.html (last visited on July 20, 2013).

[20] see USPTO website: http://www.uspto.gov/

[21] Ibidem.

[22] Absolute novelty means " if no identical design has been made available to the public" (Council Regulation (EC) No 6/2002 of 12 December 2001 on Community designs, art. 5).

[23] A design shall be considered to have individual character if the overall impression it produces on an informed user differs from the overall impression produced on such user by any design which has been made available to the public (Council Regulation (EC) No 6/2002 of 12 December 2001 on Community designs, Art.6).

[24] This matter will be analyzed in another article (hopefully, in the near future).