Entrepreneurship and industrial property: what to consider and why

Currently, multiple factors require us all to diversify our sources of income.

This could be because you are going to join the labor market for the first time, because you are between jobs, because the income from your current position is not enough to cover constant price rises or –simply– because you have an entrepreneurial spirit and want to give yourself the opportunity to try out that idea you’ve always had which you know could make a difference to your community and yourself.

In any of these circumstances (and many more besides) we have the intention of starting that business we’ve always wanted and bringing it to life. What’s more, the time is ripe for entrepreneurship, as the technological resources at our disposal make the process easier than ever before. Coupled with that, there is a clear governmental trend towards deregulation, which facilitates the opening of new businesses.

Whatever your reasons for taking this step, remember it’s essential that you know and protect the industrial property you may come to own or use, since industrial property is sometimes a very important part of a business’s total value.

Let’s think about some clear examples, such as the brand value of organizations like Coca Cola, McDonald’s, or Real Madrid or what percentage of a product’s total value is received by the owners of certain patents for the automotive, computer, or telecommunications industries.

What is industrial property? What are the main categories you should pay attention to when starting a business?

Industrial property is the power granted by law to individuals or organizations to hold the rights to distinctive industrial creations such as patents or the designs of integrated circuits or to distinctive symbols such as trademarks, slogans, or designations of origin, who can therefore use, exploit , protect, and commercialize these rights.

So, when you start a business, you should pay special attention to protecting (or legally using, if you acquire any third-party rights) any patent or industrial creation that you might generate, as well as any trademarks, slogans, trade names, and other distinctive symbols that identify and make your business unique.

When doing so, you should take care to respect any industrial secrets associated with them, the technical knowledge empowering their use, which we call know-how, and avoid unfair competition. This is because industrial property has an intangible value that grants its owner a certain competitive advantage. Being the result of investing resources, time, and knowledge (or two or more of the above), it deserves to be protected.

These preventive measures will not only save you from a lot of headaches in your new business but also, more importantly, will allow you to capitalize on the commercial value that this industrial property may represent for your startup.

As you are probably aware, a new law was passed on July 1, 2020 in Mexico that regulates this area: The Federal Law for the Protection of Industrial Property. This contains the provisions that will help you understand, in more depth, what it is and how to protect each of these rights and categories, as well as the regulations pertaining to the Mexican Institute of Industrial Property (IMPI), the federal authority responsible for ensuring these rights are respected.

It’s also important to note that contracts are one of the main legal acts through which industrial property rights are protected or acquired. The most common contracts used in this area include licenses (for use and exploitation, public benefit, or compulsory use), franchises, rules of use, or the transfer or assignment of rights. Each have specific aspects you should learn about so that you can make the most of your business and investment and protect them adequately.

Finally, I think it’s important to share that there are various procedures through which you can settle any dispute related to this area.

In general terms, there are judicial means (which involve the traditional administration of justice through one or more judges) and alternative dispute resolution (known as ADR).

The latter includes conciliation, mediation, and arbitration, and the former includes actions for enforcement, rescission, or even annulment of contracts or actions for payment of damages and losses that can be enforced by a competent judge.

In summary, when beginning a business or project, do it seriously: know what industrial property is so that you know how to protect what’s yours and legally use what’s not; familiarize yourself with the law and the powers of the authority responsible for applying it; and understand that, in the (hopefully unlikely) case that you ever become involved in a dispute over this issue, there are efficient non-judicial ways of resolving this, as well as judicial procedures should these prove fruitless.

(Ricardo Luis More Domenech, associate director of the Law Department at the School of Social Sciences and Government, Tec de Monterrey, Queretaro Campus)

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