Addressing the legal issues of an innovative start-up company

Abstract

Before examining the substance of the law it is necessary to discuss the contrast between law and practice. It is important to keep in mind that the letter of the law is sometimes not what is done in practice. This realisation is often referred to as the “law and society perspective.” Advocates of this perspective treat legal doctrine as more than just a closed system because they recognise that there are other external influences at play. Beyond the law, people are also influenced by other factors such as social roles, morals, religion and culture. For example, university researchers have an external incentive mechanism outside of IP law. Such researchers frequently prefer to publish their results and discoveries in academic journals rather than file for patents. A patent cannot be granted where there has been a publication. However the researchers are motivated by other incentives such as access to research funds and the attainment of professorship.

The Law and Society perspective highlights the fact that the formal processes, which are provided for by the law are at times substituted by informal customs and understandings. An information technology (IT) firm that contributed to this paper by participating in an interview (Interviewee A), provided a good example of such an occurrence. Rather than use any of the formal IP modes of protection which are discussed in the following sections of this paper, ‘Interviewee A’ uses a very unorthodox strategy to protect their IP. They said: “we rely on employment contracts, code of conduct, and especially personal ethics and behaviour to protect our IP. We therefore have a company culture that encourages teamwork and cooperation”.