Creativity has economic potential. Concrete manifestations of this statement are startups, companies whose goal is to execute their innovations to generate economic value.
Intellectual property law recognizes this situation and provides the necessary legal instruments to protect creativity. Therefore, through the proper use of intellectual property rights, startups have more chance to convert creativity into economic returns.
The Brazilian legislature is aware of the startups’ relevance and promulgates statutes to grant them adequate legal treatment, including the startup’s intellectual property protection.
Complementary Law No. 167/2019 and Inova Simples
In this sense, Complementary Law No. 167/2019, published on April 25th, created Inova Simples, a simplified special regime for startups, with the purpose of stimulating their creation, formalization, development, and consolidation.
According to the law, startups are innovative companies that (i) aim to improve existing systems, methods, business models, production, services, or products (a scenario in which the startup is incremental), or not, when they relate, therefore, to the creation of something new (a situation in which the startup is disruptive); and ii) develop their innovations under uncertain conditions, requiring constant experimentation and validation before they can fully start their business and earn revenue.
The differentiated treatment by Inova Simples consists of a summary procedure for opening and closing startups, which will occur in a simplified and automatic form on an official website of the federal government. The owners of the startup submitted to the system must provide, on their own form, among other information, a description of the scope of the innovative business intention and a definition of the corporate name, in which the expression "Inova Simples (I.S.)" must be included.
To better protect the startup’s intellectual property, the digital form will have a field or icon for automatic reporting to the National Institute of Intellectual Property (INPI) of the scope of the startup’s inventive content for the purposes of trademarks and patents’ registration. The INPI must create a mechanism that directs the startup’s data for summary processing of the startup’s requests for trademark and patent registrations.
Once the registration is correctly completed, the system will create a specific CNPJ number for the startup submitted to Inova Simples, which must immediately open a corporate bank account to capture and pay its capital, which may come from the owners, an investor domiciled abroad, or a public or private credit line, among other sources provided by law.
If the startup is not successful in developing its scope, the holders can cancel the startup’s CNPJ by a simple declaration on the same website where they registered the startup.
The law is unclear on the summary processing of startup trademark and patent application requests. The details will need further regulation, when it will be possible to analyze the change in an in-depth manner.
On the other hand, the law has the merit of drawing attention from startup’s owners to the importance of protecting the startups’ intellectual property. The possibility that a startup may be legally born with its trademarks and patents registered or applied for is an advance in terms of protection, especially at the startup’s initial moment, when the disclosure of innovations to third parties is necessary in order to obtain investments.
With attention focused on protecting the startup’s intellectual property, it is important that the owners seek appropriate legal advice in this area. Despite limited resources, a “do-it-yourself” attitude is risky. After all, innovation is the startup’s main asset.