Trademark and IP Strategy for Startups: Clearance Before Choosing a Name and Choosing the Right Protection

Hello, I'm Noriaki Asato, Representative Attorney at LegalAgent.

There are moments when a company has decided on a service name, ordered a logo and even finished drafting the press release, and only then realizes: "We never checked whether the name is already registered as a trademark." Registering the company and acquiring a domain name do not, by themselves, confirm that no other company has registered the same name as a trademark. If the logo, business cards and website have to be redone, the company not only incurs unnecessary costs but also bears the heavy burden of changing a company or service name it has already announced.

IP strategy is often understood as simply filing as many patent applications as possible. What actually shapes a business's competitiveness, however, is how individual assets such as names, technologies and designs are combined and protected. The substance of IP strategy is the work of choosing, asset by asset, among the available means: obtaining rights, managing confidentiality, contracts and the timing of disclosure. From the founding stage through around Series A, this work of deciding the combination for each of the company's assets needs to come before decisions about filing itself.

Identifying IP Candidates Based on the Business Plan

The starting point for IP strategy is the business plan. If a company files applications on a whim without confirming which of its products, technologies and designs are the source of its competitive advantage, it may end up with a line-up of rights that cost a great deal but have little business effect.

When taking inventory of the company's assets, organizing them into the following six categories makes the picture easier to see.

• Names: company name, service names, brand names, logos
• Technology: algorithms, system architecture, manufacturing methods
• Design: UI, packaging, product shape
• Data: training data, customer data, analysis results
• Know-how: business workflows, pricing methods, sales methods
• Content: articles, images, videos, characters

For each asset, checking whether it serves as a weapon for explaining the difference from competitors, whether outside parties such as contractors or joint development partners are involved, and whether there are plans to announce or sell it within the next six months to one year will reveal the priorities. Patents and trademarks are systems under which rights are sought by filing an application and obtaining registration. Copyright, by contrast, arises without any formalities at the moment a creative expression comes into being. Trade secrets are a system that regulates the wrongful acquisition, use or disclosure of information managed as confidential. Bearing in mind that the requirements for protection differ for each, the company chooses among them according to the nature of the subject matter.

Trademark Clearance Before Deciding on a Company or Service Name

Before finalizing a company or service name, it is important to know that trade name registration, domain acquisition and trademark registration are each independent systems, and completing one does not give you the effect of the others.

Registering a trade name at the Legal Affairs Bureau only prohibits registration of an identical trade name at an identical location (Article 27 of the Commercial Registration Act). If the address is different, the system does not prevent another company from registering the same company name. Article 8 of the Companies Act prohibits using, for a wrongful purpose, a name likely to cause the company to be mistaken for another company and permits injunctive relief, but invoking this provision requires showing that the other party has a "wrongful purpose," and a mere similarity of company names does not necessarily allow you to demand an immediate stop to the use.

Acquiring a domain name is likewise only an allocation based on a contract with the registrar; the position of holding and using that domain is a separate matter from holding a trademark right in the name. If the acquired domain conflicts with another company's registered trademark, the trademark owner may still be able to demand that you stop using it even though you hold the domain.

Trademark registration, by contrast, is a system under which, after filing with the Japan Patent Office (JPO) and examination, the owner obtains, for the designated goods and services, an exclusive right to use the registered trademark and a prohibitive right to exclude the use of similar marks (Articles 25 and 37 of the Trademark Act). Japan's Trademark Act follows a first-to-file principle, and as a rule, for identical or similar marks used on identical or similar goods or services, the party that filed first prevails. Whether goods or services are similar is not necessarily determined by class numbers alone but is judged according to the content of the designated goods and services. There is also an exception where the prior applicant consents and there is no likelihood of confusion (Article 8(1) of the Trademark Act), so the individual requirements must be checked. It is a mistake to assume that registering a company name automatically secures a trademark right in the same name; trade name registration, domain acquisition and trademark registration each need to be checked separately.

Before formally deciding on a company or service name, searching pending and registered trademarks on J-PlatPat, provided by the National Center for Industrial Property Information and Training (INPIT), and, where necessary, commissioning a clearance search by a patent attorney are ways to reduce the risk of being forced to change the name later. Even after a search, however, the possibility of an adverse examination decision or an infringement dispute remains. If the logo design, domain and printed materials such as business cards are prepared first, discovering a conflict with another company's trademark triggers multiple costs at once: a change of company name, a domain migration and reprinting of materials.

Choosing Among Patents, Designs, Copyright and Trade Secrets, and Checks Before Disclosure

Once names are sorted out, the company considers which system to use to protect each of its technologies, designs, content and other assets. Because each system differs in what it protects and what it requires, mistaking the nature of an asset means appropriate protection will not be obtained.

An "invention" under the Patent Act means a highly advanced creation of technical ideas utilizing the laws of nature (Article 2(1) of the Patent Act). For inventions satisfying requirements such as novelty (Article 29(1)) and inventive step (Article 29(2)), a patent right arises upon registration of its establishment. The term in principle expires 20 years from the filing date, though an extension system is available in certain cases (Article 67(1) of the Patent Act). Patent applications are in principle subject to publication, and the technical information is disclosed to the public, so the effect of disclosure that accompanies obtaining rights also needs to be considered.

The design system protects designs that meet the requirements of Article 2 of the Design Act, such as the shapes of articles and buildings and certain images relating to functions. For applications filed on or after April 1, 2020, the term in principle expires 25 years from the filing date (Article 21 of the same Act). The term of a related design runs from the filing date of the basic design (the first principal design) in the group of related designs, and the former system applies to applications filed on or before March 31, 2020. The trademark system protects signs such as names and logos that identify goods and services, and helps maintain business goodwill. Even at the founding stage, when little goodwill has been built up through use, filing and registration can be considered for marks that meet the registration requirements. The term is 10 years from registration, but long-term protection is possible by continuing to file for renewal and pay registration fees (Article 19(1) and (2) of the Trademark Act). Registration is not renewed automatically just because you keep using the mark, so deadlines must not be neglected.

Copyright protects creative expressions of thoughts or sentiments (Article 2(1)(i) of the Copyright Act) and arises naturally at the moment of creation, without any application or registration (the principle of no formalities). What copyright protects is the concrete "expression," not the underlying "idea" itself. This is known in legal scholarship as the idea-expression dichotomy: even if you explain your business angle or the concept of your business model orally or in a pitch deck, no copyright arises in the concept itself. If you want to protect the originality of an idea, rather than relying solely on copyright, consider concluding non-disclosure agreements and managing it as a trade secret.

Trade secrets work differently from systems in which rights are acquired by filing. Under the Unfair Competition Prevention Act, protection as a trade secret requires three elements: confidentiality management, usefulness and non-public status (Article 2(6) of the Unfair Competition Prevention Act). While no registration is required, being managed as a secret is itself a prerequisite for protection. Technical information that has been made public loses its non-public status, but it is entirely possible to separate the core disclosed in a patent from surrounding manufacturing conditions and know-how that are not disclosed, and to combine obtaining rights with confidentiality management. Note that once a patent application is filed, its technical content is in principle disclosed through the application publication system, so after publication you can no longer claim non-public status for that content as a trade secret.

Which system to use is decided by whether the benefit of disclosing and taking an exclusive right, or the benefit of keeping the secret and preventing imitation, is greater for the business. For technology that can be reproduced by disassembling and analyzing the product, securing an exclusive right through a patent tends to be more effective. Conversely, for manufacturing processes that are hard to reproduce through reverse engineering, customer data that is updated daily, or pricing logic, thorough confidentiality management may better fit the realities of the business. Avoid a one-size-fits-all approach of filing on every technology or keeping every piece of information secret, and compare individually how easily the technology can be imitated, the time and cost of obtaining rights, and the burden of maintaining confidentiality.

Particular care is needed over the timing of disclosure for technologies being considered for patents. Under the Patent Act, if before filing an invention is presented at a trade show or on social media, or discussed in a pitch to a party not bound by confidentiality, and thereby becomes publicly known, publicly worked, or available to the public in a publication or over the internet, it loses novelty and cannot be patented (each item of Article 29(1) of the Patent Act). Even when making a limited disclosure under a duty of confidentiality, the content disclosed and the other party's obligations should be checked individually.

As a remedy to mitigate this risk, there is an exception to lack of novelty (Article 30 of the Patent Act). Where the invention was disclosed by an act of the person having the right to obtain a patent, relief is available so that the disclosure does not destroy novelty, provided requirements are met such as, in principle, filing within one year of the disclosure date, submitting a request for application of the exception at filing, and submitting a certificate within 30 days after filing. A separate exception also exists where the invention was disclosed against the will of the right holder. However, the exception to lack of novelty does not secure a priority filing date, so it cannot be asserted against a case where, after your disclosure, another third party independently discloses or files the same invention first. Even where there are business reasons to hurry an announcement, the schedule should be built around filing before disclosure as the baseline. The application of the exception is subject to limitations on scope and procedure, and foreign systems treat it differently. Details are available in the JPO's guidance on the exception to lack of novelty (Japanese).

For information you want to manage as a trade secret, checks before it leaves the company are also essential. The confidentiality management requirement asks whether the company's intention to manage the information as secret is made recognizable to those who access it. Access restrictions and confidentiality markings such as "Confidential" are combined according to the nature of the information and the company's circumstances. The law does not uniformly require every specific measure; rather, it asks whether management suited to the actual situation is in place. Even for pitch decks and data rooms disclosed to joint development partners or investors, depending not only on whether there is an NDA or a confidentiality marking but also on the actual state of management, including access control, the information may later not be recognized as a trade secret under the Unfair Competition Prevention Act. The practical perspective for checking contract clauses is covered in Checkpoints for Reviewing IP Ownership Clauses.

Before setting the embargo date for a press release, the date of a trade show exhibition or the schedule of an investor briefing, it is important to settle internally, for the relevant technologies and designs, whether to file a patent application first or to treat them clearly as subject to an NDA.

Criteria for Domestic Filing and Overseas Expansion

Patents, trademarks and designs follow the principle of territoriality, under which rights must in principle be acquired country by country or region by region. Even if you hold rights in Japan, you cannot use those Japanese rights to enjoin acts completed in a foreign country. However, acts on networks that cross borders require a concrete examination of matters such as where the act takes place and its effects in Japan. The mere fact that a server is located abroad does not immediately rule out the possibility of infringing a Japanese patent.

If you plan to expand overseas, in addition to filing separately in each target country, there is the option of using international filing systems based on treaties. For patents, there is the priority system under the Paris Convention for the Protection of Industrial Property and the international application system under the Patent Cooperation Treaty (PCT); for trademarks, there is the international registration system under the Protocol Relating to the Madrid Agreement (Madrid Protocol). All of these merely simplify filing procedures to a certain extent; none creates a single worldwide right. After a PCT application, the grant of a patent is decided by the patent office of each country or region, and the Madrid system likewise is a mechanism for seeking protection in designated countries or regions. Examination standards, costs and the calculation of priority periods for each designated country vary by system and case, so when considering their use, confirm estimates and deadlines with both your domestic representative and local agents.

The criteria for deciding whether to file abroad go beyond simply increasing the number of applications; they are business facts: in which countries you have users or revenue, whether the market is one where counterfeits and similar services tend to appear, and whether contracts with local partners or distributors set conditions for trademark use and IP protection. Even before plans for overseas expansion become concrete, completing preliminary trademark searches in the main candidate countries makes it easier to avoid having to change the brand name locally.

Preparing Documents for Investment, Partnerships and M&A, and a 90-Day Plan

Investors, partners and acquirers in M&A examine the state of intellectual property not merely in terms of whether registration certificates exist but from the standpoint of whether the business can be operated on an ongoing basis. In buy-side legal due diligence, in addition to trademarks, patents and copyrights, source code, designs and deliverables from development contractors are also examined. Domains, social media accounts, know-how, AI models and training data are also included, and the buyer checks whether rights transfers, licenses or management authority over accounts from founders, employees, contractors and joint development partners to the company have been properly secured. Rather than treating data, social media accounts and the like all as objects of a single ownership right, the rights relationships are examined in light of contractual and personal data constraints (Buy-Side Legal DD Checklist for Acquiring a Startup).

What tends to become an issue here is how IP ownership clauses are worded in service agreements and design production agreements. If the scope of deliverables, the exclusion of pre-existing assets, the non-assertion of moral rights, and the conditions for using third-party materials and OSS are ambiguous in the clauses, the company will be unable to explain whether it holds rights to freely use and modify the core parts of its product. How to read ownership clauses is covered in Checkpoints for Reviewing IP Ownership Clauses. The issue of whether rights transfers for deliverables involving outside engineers or designers in the early founding period can be confirmed in the contracts should be addressed together with the review of capital policy and contracts covered in A Legal Checklist to Review Before Series A.

Documents to show investors and DD reviewers mainly include the following.

• Trademark register records and a list of pending trademarks
• A list of patent applications
• Service agreements and their IP ownership clauses
• Notifications relating to employee inventions
• A list of administrators of domains and social media accounts
• A trade secret management register (records of the covered information and how it is managed)

The absence of these documents does not necessarily become an immediate obstacle to a transaction, but relying only on oral explanations may rebound on price negotiations and the terms of representations and warranties.

The IP management described so far can be advanced steadily by breaking it down into an action plan with 90 days as a guideline. The 90 days is a guideline for an action plan that completes everything from inventory to initial measures in one cycle, and should be distinguished from statutory deadlines. Where there are assets with approaching filing deadlines or planned announcements, address them as the top priority without waiting for this sequence.

Period	Main tasks
First 30 days	Identify assets; check existing trademark registrations and filing status, IP ownership clauses in service agreements, and technologies and designs already disclosed
Next 30 days	Clearance searches for high-priority names, technologies and designs; preparation of filings; putting confidentiality management measures for trade secrets in place
Final 30 days	Organize documents into a form that can be shown to investors and business partners

In the first 30 days, identify IP candidates from the business plan and check, for each asset, whether it is a source of competitive advantage, whether outside third parties are already involved, and whether there are plans to announce or sell it within six months to one year. During this period, also prepare lists of existing trademark registrations and filing status, IP ownership clauses in existing service agreements, and technologies and designs already disclosed.

In the next 30 days, for high-priority names, technologies and designs, consider trademark clearance searches and whether patent or design registration applications are needed, and advance filing preparations starting with items scheduled for disclosure. In parallel, for information to be managed as trade secrets, put confidentiality management measures in place, such as access restrictions, NDAs and confidentiality markings on documents.

In the final 30 days, organize the documents into a form that can be shown to investors and business partners. If there are assets not yet addressed, evaluating the risks that arise in the meantime and being ready to explain what has not been addressed and by when it will be will help at the next fundraising round or M&A.

What you can start on first thing next week is to keep your business plan and product roadmap at hand and list your assets using the six categories above. If you already have a finalized company or service name, you can begin by checking on J-PlatPat whether that mark has already been registered. Pre-fundraising legal work, including the preparation of IP documentation, is handled under Startup Legal and Fundraising Support.

Frequently asked questions

If we have registered the company and acquired a domain, have we also secured the trademark right for the same name?

Not necessarily. Under Article 27 of the Commercial Registration Act, trade name registration only prohibits registering an identical trade name at an identical location, and it does not prevent a company at a different address from using the same company name. Acquiring a domain is likewise a technical registration based on a contract with a registrar and does not create an exclusive right against third parties. To obtain an exclusive right and a prohibitive right for designated classes of goods and services, a trademark application to the Japan Patent Office is required (Articles 25 and 37 of the Trademark Act).

Is an idea protected by copyright just because I explained it orally or in a pitch deck?

It is likely not protected. What the Copyright Act protects is a creative expression of thoughts or sentiments (Article 2(1)(i) of the Copyright Act), and ideas themselves are not covered. If you want to protect a business angle or the concept behind a business model, you need to consider concluding a non-disclosure agreement and managing the information as a trade secret in a way that meets the requirements of confidentiality management, usefulness and non-public status (Article 2(6) of the Unfair Competition Prevention Act).

Should we file for every technology that can be patented?

Not necessarily. When a patent application is filed, the technical content is in principle made public through the application publication system, so while you gain an exclusive right, you lose protection through confidentiality management. Patenting tends to be effective for technology that competitors can reproduce by disassembling and analyzing the product, whereas for technology that is hard to reproduce through reverse engineering or data that is updated daily, thorough confidentiality management may better fit the realities of the business. It is necessary to decide technology by technology, comparing how easily it can be imitated, the cost and time of obtaining rights, and the cost of confidentiality management.