Proper management of intellectual property (IP) rights is important for all businesses and critical for businesses where creativity and innovation are a key part of the business model.
We set out below some insights on how businesses can safeguard unique ideas and creation.
Types of IP rights
The IP rights that most commonly safeguard unique ideas and creations are:
- patents, which protect inventions. For example, Bluetooth, GPS and 3G.
- copyright, which protects certain works (literary, dramatic, musical and artistic) and other subject matter (sound recordings, films, broadcasts and published editions of works).
- trade marks, which distinguish a business’s brand, product or service from its competitors. A trade mark is a sign and may consist of a letter, word, phrase, logo, shape, colour, sound, smell, picture, or any combination of them.
- registered designs, which protect the overall visual appearance of products. For example, Coca-Cola’s unique (vintage) bottle designs, the Game Boy and Apple AirPods.
Document the creative process
It is important that businesses keep detailed records of how and when their IP was created, including the creators and their respective contributions. It is good practice to keep copies of documents used in the creative process (including drafts) and, where relevant, copies of communications between the creators. Well-kept records are likely to make prosecution or defence of any future IP ownership or infringement claims much easier.
Understand who owns the IP
In addition to documenting the creative process, businesses should ensure that they are conscious of who owns the IP. The status of the creators (for example, whether they are employees or contractors), the terms of their engagement (for example, the terms of employment agreements and contractor agreements) and statutory provisions can all affect the ownership of IP rights. It is also important to consider whether any third party IP was used in the development process, in which case the newly created IP may be subject to third party terms of use.
Know how to protect it
The requirements for obtaining an IP right will depend on the type of IP right. Some IP rights, such as patents and designs do not take effect until registration occurs. For those rights, registration is jurisdictional; that is, the rights are limited to each jurisdiction in which registration is sought and granted. Obtaining advice from a specialist IP lawyer can assist a business to understand the costs and scope of protection required, and enable the business to make informed decisions whether it is worthwhile acquiring the rights and in which jurisdictions.
Keep it secret until the IP rights are secured
Some IP rights have a requirement of novelty, distinctiveness or originality. If ideas and creations are disclosed publicly before certain actions are taken to obtain an IP right, the ability to obtain the right may be lost. Again, it is important to seek early advice from an IP lawyer to avoid mis-steps. Generally, where ideas and creations need to be shared with others (for example, for prototyping or testing purposes) before IP rights are secured, businesses should consider putting in place appropriate confidentiality arrangements.
Maintain and leverage your IP rights
Once a business has invested substantial time and cost in obtaining IP rights, it should ensure that the IP rights is maintained and, where possible, leveraged.
Maintaining IP rights includes ensuring that they are renewed effectively (for example, by paying any applicable fees), putting in place appropriate contracts, licences and/or terms of use with any third parties with whom IP is shared and used, and acting quickly in response to any infringement or breach of contract.
Leveraging IP rights effectively may require a business to obtain professional advice as to how to structure its affairs in order to maximise the value of, and protect, its IP rights. This will, of course, depend on the business’ strategy (including any fundraising and exit considerations).
For businesses that rely on their original ideas and creations to thrive, the proper management of IP is paramount to success. If a business does not take proactive steps to protect its IP by identifying and securing IP rights, it may find itself fighting an uphill battle if the IP is challenged or infringed. A proactive approach is key.
By Quincy Wong, Partner, Corporate & Commercial and Troy Gurnett, partner, Commercial Dispute Resolution, Hicksons Lawyers
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