Many businesses, particularly small and medium enterprises (SMEs) do not consider Intellectual Property (IP) of primary importance, especially when resources are sparse and the organisation is directing its efforts to growing the business and profit generation. Some organisations may also find it difficult to identify their IPs and perhaps understand how this can benefit them.
So what are IP rights (IPRs) and how do they arise?
IPRs are formed from creations of the intellect and usually give the creators an exclusive right over the use of his/her creations. This could be perpetual or for a certain period of time, depending upon the type of creation or the right/s it attracts. There are a large number of different IPRs that can exist but some of the most common have been briefly explained below.
A patent right can be given to a product or a process that gives a new technical solution to a problem. The invention must be new, useful and not obvious. A patent right exists for a period of 20 years from the filing date of an application and it provides a complete monopoly, excluding others from exploiting the invention during that period.
A registered design right provides protection to the outward appearance of a product or part of a product. It can protect the shape, configuration, pattern or ornament applied to an article by any industrial process. Registered designs can be renewed every 5 years for a maximum period of 25 years.
A trade mark is any sign, name, mark or logo that differentiates your business’ goods or services from those of other traders. A trade mark must be distinctive and non-descriptive of the goods it represents to gain registration. It can be renewed perpetually if the requisite use conditions are fulfilled.
Trade Dress or Getup
This refers to the visual effect of marketing and includes the overall image, get-up or recognisable distinguishing features of a product or service such as the nature and layout of a store, the shelving, tables etc.
Copyright is a legal right that protects the use of your work once your idea has been put into physical form and allows individuals such as artists, composers and writers to own the fruits of their creativity and control the use of their works. In the majority of cases, the protection period is the life of the author plus 70 years.
Although it is a creation of the mind, the IP needs to be put in a physical medium before it is of legal significance. Transfixing a concept into a physical medium crystallises and transforms the idea into rights capable of protection and enforcement. For example, an idea for a design will not be considered an IP right. However, in its physical form, the drawing or the design would attract copyright.
Most people are not aware that there could be many overlapping IPRs in the same asset. For example, a design could attract artistic copyright and registered or unregistered design rights and / or even a trade mark capable of trade mark protection.
Some IPRs arise automatically, such as copyright (although you can apply to register this protection in some countries e.g. UK, China and the US), whilst other IPRs attract the requirement for registration and the payment of fees.
Having the correct type of IPR protection or strategy will help to stop third parties from stealing or copying your various assets including:
- product names and brands (trade marks);
- business and product logos (copyright, design rights or trade mark);
- your business name (trade mark);
- the distinctive get up or trade dress of your business (protected by the law of passing off);
- your inventions (patents);
- the design or appearance of your products as the shape or configurations can attract IP protection (registered designs and unregistered design rights);
- things you write (copyright), make or produce (design and / or trade mark); and
- in modern businesses, the domain name which is essentially a global addressing system, is increasingly considered part of an organisation’s IPR.
For some organisations the IPRs it owns are worth much more than its physical assets. This is certainly the case for some franchising models where the brand and the trade dress are the main assets of the franchisor.
The million dollar question is what measures an organisation should adopt in relation to its IPR and the extent it should be protected, maintained and enforced. The question is felt to be even more germane to SMEs where budget is an issue.
Very few companies, irrespective of size, have infinite resources and IPRs can turn out to be rather costly to protect. IPRs are by their nature territorial in scope and, therefore, any protection their registration affords is correspondingly limited to that country. For countries that trade beyond UK or the EU borders, the organisation will need to consider obtaining protection abroad, otherwise they could be completely open to IPR infringement in those countries.
An IPR strategy that is well thought out and fit for purpose should be developed and implemented, taking into account the immediate, medium term and long term needs, as the organisation develops its products and markets. Sensible use of budget to get maximum leverage should be key. For example, if a product is a limited edition offering with a short term promotional, marketing or limited numbers of the products being created, registering the IPRs is of minimal value as the products will be out of production by the time any IPRs are registered.
A good IPR strategy needs to be flexible, updated regularly and should shadow the commercial direction and intention of the business since it is there to enhance the assets and value of the business and organisation.
Whilst protection of IPRs is a question to be considered, another very important consideration is the need for clearance procedures to ensure that the organisation is not infringing the IPRs of third parties. Infringement of IPRs can lead to damages, an injunction not to infringe and, in some cases, leave the infringers open to criminal proceedings. For SMEs especially, these procedures are very important as they are unlikely to have the budget to defend infringement proceedings, which could adversely affect the financial or commercial viability of the organisation.