Intellectual Property considerations for businesses

Posted on Oct 12, 2017 by Rebecca McKenzie   |   Categories: Commercial & Business Law, Intellectual Property

What is intellectual property and what are some types of intellectual property?

The best way to describe what intellectual property actually is, in a general sense, is to say that it results from someone using their mind or intellect to create something new or original. The issue then flows, what can be done to protect the rights attached to the ownership of such property, and how to enforce those rights.

Setting up a business, or maintaining a business, gives rise to a variety of intellectual property issues which should be considered in order to properly protect rights. In Australia we have comprehensive laws protecting intellectual property, which can exist in various forms, such as inventions, a brand name, a trade secret or an artistic design, to name a few. Areas like “copyright”, “patents for inventions” and “trade marks”, are just a few of the areas in the field of intellectual property.

Who actually owns the intellectual property rights?

The question of ownership depends on the circumstance giving rise to the creation of the intellectual property – The general answer is the creator or inventor of the material.

There can often be a dispute about ownership, and a difficulty can arise, particularly in relation to copyright, for example, where no formal steps need to be taken to claim ownership. There is no system of registration with respect to copyright and it’s not necessary to have the letter © and the date written in order to prove ownership. However, that can assist in establishing ownership and at least act as a deterrent for potential copiers.

Another issue that may arise is who owns the intellectual property in the employer/employee relationship. The general position is, unless agreed otherwise – any intellectual property created by the employee in the course of employment belongs to the employer. There can be arguments about what is meant by ‘in the course of employment’, and this will usually depend on what the employee has been hired to do and whether the employee was engaging in ‘private’ work.

The creator may also what is called “assign” their rights, which means they give up legal ownership to someone else, so the question of actual ownership is not always straightforward. Owners can also “license” their intellectual property so that others can legally use it, but ownership is retained by the owner.

What areas of property might be covered by Copyright?

Copyright protects the form of expression of an idea, such as in books and films and music. It can also extend to a wide variety of common business materials, such as databases and tables and computer manuals. Copyright protects the original expression of ideas, and not the ideas themselves. Given that there is no system of formal registration for this area of IP, the moment an idea or creative concept is documented, on paper or electronically, it is automatically protected by copyright.

Trade Marks? – Not just a Logo!

A Trade Mark is a sign, such as a brand name or symbol, which is used to distinguish the trade source of goods and services. Once a Trade Mark is successfully registered through the Australian Trade Marks Office, the owner of the mark has the legal right to use, license or sell the mark. This type of intellectual property can be very important for business, as a logo or a particular branding can often lead to a great deal of goodwill associated with that business.

What’s interesting is that trade mark protection can also extend to colours, sounds or scents, such as fragrances.

Unlike the laws surrounding copyright protection, the trade mark system is based on formal registration and priorities, however some marks, even if they’re not registered, can have some protection due to prior use. However, formal registration is strongly recommended and preferable. Some people think that if they have registered a business name or an internet domain name, for example for their business and website, that they have automatic trade mark protection for that name, however this is not the case.

Other areas of intellectual property – Patents, Circuit Layouts, Designs

There is a system of registration for “patents”, which is a right that is granted for a device or substance or process that is new, inventive, and useful. Relevantly to business, the coverage can also extend to ‘business methods’ or ‘business systems’, such as a plan for managing an organisation.

Also, there are intellectual property rights for circuit layouts for computers for example. There is protection for certain designs, which can be a shape or pattern that is new and distinctive.

This is where confidentiality agreements, for example, in the employment context, are essential in order to protect the employers’ rights relating to the use of intellectual property. For example, “trade secrets” that relate to the process of manufacturing or construction of a product, are important to protect.

Confidentiality agreements are also a must where an inventor might want to “test the waters” for a particular process or invention, and have some protection from others copying that work, for example, before the registration of a formal patent.

An Intellectual Property Checklist for Businesses – “an IP Audit”

• Identify and record your IP assets (you can’t protect and manage your IP without first identifying it).

• Assess the extent of your IP assets within your business – for example, existing and hidden IP acquired or developed by the business.

• Determine the origin and legal ownership of the IP identified.

• Assess the competitive advantage of your IP assets and integrate IP management within the business’ overall strategy and operations.

• Create internal policies and practices for the identification, protection and treatment of IP.

• Consider the ‘value’ of the IP identified – assess the benefits that the IP brings to the business.

• Minimise the risk for legal action for infringing IP not owned by you.