Generally, IP is an invention or creation which can be owned and used for commercial benefits. It is often the most valuable asset of a business; therefore, investors will want to protect it from being stolen.
There are a number of ways that you can protect your IP from being used by someone else without your approval and in turn increase the value of your IP. This is usually achieved by completing registration of the relevant IP.
Business builds up goodwill in its brand. If such brand is not registered as a trademark, you may be able to rely on the tort of passing off to prevent others from using an identical or highly similar brand, however, such action can be costly and time consuming as it involves court proceedings. By registering a trademark to a name or slogan of your business, you can more effectively stop other people or businesses from using that name or slogan and in turn, preventing them from benefitting from the goodwill you have built up.
It is often believed that buying the right to use domain name and registering company name are enough, however, it isn’t until you register it as a trademark that you can fully protect such name and slogan and minimise the risk of infringement.
In practice, there have been many occasions where after investing a lot of money into branding and trading for a number of years, building up goodwill and their name in the market, a business later found out that they could not register their name as a trademark because someone else has already registered it first. This would undoubtedly cause stress, disruption, and loss to the business either to dispute the trademark or rebrand their business. By checking your mark is available, identifying potential objectors and protecting your brand from the start you can avoid this situation from occurring.
If you have created a new invention in your business, such as a new device or method, you may want to register it as a patent. This would allow you to have exclusive use of such invention unless you grant a licence or authorise others to use it. By being the sole proprietor of the invention, you can also generate income by charging others wishing to use your invention, thus adding value to your business, and attracting more investors. Patent protection is a very specialist area of law and it is important you take specialist advice before embarking on registering a patent.
Copyright arises automatically from anything you create, such as photographs, software, web-content, and database. There is currently no mechanism in the UK to register copyright, although certain requirements must still be met for automatic protection to apply, such as the work needs to be written down or recorded. In some Countries there are central repositories where this work can be stored.
If you hire a developer or designer to create a software or content for your business which can give rise to copyright, an agreement should be entered into to ensure that the IP rights relating to such software or content are properly transferred or assigned to you. Regarding copyright arising from works done by employees during the course of employment, provisions on transfer of IP rights should also be outlined in the employment contracts to grant additional protection, although the IP rights created in the course of their employment will belong to you.
Designs cover the appearance, shape, configuration or decoration of the whole or part of a product or an article. In the UK, unregistered designs are automatically protected through two types of rights, namely ‘design right’ and ‘supplementary unregistered design right’. However, both of these rights provide less protection than registered design rights and last for shorter amounts of time.
A design must meet certain requirements to be registered, such as the design must be new and have individual character. If you have registered a design, you can stop other people from making products which create the same overall impression as your design. Registered designs are protected for up to 25 years if renewal fees are paid every five years.
For more information on how to protect different types of intellectual property please see our article here: https://www.acitylawfirm.com/intellectual-property-what-is-it-do-i-need-it-and-how-do-i-protect-it/
Protecting IP of international businesses
If your business operates in other countries outside of England, it is recommended to protect your trade marks in the relevant jurisdictions to ensure that it is also protected there. In addition, it is worth exploring the market in the country to which you plan to expand and their IP law to ensure that you can register your IP there without opposition and potentially having to rebrand your business, costing more time and money. Trade mark registration is country specific and therefore just because you have protection in one country does not mean you will be protected in another.
Protecting new technology
Companies involved in emerging technologies, such as virtual reality and the Internet of Things, should obtain legal advice regarding protection of their IP because of the complexities of the assets. For example, complications can arise where registered IP rights are used within a virtual reality world, or if users create something eligible for IP protection whilst using virtual reality. With all the rapid developments of technology, the legal system, including IP law, needs to develop alongside technology and it is expected that the landscape will continue changing over the next few years.
What are investors looking for?
IP and it’s protection is very important for a business. It’s what enables your customer to know that they are buying from you and enables you to generate goodwill in your business and its products.
Before investing into a company, an investor will almost certainly look at the scope and scale of your IP and consider whether there are any ongoing or potential claims against it. Before are some helpful tips on what investors will be looking for:
Clear and unequivocal ownership or right to use of the IP:
- Investors will likely ask for proof of your ownership or right to use IP, such as registration certificates of trademarks or assignments or licences to use IP from your IT developers. Having an organised and up-to-date IP portfolio will show an investor exactly what your company owns in relation to IP.
- If the IP is not registered, such as unregistered copyright or design rights, you could include drawings/first drafts of the creation and showing a date or timestamp which would assist in any infringement claim (see below).
- Business IP should be held by the company and not its creators personally so that the investor can have it set aside as collateral for their investment. If this is not the case, an assignment agreement between the creators and the company should be entered into before you seek investment.
Ongoing or potential infringement claims:
- If you have had to fight against an infringement claim, the investor will likely want to know the scale of the infringement and how the matter can be resolved.
- If you have a registered trademark, there are watching services which will notify you if someone is attempting to register a similar mark. It is a good idea to also keep an eye out for anyone using a similar name, brand, or product to you to ensure there is no confusion or similarity to your business in which case you should consider bringing a claim for passing off or infringement against the third party.
Preventing unauthorised use of IP:
It can be both stressful and costly when you realise that someone is benefitting from your IP without your consent. Therefore, prevention is the best way to protect your IP and you should register your IP rights at an early stage to ensure security and minimise risk of infringement. Software and coding are generally protected by copyright (and in some instances a patent). When someone uses your software or coding without your permission, there are steps you can take to stop them.
- Copyright: You should first send a cease-and-desist letter to the unauthorised user to attempt to resolve the issue without further costs. In the letter, you should provide details of your copyright, including evidence of your ownership, and request that the breach stops. If this is not successful, you can consider other options, such as mediation or litigation to request for an injunction and claim for damages.
- Patent: Patent infringement can be dealt with in a similar as copyright as above. A cease-and-desist letter should first be sent to provide the infringer with the opportunity to stop before you initiate legal proceedings against them. If they refuse to do so, litigation can help you obtain an injunction and/or damages from the infringement. Action can also be taken against infringement whilst a patent application is being processed. Further, patents are generally registrable in different jurisdictions so you should also consider other countries where the infringement can occur.
IP is important for almost all businesses. It is an investment to register your brand as soon as possible and keep a clear and up-to-date IP records, including by whom, when and how IP is created. You should do all you can to try and protect your business from IP infringement. When some looks to infringe your IP, they are infringing on the goodwill of your business.
IP can be extremely valuable assets to your business and thus, you should obtain advice from a specialist lawyer on the options and procedures to protect your IP.