6 types of intellectual property protection and how to defend your business
Your business, your logo, an invention, your software can all be protected. Find out where to start and the tips you'll need to safeguard your business...
Passing off your creation: it's tantamount to grand theft.
You know what you'd do if faced with burglary – no, not fumble around for a baseball bat – you'd install a system to prevent it happening in the first place.
And it's no different with intellectual property, something you may well have spent considerable sums and time creating. There are well-known mechanisms, such as trademarks and patents, you should to be making use of if you haven't already.
“This means protecting anything that required mental creativity, such as the name of your business, its logo, your instruction manual, an invention, a piece of software or a clever widget,” says Peter Brownlow, senior partner in the IP group of international law firm Bird & Bird.
easyGroup creator Stelios Haji-Ioannou is a good example of an entrepreneur with a keen eye for intellectual property. He's defended the company's typeface, colour (orange) and use of the word ‘easy' on numerous occasions already, making the brand and its IP rights an incredibly valuable asset along the way.
The point is the consumer immediately knows the values behind an established brand. And, inevitably, goodwill generated by its activities and awareness raised by its advertising only strengthen the position further. One of the last things you want is some other business taking advantage of the reputation you've worked hard to earn.
What are the main types of intellectual property protection?
Trademark A registered trademark gives the owner legal rights in the mark in the field it is registered. A UK registration takes around six months to obtain, lasts indefinitely, and renewal fees are due every 10 years.
Ownership can be registered nationally with a UK mark through the UK Trademark Registry (typically costing between £600 and £700); across Europe with a European Community mark (costing around £1,200 to file); and international applications can be made up of a bundle of relevant national marks around the world (costs depend on the countries selected) and are made to the World Intellectual Property Organisation (WIPO).
Each mark must specify what goods and services you want covered. For example, ‘Class 9' for software and ‘Class 25' for articles of clothing. There are 42 in total. UK marks can cover three classes for the same price, but elsewhere you have to pay more on top.
Copyright This arises automatically in the UK. It occurs in original works that have not been slavishly copied from anyone else. This applies to the author of the work or their employer and lasts 70 years from the death of the author.
You don't need to do anything to attain this right. However, if you commission another company to design something – a logo for example – the contract terms should acknowledge your ownership of the works.
Ownership of copyright does depend on the facts surrounding the commission and in a case brought by the famous Dr. Martens footwear manufacturer the company succeeded in showing that there was an implied term in a commission to design a logo that the manufacturer owned the copyright.
However, don't think you automatically own copyright, advises Brownlow. “The author owns it unless they've assigned copyright to you.” If you don't agree this at the outset, he adds, it will be much more difficult to persuade them to transfer after the work has been paid for.
Patents A contract between the inventor and the state. In return for disclosing the invention the inventor is awarded a monopoly for 20 years. This is generally applied to technological creations, whether a new product or process.
You can file in the UK, Europe or via the Patent Co-operation Treaty (through WIPO) for international registrations. Don't discuss the invention unless in confidence – always bring a Non-disclosure Agreement (NDA) or confidentiality agreement to the table. IP lawyers can draw these up for you.
Designs An extension of copyright for a new work of individual character. Designs are split into registered and unregistered. To register designs in the UK contact the Designs Registry.
For Europe, contact the Office of Harmonisation of the Internal Market (OHIM). In the UK or Europe unregistered ownership arises automatically and applies to 3D industrially applicable and not commonplace designs, which can mean an unusual shape or configuration (products, clothing, industrial articles).
Protection for Europe is quite limited, lasting only three years, which might be all you need if the product depends on fashion, say. In the UK you're protected for 10 years from the year of first marketing (although competitors can seek a licence of right of your design in the last five years). If registered, protection can last 25 years, providing it is renewed every five years.
Confidence Also an automatic protection for confidential information and trade secrets. Perhaps the most famous trade secret is the recipe for Coca-Cola. All companies will have their own confidential information or trade secrets – the misuse of which might cause them damage.
You can sue those who misuse the information. For this, you need to demonstrate confidentiality through the procedure. Head company documents ‘confidential'. Also, get your law firm or in-house legal function to keep confidential documents.
Domain names You apply for these at Nominet for UK domain names. Successful applications last for two years, when you can renew them. Nominet has a dispute resolution policy to act against cyber squatters or those who have registered a URL similar to your brand in order to divert custom.
The decision of its arbiters is binding and can be made within two months, making it relatively cheap and helping you avoid spending your day in court. Companies who have ended up in court and successfully recovered domain names which have been cyber-squatted include Marks & Spencer and BT Group.
What's the best way to look at protecting my business' IP?
The Patent Office site – www.patent.gov.org – is a good starting point. It's also worth seeking advice from a trademark or patent agent, who can process applications quickly and securely, suggests Lucy Harrold, a senior solicitor in the IP Group of law firm Stephenson Harwood.
Carry out a number of detailed searches before launching anything. Companies often waste huge sums rebranding, only to find they've unwittingly made an enemy. The UK Trademark Registry's a good starting point, but also check trade directories, trade journals, Companies House and carry out internet searches.
Doing unregistered trademark searches is virtually impossible and legal searches in Europe and other key jurisdictions, such as the US, Japan, India, Hong Kong and Singapore can easily cost as much as £50,000.
Ultimately, you have to assess the risk if you find something similar to your proposal. If overlap is minimal or within another market you are fully entitled to leave it to chance.
How to defend your intellectual property
To take action against a perceived infringement of your trademark you'll need to be able to prove you own the rights and be able to show evidence of goodwill, brand awareness and advertising spend.
You should have the ‘earlier right'. There may also need to be evidence that the infringement has caused confusion – possibly involving you carrying out a survey or witness collection programme, which could prove expensive.
“For your case to be viewed favourably, courts will expect you to act quickly if another company infringes,” says Harrold. “In all, you have six years from the date of a wrongful act within which to sue. However, in practice the courts prefer you to act sooner rather than later.
“If you detect you are suffering considerable damage and want to stop an infringement immediately it's important to act swiftly, i.e. within three months, to request an interim injunction, which will prevent continued sale of the product pending trial.”
Doing this will mean you have to agree to a cross-undertaking in damages, meaning that if you fail to win the case, you commit to repaying the other company's losses fl owing from the interim judgement.
“Your other option is to seek a speedy trial order from the court,” adds Harrold, typically enabling you to take the case to trial within around six to nine months and not requiring you to give a cross-undertaking in damages.
How much does it cost to defend your intellectual property?
Always difficult to put a price on, it can cost thousands to defend a trademark. “The vast majority of disputes cost a few thousand pounds and usually settle in the early stages, but, you could be looking at £300,000 plus for a large complex trademark infringement action,” suggests Brownlow.
Patent actions frequently cost double, so realistically it has to be a very valuable asset, core to the business. If you win though, you're likely to be able to recover 60% to 70% of costs, plus damages and interest together with an injunction against the infringer.
The positive side, is the UK is a relatively good jurisdiction for taking action, promising ‘swift' results, particularly where infringements are damaging your business and ‘urgent'.
You could have a decision within six to nine months, in some cases sooner, whereas in the US it can take years. For trademark infringements you can now go to the Patents County Court (for less complicated, less valuable disputes) or the High Court for disputes worth over £50,000.
“Consider taking out insurance for larger disputes – either ‘before event' or ‘after event',” says Brownlow. The terms usually require there to be more than a 50% chance of success before you will be covered, although the premiums will inevitably be high.
Finally, your other option is mediation. This is sometimes overlooked in IP departments but increasingly encouraged by the courts. It may be worth doing, for example, if you can ‘live' with the other company but would like them to pursue other markets.
This is the low cost option likely to set you back £20,000 to £50,000 in mediation fees, plus legal fees of around £15,000 to £20,000. Still not cheap, but better to find some form of resolution.
1. Carry out searches before adopting a brand name
2. File a patent or register a trademark or design first if you're going to market and seeking a backer or licensing agent. Then get them to sign an NDA
3. Use a trademark agent if adopting a new trademark or brand. Their experience is worth the extra cost and will save in the long-run. They will know quickly whether what you?ve got is registerable or distinctive
4. Make sure you get legal title where work has been commissioned. This is essential if you need to enforce it later
5. Review procedures, such as confidentiality, safe keeping, recording, and the process of filing the rights you already have registered
6. Keep original design documents / prototypes, evidence of advertising and date them. Assign responsibility to someone in the company. It?s so easy to focus on the business and neglect this area, but essential if you litigate
7. Review any licensing arrangements
8. Monitor the market for any potential infringements using a trademark or patent agent
9. Set aside a legal budget if possible to enforce your rights
10. Enforce as soon as possible and seek legal advice early
11. Build up a strong case before you sue
12. Review your IP and the existing protection you have. It might need updating if you've moved into new markets or redesigned a logo, for example