Date 9 August 2006
A surprising number of businesses do not consider themselves to be owners of intellectual property (‘IP’), but in fact all businesses create, at a minimum, a trading name and copyright.
This article sets out the basic principles of copyright, registered and unregistered designs, trade marks, domain names, patents and know-how in the UK. The article also gives tips on strategy and protection, some of which are free and easy to implement. With this information, business owners should be able to:
- identify their IP
- obtain ownership of IP
- consider IP protection.
IP ownership enables the owner to use, change, reproduce and exploit their IP without paying licence fees or obtaining permission. Exploitation of IP can provide fresh revenue: it can be licensed to third parties, it can also be sold.
Your trading name is an important intangible asset: it identifies your business. Recognition of your trading name – sometimes known as branding, lets customers find you and your products. This increases the value of your business. Failure to protect a trading name can result in confusion and reduce the value of your marketplace identity, affecting sales and market share.
Copyright
Copyright exists automatically in original material such as software, websites, marketing materials, databases, paintings, music, books.
The creator of an original work owns the copyright in it - with two exceptions:
- If an employee creates an original piece of work, the employer usually owns the copyright in it.
- The creator owns the copyright in a commissioned artefact, such as a website. The person commissioning, has an implied licence to use the work for purposes communicated to the creator. They don’t own it. To change the work, or use it for purposes outside the original commission, a licence or assignment may be required.
If you commission a website, you may have a licence to use it, but not to change it. This should be dealt with in a written agreement. Ideally, you should obtain an assignment of the assignable copyright in the website (eg graphics created by the web designer), and a licence to use items owned by third parties, such as software.
In the UK, copyright is asserted by applying a notice to the original work. The copyright notice on this article reads © SA Law LLP 2006. I am the creator of it, but as I am employed by SA Law LLP, the copyright vests in the firm. IP notices on goods and services can assist claimants in infringement proceedings and enforce the relationship between the goods, services or works and the IP owner.
It is good practice to keep records of the development of IP works, especially those with unregistered rights. They can be used as evidence in case of a claim for copyright infringement. Drafts should be dated and marked with the creator’s name.
For most forms of work copyright protection lasts for 70 years from the end of the year the author died however, protection in sound recordings and broadcasts lasts for 50 years and 25 years for published editions.
Designs
Designs can be registered or unregistered. Registered designs provide the owner with a monopoly right for a new design, that is not reminiscent of others. They can be the shape of a product, or a design, such as a pattern applied to china. Designs dictated by function cannot be registered.
Unregistered designs or ‘Design Right’ is for designs that are not commonplace in the relevant design field. The protection only extends to the shape or configuration of a product.
The creator of a design is treated as its first owner unless he or she was an employee, in which case the employer is the first owner. However, if a design is commissioned the commissioner is the first owner, not the designer.
Registered designs can be registered inexpensively at the UK Patent Office, and viewed at www.ipo.gov.uk. Owners of registered designs can prevent third parties from using or copying them without permission, even if the copy is accidental.
You can assert rights in a design by placing a notice on it; if the notice includes the design number it may be possible to claim damages from a defendant who claims an infringement was innocent. The notice should read: Registered Design No. 12345678, or Registered Design Pending Application No. 09876543.
It is an offence to place the registered or pending notice on an unregistered product. Instead, use a notice that says "Design right" quoting the name of the design right owner and the year of first marketing. For example, ‘Design Right SA LAW LLP 2006’
Registered design right lasts up to 25 years. The protection has to be renewed every 5 years. It is only available in the jurisdiction in which it is registered. Unregistered design right lasts for a maximum of 15 years. The monopoly only lasts for the first 5 years. For the remaining time third parties are entitled to licences to make and sell the design.
Trade Marks
A trade mark is a sign or device that distinguishes a business or brand. It can be made up of words, signs, shapes and numbers. It can include personal names.
Many people believe that by incorporating a business or charity, proprietorship rights in the incorporated name have automatically been obtained. This is not the case. With some exceptions, Companies House and the Charities Commission will register a business or charity name as long it is not identical to any other. For example, the addition of ‘Group’ or ‘UK’ to what would have been an identical name, would be sufficient. (This practice, however, can lead to confusion.)
A trade mark is owned by the person or business who has registered it, or used it for long enough to have a reputation and developed goodwill in the name.
Copyright may also subsist in a corporate logo. If your business does not own copyright in the logo, you may not be able to obtain trade mark protection until the copyright has been assigned to the business.
The best form of protection for a trade mark is to register it. A registration lasts indefinitely as long as the renewals are kept up. They are due every 10 years and are inexpensive.
A trade mark is registered specifically for the goods and services to which it will be applied. Generally, a claim for trade mark infringement will be for use of an identical or similar mark for identical or similar goods or services. If a registration has been filed expertly it should be easier to claim trade mark infringement than to bring a claim for the common law tort of passing off, which is available to unregistered trade mark owners. The process of registration includes a search of registers. If a third party has registered a similar mark, the mark will be cited by the examiner but it may still be possible to obtain registration.
Unregistered trade names, logos and brands can be protected in the UK by asserting a claim of passing off. The claimant has to show, amongst other things, that it has a reputation in the name. Evidence such as marketing, advertising and/or turnover figures are important, so accurate records should be kept. Records of logo development and changes to the style of the trade mark can also be useful supporting evidence.
If your mark is unregistered you may put third parties on notice of a potential trade mark registration, or simply the fact that you consider yourself to have unregistered proprietary rights in the mark by placing ‘TM’ next to it. You can indicate that a trade mark is registered by printing ® beside it. It is an offence to mark an unregistered trade mark with ®.
Some other general points:
- Use a trade mark as much as possible to develop a reputation. Always use the same colours, font, design and mark, as variation can make it harder to claim infringement;
- Oppose applications for trade marks that are identical or similar to your own. Watch Services provide regular updates on applications. They are inexpensive so worth con-sideration; and
- As with all other IP, record the date the name or logo was created, who created it, and when it was first used. If it is registered, record the renewal dates so you can budget for renewals.
Domain Names
Much of the advice and comments about trade marks applies to domain names. Before deciding on a trading name check that equivalent domain names are available for registration, as they are another means of increasing your exposure and reputation.
The person or business that registers a domain name owns it unless there is evidence to the contrary. Registrations made in ‘bad faith’ can be reversed where the purpose of the registration was to extract payment from a business legitimately using a similar or identical name. Such registrations can be overturned and the domain names transferred to the business that successfully claims a right to them.
The best way to protect a domain name is to use it. Even if it is not your main domain name, have it pointing at your server to direct traffic to your website. SA Law owns salaw.com, salaw.co.uk and salaw.eu. salaw.com is the domain name published on all marketing materials; the others direct people to the website.
Registering as many domain names as possible prevents third parties from using them either to divert traffic from your website or to post negative reports on the internet. If, when you apply to register a domain name you find that someone has already registered it, consider your use of the trade mark to date and how the domain name is being used by the registrant. It may be possible to retrieve it. SA Law retrieved salaw.com from a third party. Alternatively, you could use a service to monitor domain names that contain your trade mark, and perhaps register them when they come available.
Patents
A patent is a monopoly right given to an inventor in specified territories. Patent protection is available for new products or methods which have an industrial application. Patents can be obtained for inventions such as chemical compounds, products, or discrete elements of a product, such as an electrical connection.
The owner of the patent is generally the person who invented the subject of it and obtained its grant. If the invention arises through employment, however, the employer owns the patent, if he applies for it. The inventor will be identified on the application and the published details of the patent. Employers may have joint ownership arrangements with employees, or allow them an interest in the patent to encourage innovation.
You can protect an invention in two ways: confidentiality or patent protection. Either way, it is important to keep the details of the invention secret. If the information becomes public knowledge before the patent application is filed it will lose its novelty, which is a fundamental requirement of a patent. Furthermore, someone else could make a patent application and obtain the monopoly.
If you want to obtain patent protection, file an application as soon as possible. The process is specialised, and best carried out by a qualified patent attorney. They are obliged to offer new clients a free consultation, so you should feel confident in making enquiries.
When a patent is granted the details are published. Sufficient detail should be available in the application to enable someone skilled in the field to create it. Patent protection lasts for 20 years, so third parties are unable to manufacture and/or exploit the patent without licence during that period. However, if you do not want the details of the invention to be published, keep the central aspects of the invention confidential and disclose them only to those who need to know. This strategy can help to maintain a monopoly beyond the 20 years of a patent. This approach means that employment contracts must contain strict confidentiality clauses. Occasionally only one or two people will be privy to the key information, so consider what happens if one of them leaves.
When meeting third parties to discuss sale or licence of IP, request that they sign a non-disclosure or confidentiality agreement before providing information about the invention.
Know-how
Know-how is an underestimated IP, which is at the core of every business. It is the information that you and your employees gather from working. It may include your development process, routes to market, or marketing strategies. Know-how can even become a trade secret, for example the recipe for Coca Cola.
In broad terms, the business should own know-how if it has been created or developed by an employee who could only have developed that item whilst in the employment of the business.
As is the case with patents, if information is confidential, make sure that only employees who need to know it are exposed to it and confidentiality agreements are in place.
If your business has a special service or product, document each stage of the development process to capture it in its entirety. This provides clear records in the event of a dispute over creation and ownership of your IP; or when an employee leaves. Your employees hold substantial know-how in your business, make sure you keep talking to them! Often businesses overlook employees’ expertise, and miss opportunities to exploit IP. The process of recording development processes should become part of the daily routine. This can be as simple as recording clients’ contact details onto a database.
For more information contact Peter Goodman on 01727 798103 or at peter.goodman@salaw.com.
© SA Law LLP 2006
SA Law LLP is regulated by the Law Society. Every care is taken in the preparation of this article. However, no responsibility can be accepted to any person who acts on the basis of information contained in it. You are recommended to obtain specific advice in respect of individual cases.