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How Can I Protect My Intellectual Property as a Start-Up Business?

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Written by Theresa Grech, Partner and Head of Corporate, and Karina James-Wiltshire, Corporate Legal Executive at Ince.

Intellectual Property (IP) concerns the rights associated with creative effort or commercial reputation and goodwill.  The subject matter of IP can therefore be very wide and includes literary and artistic works, films, computer programs, inventions, designs and also the trade names used by businesses for their goods and services.

As a new business owner, it is important to ensure that your IP is protected from the outset as the IP owned or created by a business is a valuable asset. Like other items of property, IP can be commercialised  in a number of ways, for example, an owner can assign the IP rights to a third party in return for a one-off payment, or  the owner could permit others to use the IP  by granting a licence in return for royalty payments.

Protect your IP through registration if necessary

In essence, protecting your IP makes it easier to take legal action against anyone who steals or copies it.

There is a distinction to be drawn between the various IP rights as some protection is only afforded on the completion of certain formalities for registration of the relevant IP right whilst IP protection for some other IP rights is automatically granted.

Trade marks

The words ‘trade marks’ or ‘brands’ refer to a sign which distinguishes goods or services of one trader from those of another trader. The sign could be a word or phrase, logo, picture, shape, sound or smell. The main function of a trade mark is to enable customers to recognise the goods or services as originating from a particular trader.

You can register a trade mark to protect your brand. Registration of a trade mark gives you an exclusive right to use that mark; if someone did want to use your mark they would need to get your consent. Once granted, registered trade marks must be renewed every 10 years. If a dispute arises over your mark and it is not registered, then you would have to rely on a claim for ‘passing off’ which can prove more complex and costly.

Copyright

Examples of work having the protection of copyright include: writing and literary works; art and photography; films and TV; music and sound recordings and web content.

Copyright is an automatic protection – it arises on creation of the work and allows you to protect your material and to stop others from reproducing it without your permission. The period of protection will vary depending on the nature of the work but most often it is the life of the author plus 70 years from the end of the calendar year of his death.

Patents

Patents protect ‘inventions’ – it gives you the right to take legal action against anyone who makes or uses your invention without your permission.  In order to register a patent, the invention must be new, involve an inventive step and be capable of industrial application. You will need to apply to the UK Intellectual Property Office (IPO) to gain protection in the UK as patent protection is not automatic right. A patent attorney can help you obtain registration. If granted, the patent will last for 20 years from the date of filing. It is vital patent applications are made as soon as possible. If they are in the public domain, before the application is filed, you will be unable to gain patent protection.

Designs

There are two types of protection for designs in law:

  • Registered design rights – this gives you a legally enforceable right to use your design. Design registration protects the appearance or look of a product providing it is new and has individual character; and
  • Unregistered design rights – this is an automatic right which gives protection similar to copyright to purely functional designs. There are different types of unregistered design and how long you are protected depends on the type of design.

Protect your IP in your contracts

All relevant employees and contractors should have IP and confidentiality clauses in their employment contracts or contract for services.

  • Employees – generally speaking, IP created by an employee is owned by the employer. If intellectual property is created by an employee outside the course of their employment, the employer may not have rights to it. It is prudent therefore to always make it clear that the IP created by an employee will belong to the employer.
  • Consultants – the use of outside consultants should be looked at carefully. A consultant will usually own the intellectual property rights in the works which it creates for a business and this is the case irrespective of whether you have paid the consultant for the work. An express provision governing ownership and use of those rights to be created by the consultant should be included in any contract with the consultant before any work is created.

Also, ensure that contracts are put in place to establish ownership of IP in joint projects such as joint ventures and R&D arrangements.  This can be crucial to ensure that each party protects IP which they bring to the venture and also to clarify which party will own any IP developed in the future as part of the venture.

Protect your IP by keeping a record

The development of any product should be documented and kept safe. All documents should be dated to record when the product was developed.

Protect your IP by keeping it confidential

Any product which a company develops should be kept confidential prior to any disclosure. All confidential documents should be marked confidential to ensure that all parties are aware of their confidential nature. The disclosure of confidential information should be protected with a Non-Disclosure Agreement (NDA) or a confidentiality agreement.

Are you starting a new business?

To help new businesses in these uncertain times, we have prepared a free start-up pack. The resource pack contains useful guidance highlighting the key actions to undertake and issues to consider so that your new business has the correct legal framework and protection from the outset – and ensuring your start-up business has every chance of success.

To download our free legal start-up pack, please complete your details here.

Want more information and advice?

For more information and advice on legal considerations for start-ups, get in touch with a member of our team below:

Theresa Grech, Partner and Head of Corporate, at [email protected]

Matthew Hiscox, Director of Trade Marks, at [email protected]

Karina James-Wiltshire, Corporate Legal Executive, at [email protected]

The information above is not and should not be taken to be legal advice. You should not take action or omit to take action based on this information.