How to value your IP- Part 2
Following on from the previous update on valuing your Intellectual Property (IP), this update focuses on the more operational side of how to protect IP.
As we said in part 1, integral to all the different forms of IP, is ownership. In every case it is important to establish the owner of the ‘rights’, be this a company, individual, competitor, supplier, customer etc.
In general, for patent and registered designs, the benefits of registering or recording your IP is to be in a position to take action against a competitor should they try to make a product, stock it, offer it for sale, use it or import it, without your consent.
For trademarks, the registered protection could enable you to stop a competitor using the same or similar mark for products or services that might be the same or similar to yours.
What follows are some general areas and then issues to be aware of – please remember though that for any specific advice, you should always take proper advice from us.
New product names and logos
The primary rule here is not to enter a new market with a new brand, product name, logo, without having checked the infringement risks.
Other third parties (including potentially competitors) may have either unregistered or registered trade mark rights. These rights can be enforced against you if the alleged infringing mark is identical or similar to the registered mark where the public might be confused on the origin of the products or services i.e. they mistook your products for those of your competitors.
Always consider a trade mark search before going to market and consider whether your new mark is unique enough and free to use. If not, you may need to consider selecting a completely different mark or logo to minimise trade mark infringement risks.
Remember that a trade mark application (unlike patents), does not need to be filed before going to market. Any application can be filed months or years after you have traded with your new mark. As we have already mentioned, assessing the risks of an infringement of existing trademarks needs both thought and assessment before you commercialise your new name or logo.
A useful practical tip here can be choosing a mark or logo that is very different to the products or services that you will be commercialising, this can be a good starting point to both minimise risks and potentially obtain registered rights.
Monitoring your marketplace and being aware of any IP portfolios of your main competitors can also be helpful here. This could give you an indication as to how IP-sophisticated their approach is to innovation, patent protection and potentially enforcement.
If you have already been successful in building an IP portfolio, you should monitor the activities of your main competitors to make sure you draw maximum benefit from your IP investment. Because it is possible to backdate damages for IP infringement, policing does not necessarily need to be an onerous task and regular background checks can be put in place to monitor your competitors.
Promotions and marketing material
The main form of IP used and considered here is of course, copyright. This is an unregistered right that exists in the literary (written work), photographs, pictures, music etc associated and/or presented via marketing material, websites, exhibitions etc.
There are different rules for different media, but a general starting point, copying existing text, photographs, pictures etc from the internet and using these in your website would carry a significant copyright infringement risk.
The usual assessment would be to check to see if a ‘substantial’ amount of the original copyright work has been copied/reproduced. If this is proven, then you would be exposed for damages.
Fundamentally, the best protection here is to always look to try and create original works or obtain a licence for use of existing text, photographs, pictures etc.
Remember that copyright exists as an unregistered form of IP protection, meaning that you cannot check text, pictures etc against an official register.
To try and minimise the risks, a good starting point is to assume that any text, pictures etc are protected and that these existing works are not to be copied.
For any new product designed which has a real aesthetic appeal, design protection is important. This area was traditionally important for certain industry sectors such as clothing, footwear, handheld devices, automotive etc, but more recently, web pages and displays/interfaces are increasingly being protected by registered designs too.
For any new visually appealing product, the starting point before launch is to check to see if there are any existing registered and unregistered designs that could pose an infringement risk.
There are many types of patent and design search including freedom to operate (FTO) or clearance, landscape, patentability etc. It would always be recommended to take advice on the best course of action and cost implications. For example, if your objective is to build an IP portfolio, an initial search could be focussed on this. Alternatively, if your primary aim is to minimise infringing competitor’s rights, the search could be focussed differently.
For a new product with an attractive external appearance, a further consideration could include filing a registered design application in those countries where it would be commercialised.
This process is generally much cheaper and much more straightforward (with registered rights obtained in weeks or a few months), than a patent. However, remember that any registered design protection is limited to the visual similarity of an alleged infringing product only, compared to your design registration.
If a third party’s product looks visually dissimilar but functions and performs almost identically to your innovation, then you may still need to consider a patent application too. Importantly for patents, in most countries, the new product/process must be kept confidential until the patent application is filed. Once filed, you would then be able to commercialise (having already checked the patent and registered design infringement risks, as above). If you are successful with securing a patent for a new product, any competitor found to infringe can be liable for damages accumulated over many years of commercial activity. Please note though that patent infringement actions are rare and are generally settled out of court usually involving a one-off payment and/or an ongoing revenue via a licence. Licencing a patented or design protected commodity can generate a significant revenue where demand is high and you do not have capacity to satisfy all of it.
Also, if your new product is almost exclusively functional or is not visible in normal use (for example is an internal component for a larger unit), then a registered design may be not be needed or might be ineffective, even if sought.
In the absence of this though, registered design protection provides a useful IP tool in your portfolio to try and prevent copycat designs.
The benefits of collaborations with customers, consultants or other third-parties during the various stages of bringing a product or service to market can be significant. We think it is vital to have collaboration agreements agreed and signed off that would look to include IP clauses (including ideally a clause that all rights to the developments are owned by you and that a third-party collaborator accepts no ownership and has agreed to assign all rights to you).
If you don’t document formally any collaborations, this can end up with third parties potentially owning future patents and designs with these rights being exploited independently and possibly used against you.
It is really important to understand the role of non-disclosure agreements (NDAs) in starting to explore the possibility of a collaboration for development of a new product, process or service.
However, a possible alternative may be to file an initial patent and/or registered design application before contacting a third-party. This puts the stick in the sand in terms of your rights at the initial stage and helps to mitigate the risks of a third-party not upholding their part of any future collaboration agreement.
This is a very general guide – please get in touch if you need any of this expanding or want any specific advice to your circumstances.
The fundamental point to take away from the above though is that without protecting a new product/process, you effectively gift all the development work to your competitors who may be able to reverse engineer and undercut your offering.
We offer bespoke advice and support both for existing IP and around IP considerations when setting up or buying any business, licensing and assigning IP, protecting IP as part of commercial contracts or thinking about any collaboration or joint venture.
Please drop me an e mail or call if you need any further details.
Stay safe and well.