Insurance · 5 December 2016

Intellectual property – How to protect the hidden assets in your business

Intellectual property
Copyright protection rises automatically, so there is no need to register anything

For the first in a new series on intellectual property, Grid Law founder David Walker considers the different ways in which you can legally protect your ideas as a small business owner.

The concept of intellectual property has always fascinated me. So helping clients build a profitable business around their intellectual property rights is one of the most rewarding parts of my job as a solicitor.

When a client comes to me with their ideas for a new business, product or service, they’re full of questions. They want to know what rights they have, how to protect their ideas, and what to do if someone steals them.

I’m going to answer these questions, and more, in this series of articles.

My clients usually have a good idea of how their business is going to make money, but very often their intellectual property rights can make more money in ways they hadn’t even thought of. This is where my experience comes in.

Having been through this process so many times, I often have suggestions to share that can make their business more efficient and more profitable, simply through the strategic use of these intellectual property rights.

Let’s start with a situation many people have found themselves in.

You have an idea for a new product – and I’m talking about a physical product here rather than a digital product – and are immediately faced with a dilemma. On the one hand, you can’t wait to build a prototype, start testing it and then get it on sale. But on the other, you’re concerned that someone else may steal your idea and beat you to market.

So what do you do?

Firstly, don’t tell anyone about your idea unless they are legally obliged to keep it a secret. You can speak to a solicitor, like me, as we have a professional duty to keep client affairs confidential, but for anyone else, make sure they sign a confidentiality agreement first.

Then, you need to know what protection might be available for your product.

Patents

If your product has new technical features, you may be able to protect them with a patent. Patents protect how things work – they don’t protect the aesthetics of how the design looks.

To qualify for patent protection, your product must fulfil three criteria:

  1. It must be new and have never been disclosed to the public (which is why you must keep it a secret until you have protection in place).
  2. It must involve an inventive step, i.e. your invention must take the technology a step forward and not be an obvious development of some existing technology.
  3. It must be capable of industrial application. This means you must be able to turn it into a product you can sell.

If you can register a patent, it will protect your product for up to 25 years.

Sometimes, you will want to protect how your product looks, rather than the technology of how it works (sometimes you will want to do both). So, to protect the appearance of your product (or even just part of it) you use design rights.

A registered design gives you, the owner, the exclusive right to the design and the power to stop other people making copies of your product without permission. As with patents, not all designs can be registered and the protection lasts for up to 25 years.

To be registerable, a design must be:

  1. original (i.e., not a common design)
  2. have individual character
  3. not be specifically excluded from protection

For example, a registered design does not protect the surface design of a product (that would be protected by copyright), and the design must not be dictated by the way the parts of the product fit together.

Registered designs are much cheaper to obtain than patents, so for many small businesses this is their best option for protecting their products.

Knowing this in advance can influence some of your design decisions. Rather than being purely functional, you can design your product to have an aesthetic quality that will enable you to register the design and therefore protect it.

Clearly, patents and design rights are going to be more relevant to product based businesses, but there are other intellectual property rights that are relevant to both product and service businesses.

Copyright protection

When people talk about copyright they often think about art, music or literature because all of these are automatically protected if they are your own original work. But the range of protection copyright gives is actually much broader than that.

Take, for example, a training company. All of their training materials would be classed as literary works so they are protected by copyright laws. If the company hosted a seminar or workshop and filmed it, they would also own the copyright in the production.

A company which creates products will own the copyright in the plans and technical drawings used to produce them and their surface decoration. Copyright also protects computer code, blogs and social media posts.

As you can see, it would be very rare to find a company which owned no copyright materials at all.

Copyright protection, as we have said, arises automatically, so there is no need to register anything. However, it does not create a monopoly or give you the exclusivity that comes with a patent or registered design (or for that matter trademarks which we will discuss next).

This means that if someone else had the same idea as you, but independently produced for example training materials or software that achieved the same result as your product or service, you would not be able to stop them unless you had proof that they had copied you.

Trademarks

Finally, I want to talk about trademarks, a form of intellectual property that all businesses will come across. Trade marks protect brands, and most people will just think about protecting business names and logos. However, you can gain much greater protection for you brand than just this.

Trade marks protect anything which distinguishes your products and services from those of your competitors, so you could trade mark packaging, like the shape of the Coca Cola bottle, or colours, such as green for BP filing stations.

Even smells and sounds can be trademarked so long as you can represent them graphically, which is a requirement of registering a trade mark.

They can last for ever if you continue to re-register them every ten years, but this can also be a disadvantage. Once registered, a trade mark is set in stone so if, for example, you rebrand and update your logo, you can’t amend your trade mark. You have to register a new one and this can be quite costly.

Once you have identified what intellectual property rights you have to protect your products, services and business you need to think about the different ways to make money from them. That is what we’re going to look at in the next article in this series.

In the meantime, if you have any questions about the intellectual property rights you may have, or how to protect them, get in touch at editors@businessadvice.co.uk.

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ABOUT THE EXPERT

David Walker is the founder of Grid Law, a firm which first targeted the motorsport industry – advising on sponsorship deals, new contracts and building of personal brands. He has now expanded his remit to include entrepreneurs, aiding with contract law, dispute resolution and protecting and defending intellectual property rights.

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