The importance of intellectual property rights to business has certainly increased in the last 10 years. Even in industries where the importance of intellectual property rights has been widely recognised, such as the music industry, the issues are becoming more varied and complex.
What do businesses want to know? In our experience, they tend to ask how intellectual property rights are protected, what you as a business can do to increase that protection, and what you can do if someone breaches your rights. Answering these questions involves looking at four main areas: copyright, patent, trademark and design rights.
Copyright
Copyright is an intellectual property right which protects1:
- original literary, dramatic, musical or artistic works
- sound recordings, films or broadcasts
- the typographical arrangement of published editions.
Each of the above is broken down further. For example, 'literary work' includes tables, software programs and design materials for software and databases.
Copyright is the most common of the intellectual property rights. Almost all databases, reports, marketing literature and so on will attain some copyright protection.
Therefore, copyright is very important to any business in protecting its revenue streams (where you may be selling reports or other copyrighted materials), or to stay ahead of its rivals in a competitive market place.
For example, if you develop an innovative on-line service, you would want to prevent your competitors copying that service.
Copyright protection is automatic. It begins at the creation of the work and continues until 70 years after the death of the author. There are a number of exceptions to this time period:
- if the work is made available to the public (during the author's life) then the 70 years runs from the date it is first made available
- in the case of computer generated works (ie software, databases, etc) the duration of the protection is 50 years from creation
- for sound recordings, the duration of the protection is 50 years from creation.
As stated, copyright is an automatic right. However, while the creator (or employer where appropriate) does not need to take any action to protect a work in which copyright vests, consideration needs to be given as to how the creator can prove, not just authorship, but the date the work was created. Unfortunately, there is no longer a registry for copyrighted materials, and so the proverbial sealed envelope comes in. Send yourself a copy of the work so that you have a date stamp from the post office, and leave it sealed as proof of the date of creation.
While the sealed envelope is a good method in relation to copyright materials such as books, recordings and musical scores, it may not be the best method for recording the creation date of items such as software or databases.
Other methods may include placing software in an escrow account or lodging the works with a solicitor or accountant. Whichever method you use you must ensure that it will stand up to independent scrutiny.
If you have the ability to prove ownership of the intellectual property and the date upon which it was created, you will be in a strong position to enforce those rights against third parties. Enforcement of copyright, however, is not an easy journey.
In the first instance you need to discover that your copyright has actually been infringed. If you are a musician it may be easy to discover if someone has copied your work by listening to the radio. However, if the copyright is in a piece of software it is difficult to ascertain whether your code has been copied. In fact, the chances are that all software contains code which breaches copyright, since contractors and employees move from one job to the next and take code with them.
Once you have identified a potential breach of your copyright, you then need to prove that the third party had seen and copied your material in the creation of its own work. There is a defence that the work was created without any knowledge of the prior copyright.
Therefore, while copyright is a very important right it is also extremely difficult to enforce against a third party.
Patents
Patents are the most formalised of the intellectual property rights.
In the UK, patents may be granted for inventions which are new, involve an inventive step and are capable of industrial application.
Unlike copyright, there is a formal registration process, in which the Patent Office will examine the application, ensure it conforms with the basic requirements for a patent and that it does not infringe an existing patent. Following completion of that process, your application is then published by the Patent Office.
This enables any third party to challenge the application. If anybody does challenge the application, an objection process is invoked where both parties submit evidence and usually appear before the Commissioner for a decision.
It is imperative that you do not disclose the invention to the public prior to the application date. If you do, this will invalidate your application.
The patent application is, therefore, a very long and expensive process, but once the patent has been granted the ability to enforce it against third parties is far easier than enforcing a copyrighted work.
Patent protection lasts for a maximum of 20 years from the date of the application. The initial term is five years from the application date.
Thereafter yearly renewals are required to extend the period, subject to the payment of a renewal fee.
In order to enforce a patent you need to prove that the patent has been infringed and that you have incurred loss because of that infringement.
Ownership and date of creation do not need to be proved as they are already provided in the patent.
It is important to remember that a person may still challenge the validity of a patent after it has been granted, although the grounds are narrower than a pre-grant challenge. The common grounds for challenge include: the subject matter is unpatentable; inadequate disclosure, and unallowable amendment.
Trademarks
A trademark typically identifies a business or product to the market place. In that sense it is the intellectual property which the general public and others in your industry identify with. Essentially, a trademark is any sign which can be represented graphically and which is capable of distinguishing the origin of goods or services of one undertaking from those of other undertakings. It may consist of words (including personal names), designs, letters, numerals, or the shape of goods or their packaging.2
There are two forms of trademark - registered and unregistered. The unregistered trademark is formed through use of the mark over a period of time. The registered trademark has a registration process. However, this differs from that for patents. Any application made to the Patent Office must request registration, state the name and address of the applicant, state the goods or services to be covered, and set out a representation (or description) of the mark. You do not have to have used the trademark before applying to have it registered.
Any application made in bad faith, such as an application where it is shown that there is no bona fide intention to use the mark, will be rejected.
This provision also prevents pre-emptive bids seeking to stockpile or misappropriate marks.
Where independent parties seek the same or similar marks, the priority of applications will depend on the filing date. The filing date will be given once the application is complete, and it will then depend on who has the earliest filing date.
The date of registration will be the filing date and will last for 10 years. It will then be renewable at 10 yearly intervals, and will remain valid unless it becomes liable to revocation, for example for non use.
The mark may be altered while the registration continues, but such amendments are strictly limited
The considerations relating to enforcement of registered trademarks are the same as those described for patents. In order to enforce a trademark there is a need to prove that the mark has been infringed and that loss has been incurred because of that infringement. To enforce an unregistered trademark, however, you would need to rely on an action of passing off - the infringer is using the trademark to confuse the market place into believing it is dealing with the trademark owner.
While someone may still challenge the validity of a trademark after it has been registered, the grounds are narrower than a pre-registration challenge. There are two major grounds - non use3, or that the trademark has become misleading or descriptive. A revocation order will operate from the date of the application for revocation, or the date on which the ground relied upon existed - whichever is the earlier. Where proceedings for revocation succeed, the registration will be deemed never to have existed.
Design rights
Design rights are similar to copyright. However, the registration process is different. A 'design' is defined as: 'features of shape, configuration, pattern or ornament applied to an article by an industrial process, being features which in the finished article appeal to and are judged by the eye...'4 In order to be registerable, designs must be new.
Registration must be for a specified article, and can be expensive where registration is sought for a considerable range of goods. Once accepted, the design is registered and made public. Although the protection is for the item as a whole and not for any specific parts, the applicant will often be asked to prepare a statement of novelty, drawing attention to the features which form the essential part of the designer's idea. The term of a registered design is taken from the date of the application, and has a duration of five periods each of five years, making a maximum of 25 years.
General issues
One of the main issues around intellectual property, is who has the right to ownership. Intellectual property rights in general vest in the author.
However, in the UK, where the author is an employee and the intellectual property right is created in the course of his or her work, the intellectual property rights will vest in the employer. It is seen as good practice to have a provision in employment contracts specifically setting this out.
A more important area to protect is where contractors are creating intellectual property. Unless there is an express provision to the contrary, it is likely that the intellectual property rights will vest with the contractor.
A good rule of thumb is that the best method of protecting your rights is to keep intellectual property confidential, and only disclose it on the back of contractual obligations. These will give you clearer rights of action than those provided for by law.
The European Parliament is reviewing intellectual property rights in an attempt to harmonise the enforcement of such rights throughout the EU. The proposed directive will require member states to set penalties for infringement of intellectual property, together with specific legislation to clarify the enforcement process. It is expected that the new legislation will allow greater access to establish infringement in the first instance and reduce the burden of proof necessary. However, at present we only have a proposed directive. Protection meanwhile relies on getting expert advice, planning your remedies for redress carefully and above all 'keeping it confidential'.
1 Copyright, Designs and Patents Act 1988 s1 (as amended)
2 Trade Marks Act 1994 section 1.
3 Failure to use the mark in the UK in relation to the specified goods or services a) in the 5 years from completion of registration, or b) any later uninterrupted period of five years.
4 RDA 1949, section 1(3)
Richard Lane is an associate of Hugh James Solicitors, Tel: 02920 224871, E-mail: richard.lane@hughjames.com
