Intellectual property (IP) is an often forgotten business asset. When we think of ”assets”, we all think about plant and equipment, real estate and other fixtures and fittings. However as business owners we rarely think about intellectual property. We are quick to ensure that we protect our tangible assets, but what actions do we take to protect our intellectual property?
Copyright is an automatic right in Australia. This means that provided the work falls under the operation of copyright legislation, it is automatically protected under Australian copyright law. There is no need to register. Copyright protects ”original expressions of ideas” however does not protect the idea itself. As a result, it does not protect against independent creation of similar work.
Copyright is often used to protect literary works, musical work, dramatic work, or artistic works of a material form. As such, common business assets that are protected by copyright include booklets, letters and other printed material whether digital or physical provided that they meet some additional requirements.
The duration of copyright for most types of works is life of the author plus 70 years. During which time the owner of the copyright is free to sell or licence their rights to other parties. This is a common business practice for artists, musicians, free lance writers and many other businesses that deal in copyrighted material. Importantly, the sale or licencing of copyright does not mean the owner of the copyright gives up their moral rights automatically.
Trade marks allow for the exclusive right to use, license and sell a sign that distinguishes a business from competitors. A ”sign” includes elements such as letters, words, shapes, colours, labels and aspects of packaging or a combination of any of these elements. Unlike copyright, trade marks are required to be registered to gain protection. There are associated costs including legal fees for drafting an application, filing fees and sometimes lengthy wait times for registration with a minimum of 7 months.
So why go through all this trouble? Your trade mark can be your most valuable marketing tool, your identity and a way to show customers who you are. Registering a trade mark makes it easier to take legal action to prevent others from using your mark.
Once registered, trade marks are valid for 10 years from the filing date and can be renewed at an additional cost. While registered, the mark may carry an ® symbol that puts other parties on notice that your mark is registered.
Often businesses have knowledge that they want to protect. However, they do not wish to disclose information to the public which is otherwise required to obtain protection through a patent or other registerable protections. Information often desired to be protected includes formulas, business systems or products.
In order to protect trade secrets businesses will often require certain employees to sign a non-disclosure agreement to prevent the use or disclosure of such information. In addition, confidentiality clauses and restraint of trade clauses may also be written into employment contracts (discussed further below). Furthermore, businesses may turn to common law breach of confidence in the event that confidential information that was obtained in circumstances that imparted an obligation of confidence, is disclosed or used without consent.
Importantly, you cannot prevent a competitor from independently creating the same product and/or process and using it or selling it commercially if your business relies on trade secret to protect your IP.
Employee restraint of trade
Employees are often in control of information that a business derives success from. As such, there is an ability to restrain employees from divulging trade secrets or putting them to their own use. However, any such restraint must be drafted carefully not to over extend as the individual retains the right to have the ability to earn a living. The court seeks to balance both the business’s interest and the individual’s interest. The scope of positions, scope of competitor, the area in which the restraint applies as well as the length of time for which it applies are all relevant in determining whether a restraint is lawful.
Protecting your business’s intellectual property protects your business’s future. This article has described some of the most common ways in which your business can seek to protect its IP. A comprehensive intellectual property strategy that assesses the applicability, advantages and disadvantages of each method of IP protection is the best way to ensure that all factors have been considered and your business is in the best position moving forward.
If you would like to learn more about how you can protect your business’s intellectual property, please feel free to contact a member of our commercial law team on 5434 6666 or 5472 1588.