Too often companies (especially start-ups) fail to consider intellectual property rights (“IPRs”) until it is too late. All businesses and especially those in a fast-moving sector like electronics, should add IPRs to their list of essential things to consider.
Properly considering IPRs early on can help to give a business a competitive advantage, safeguard its commercial interests and avoid headaches down the line.It therefore pays to have a sound grasp of the IPRs relevant to a business and an awareness of how to avoid common mistakes and pitfalls.
Benefits of considering IPRs early
The benefits of considering IPRs early on include:
• Helping to ensure the business owns or has the rights to exploit the IP assets needed within the business.
• Enabling the business to more effectively enforce its IPRs and stop others from stealing or copying the business’ IP assets, which may include: its name; the names of its products or brands; its inventions; the design or look of its products; as well as things written, made or produced by the business.
• Avoiding the penalties which can come with delays (e.g. being too slow to register a trade mark and then being prevented from using that mark in the future).
• Avoiding potentially lengthy and costly disputes (or re-branding / re-designing exercises) which may arise from the potential infringement of third party IPRs.
• Putting the business in a better position to attract investment by showing that it has taken the necessary steps to protect its IP assets.
What IPRs are relevant in the electronics sector?
IPRs generally fall into two categories: registered and unregistered.In general, registered IPRs must be applied for, while unregistered IPRs arise automatically.Examples of registered IPRs include:
• trade marks (which can protect business names, product names and logos);
• registered designs (which can protect the appearance of a product including, shape, packaging, patterns, colours, and decoration); and
• patents (which can protect new and inventive products and processes).
Examples of unregistered IPRs include:
• copyright (which can subsist in writing and literary works, art, photography, films, TV, music, web content, and sound recordings); and
• design right (which protects the shape of objects).
IPRs may also arise in relation to:
• domain names (which are registered and provide an exclusive right of use for a period of time);
• confidential information (which may allow a business to stop others from misusing its secret information);
• passing off (which may allow a business to stop others from misrepresenting that their goods or services are associated with the business when that is not true); and
• licences (which may give a business a right to do something which would otherwise require permission).
Certain of these IPRs which are most relevant to the electronics sector are discussed in further detail below.
Patents
Patents protect new technological developments – i.e. “inventions”.If granted, it will give the patent holder a monopoly on commercialisation of the invention protected by the patent for a period of up to twenty years.
Owning a patent will give a business the right to prevent others from making, using, importing or selling the invention protected by the patent without the patent holder’s consent.It may also allow a business to license the invention for others to make, use, import or sell the invention and thereby potentially provide an extra stream of revenue.
Patents are expensive and difficult to get, and only certain types of inventions can be patented.Therefore, careful consideration (and expert advice) is needed before applying for a patent, not least because a consequence of applying for a patent is that a description of the invention will be made available to the public.
Trade marks
Registered trade marks allow a business to protect its brand (and sub-brands).Once obtained, a registered trade mark would provide a business with the ability to take action against anyone who uses a sign identical to or confusingly similar to the registered trade mark without permission, including counterfeiters.
Designs
The shape of an object may be automatically protected in the UK by design right; however, it is easier to protect a design if it is registered.Once a design is registered, it allows a business to take legal action against infringement and copying in a more straightforward manner.
Registered designs have protected: mobile phones; digital cameras; remote controls; virtual reality headsets; various housings for data routers, data switches and networking interfaces; computer mice; joystick controllers; and mobile chargers.Even apps can have an element of design.
Copyright
Copyright can arise in, among other things, computer programs, software coding, databases, spreadsheets, screen displays, virtual reality environments, apps, content on websites or characters in games.
Copyright can allow the owner to prevent others from: copying the copyright work; distributing copies of it whether free of charge or for sale; renting or lending copies of the copyright work; showing or playing the work in public; making an adaption of the work; or putting it on the internet.
Trade secrets
A trade secret is a special right that can only protect certain types of information.Information is considered a trade secret if: it is a secret – i.e. not common knowledge amongst those working in that particular sector; has commercial value because it is secret; and has been subject to reasonable steps to keep it secret by the person lawfully in control of the information.
Steps a business can take to keep information secret include:
• Limiting access to such information and keeping a record of who has had access to said information;
• Implementing procedures to ensure the information is kept secret;
• Educating employees on the importance of the information and having them sign confidentiality agreements;
• Assigning a team who will be responsible for the protection of the secret information; and
• Having appropriate non-disclosure agreements in place if collaborating with third parties.
A trade secret will remain secret for as long as a business keeps it that way.Unfortunately, if insufficient steps are taken to protect the secret information and it becomes no longer secret, there may be little, if any, recourse.
IP ownership and licences
Central to the subject of IPRs is ownership.A business will want to ensure that it owns or has the right to use all the IP necessary to operate its business.It may also wish to ensure it owns any IP generated or commissioned by the business.Where owning the IP is not possible or practicable, a business will want to ensure it has any necessary licences.
In the UK the general default position is that an employer owns the IPRs in IP assets created by an employee during the normal course of employment.However, this presumption does not apply to contractors, and therefore any IP created by a contractor will need to be assigned to the business.
Tips
The reality for most businesses (and especially start-ups) is that resources are limited and IPR considerations may not be top of the to-do list.However, taking the time at the outset to consider IPRs can make all the difference in the long run.Below are some practical suggestions that a business can take in this regard:
• Consider the IPRs that may be relevant to your business.
• Seek advice early and devise an IP strategy. Consult IP counsel – through their understanding of your business they will be able to advise on developing an IP strategy that is tailored to your business’ needs.A clear strategy will mean funds can be used efficiently and allow planning for protecting other IPRs.
• Consider third party IPRs and risks of infringement. For example: performing trade mark searches may help reduce the risk of using or seeking to register a logo or sign that is identical or similar to a trade mark that has already been registered. Carrying out freedom to operate searches may help reduce the risk of infringing third party IPRs which may otherwise be infringed by the business.
• Maintain the confidentiality of valuable secret information. If collaborating with third parties, use a non-disclosure agreement.
• Consider IP ownership. Check that employment agreements do not contradict the general position in the UK that IP created by employees during the normal course of employment will be owned by the business. And, finally, check that appropriate contracts (which assign IP to the business) are in place with contractors.
If you need more details or legal advice about what action to take, then your best course of action is to contact an adviser or solicitor.
| (Below left) Myra Sae Heng is an Associate and (below right) Alex Morgan a Senior Associate at EIP, an international intellectual property law firm |
