Intellectual property is often the most valuable asset of a business. If, on the sale of a business, the intellectual property is not appropriately protected:
- the sale price may be adversely affected, or
- the process may be more difficult, time consuming and costly.
What is intellectual property?
The expressions “industrial property” and “intellectual property” describe the rights giving protection to creative and intellectual effort. They include copyright, designs, patents, trade marks, circuit layouts, plant varieties and confidential information.
Trade Marks
A trade mark can be a phrase, word, number, letter, smell, sound, shape, picture, logo, aspect of packaging or a combination of these used to distinguish your goods and services from those of other traders.
The registration of trade marks and infringement of registered trade marks is governed by the Trade Marks Act 1995 (Cth). Registration of a trade mark provides the legal right to use, license or sell the mark within Australia for the goods and services for which it is registered.
Registration of a business name or company name does not in itself give you any proprietary rights – only a registered trade mark can give you that kind of protection. The owner of a registered trade mark can sue the owner of a business or company name for infringing the trade mark if they use it to describe similar goods or services to those covered by the trade mark registration.
When your trade mark is registered, you can bring an infringement action under the Act for a breach of your registered mark. On registration, you gain the right to:
- exclusively use or authorise another person to use the mark within Australia in relation to goods or services specified in the registration;
- sell the trade mark as personal property; and
- notify the Australian Border Force of your objection to the importation of goods that infringe your rights in the trade marks.
To be registrable, a trade mark must be distinctive: it must be capable of distinguishing specified goods or services from those of other traders in the market.
The initial registration period is 10 years and registration may be renewed indefinitely for 10 year periods.
Trade mark registration typically takes from eight to eighteen months.
Copyright
Copyright law was formulated to protect literary endeavour and now encompasses all manner of productions, from computer programs to films. The law of copyright is governed by the Copyright Act 1968 (Cth). Australia has no system of registration for copyright protection.
Copyright is legal protection for people who express ideas and information in forms such as writing, visual images, music and film.
Copyright does not protect an idea or information itself – only the form of its expression. Copyright protection is free and automatic. A work need not be published or bear a copyright notice for it to be covered by copyright. However, it can not simply be copied from another work – it must be the result of its creator’s skill and effort.
As copyright protects the “creator” of the work, issues regarding the true ownership of copyright and legal authority to use the work can arise when a business outsources creative functions to third parties. It is important to deal with these issues before engaging a contractor to undertake work for your business.
The general rule is that copyright lasts for the life of the creator plus 70 years (or in some cases for 70 years from the date of first publication).
Patents
The Patents Act 1990 (Cth) regulates rights in relation to patents and patent owners (“patentees”). It gives a patentee a monopoly for inventions which are novel and not “obvious”. A patentee’s monopoly right prevents others from selling, using, making or otherwise exploiting an invention, for the duration of the patent. A patent must be registered in each country in which protection is sought.
To be patentable, an invention must meet criteria set out in the Act. The invention must be novel and must relate to a field of commercial endeavour.
Patentable inventions include devices and industrial or technical methods or processes. However, not all inventive concepts lead to patentable inventions.
To fulfil the requirement of being “new” or “novel”, the invention must not have been published or used by anyone anywhere in the world before the “priority date” of the patent application. The confidentiality of information about an invention is important to a successful patent application.
In Australia the two types of patent protection are a standard patent and an innovation patent. Both require the invention to be novel, but an innovation patent has a lower threshold of inventiveness, provides a lower level of protection and has a shorter term (8 years) than a standard patent (20 years).
Designs
In the context of intellectual property, “design” relates to the artistic element in or overall appearance of a manufactured product.
In Australia, the Designs Act 2003 (Cth) provides a system for the registration of designs. Registering a design initially protects a newly created appearance for an article or product from being copied by competitors for up to 10 years.
Registration of a design gives the owner protection for the visual appearance of the product but not its feel, what it is made from, or how it works.
To be registrable, a design must be new and distinctive. A design is generally distinctive unless it is substantially similar in overall appearance to other designs already in the public domain. Infringement of a registered design occurs when someone uses a design which is substantially similar in overall impression to the registered design.
Confidential Information
“Confidentiality” and “trade secrets” refer to both a type of intellectual property and a strategy to protect intellectual property. Confidential information may be anything from a concept or business idea to a formula or plan to make something. As this type of confidential information may be difficult to protect under laws relating to other forms of intellectual property such as trade marks or copyright, a Confidentiality Deed may be an appropriate form of protection for confidential information.
For information to be protected under a Confidentiality Deed:-
- it cannot be information known to the public already;
- it must be a product of the mind that confers a confidential nature on that information; and
- it must be provided in circumstances of confidentiality.
A Confidentiality Deed is an agreement between parties (companies, individuals, or both) to keep specified information confidential. One party may disclose confidential information to another, or both parties may exchange information.
Domain Names
Of increasing importance is that your business has all relevant domain names registered with the relevant organisations.
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Contact us for free no obligation initial telephone advice regarding intellectual property.
