Tag Archives: Intellectual Property

Copyright in a Logo, Informal Contracts, and Innocent Smoothies

Copyright In A Logo, Innocent Smoothies, And Informal Contracts

Copyright in a Logo, Informal Contracts, and Innocent SmoothiesThe trouble with disregarding formalities, like legal agreements, is that even minor disagreements have the propensity to escalate into disputes.

An imperfect recollection of the terms of a contract is unlikely to escalate if the contentious point is answered when you consult the written agreement. However, where there is no concrete agreement in place, it is much more likely that issues turn into major disputes, leading to mess and expense. And sometimes where there is an unsigned document discussed by the parties, the court is likely to regard those terms as binding between them.

This is what happened in a case involving Fresh Trading Company (Innocent) and Deepend who had acquired the rights to the ‘Dude’ logo (the well-known Innocent halo logo) from the designers. The dispute resulted in a hotly contested series of cases around ownership of copyright.

In 2009, Deepend initiated proceedings with OHIM on the grounds that Fresh did not have the right to use the logo and that Deepend did because of the assignment of copyright to them of the Dude logo after the design company that created the brand in 1999 dissolved.

In 2012, OHIM agreed with Deepend. Fresh appealed the decision.

Background

At the time the logo was designed, Innocent was a fledgling company who had started a business relationship with the designers. Their brief was to “develop the ‘visual identity for the product’.” Although the designers never received payment for their design work, a recent High Court decision ruled in favour of Fresh finding that the parties had been acting under the unsigned Heads of Agreement. These not only assigned the full intellectual property of any work approved by Fresh to Fresh, but also had provisions for remuneration for Deepend.

The reason the judge found in favour of Innocent was that the Heads of Agreement included a provision that required Deepend to transfer copyright to Fresh. There was an obligation on Fresh to allot shares to Deepend. However, the judge found that neither of these requirements were expressed as a conditional obligation.

He used a flipped example to make his point, saying that the obligations to allot shares could theoretically arise even if there was no transfer of copyright to Fresh. The judge also made the additional point that at the time Deepend didn’t really deal with the matter of lack of shares and this must have been a result of the perception that a shareholding in Fresh wasn’t of very much value. This therefore negates the assertion that Fresh “refused to pay.”

So when you add this together with the fact that the judge didn’t consider the remuneration in the form of shares to be a precondition for the assignment of copyright clause then it becomes easy to see how he was able to justify his conclusion that on equitable principles, copyright should vest in Fresh. This followed the approach in Griggs where the logo design created was not formally assigned by the designer, however an implied contract was found to have existed nonetheless.

Conclusion

This decision, more than anything, highlights the importance of explicitly stating within a contract that IP rights are conditional on remuneration.

Another important lesson that can be learnt is to explicitly agree on copyright ownership from the outset in order to avoid costly litigation further down the line. This case also underlines the continued availability of remedies in equity.

The fact that the courts are sometimes willing to interpret the details included in an unsigned agreement to achieve a just result should be a warning to ensure the finalisation and signing of your official paperwork.

Before you tweet that picture

Is Posting Photos On Twitter A Breach Of Chef’s IP?

Before you tweet that pictureThis is the first of a series of blogs in which I look at intellectual property issues in different sectors. I will be considering the extent to which IP protections such as patents, copyright, trademarks, designs, and know how protect business models.

This week the spotlight is on the IP issues that arise for chefs, and the visual aspect of their creations, that is, plating. In part 2, I will focus on recipes, and the protection of foods.

Plating

The widespread habit of posting pictures of foods we eat in restaurants on social media (so-called “food porn”) has led to a number of comments by chefs complaining about damage to their intellectual property.

For example, FranceTvInfo reported that French chef Gilles Goujon felt deprived of his “intellectual property” as a result of the practice. And in an article in the Eater in 2012 where several chefs of different origins were interviewed, a US chef expressed the view that photographs of his food without his consent involved the “taking of intellectual property” of the restaurant.

The reasons behind the objections to the practice range from breach of etiquette due to the disruption of the ambiance, to the irritation and annoyance caused to other diners. Mainly the chefs object to the poor quality pictures which they feel create a negative impression of their food creations.

So what is this all about and is there an IP problem?

Before it became so easy for anyone with a smartphone to take a picture of a meal, the way we experienced the food of a restaurant was to visit the place to eat the food. So, this is a problem that digitisation has brought about for restaurants and chefs.

A point to bear in mind is that people commonly refer to their “intellectual property” using the words in a loose sense to mean their ideas and creations. They do not necessarily mean to refer to intellectual property rights in the strict legal sense of the words.

However, let’s see whether there is a legal IP problem.

This involves first considering how the dishes are protected under copyright or design law. If there are IP rights, the next question is whether these rights are infringed by the taking and posting of photos on social media.

Copyright in plated dishes

In the UK, and US there is no protection in copyright for a plated dish because the law requires that a work be “fixed” in a more permanent form to enjoy copyright protection. Other possible forms of protection, such as artistic craftsmanship in the UK are unlikely to apply given that the purpose of a plate of food is for the customer’s consumption.

In Europe where there is no “fixation” requirement, the appearance of a dish could be protected by copyright.  And high-end cuisine plates might well meet another of the legal pre-conditions for copyright protection – namely, that they be original.

However, even if the fixation problem mentioned earlier could be overcome, arguing that there is infringement in taking a photograph would be difficult as there would likely be fair use and fair dealing defences. In other words, you might argue that you took the photos for the purposes of doing a restaurant review.

Design protection

There is no design right protection in the UK for a plate of food because unregistered design rights protect the shape and configuration of products rather than their surface decorations.  Surface decorations would be protected under copyright law, which as mentioned above, does not help in protecting the layout of food on a plate in the UK and US.

In any event, design right is only infringed if someone were to make a product to the design (that is, the recipe). Simply taking a photo of the outcome of that recipe (that is, the designed product) would not be an infringement.

Registered design

Registering the design of a plate of food is possible under EU law.  Different types of design are classified for registration under what is known as the Locarno classification, and foodstuffs are expressly allowed for within Locarno Class 1.

However, unlike the large food manufacturers who protect their IP with registrations, (for example the design of spam slices is protected by EU Design No. 81344-0006), high- end food restaurants do not tend to register designs of their plates of food. Even if they were to do so, it is difficult to see what benefit they would derive from such protection. It would be relatively easy for other restaurants to copy the designs by creating plates incorporating some minor changes. Nor could they use design registration to prevent diners from photographing their dishes.

For more detail on the issues described above, you might like to read the following articles published by the IPKat: Chefs take issue with food porn; and Again on food porn.

Recipes

In part 2 I will look at food recipes. However, for now it’s important to mention that although a recipe may enjoy copyright protection, that protection simply enables the copyright owner to stop others making  physical copies of the recipe. Copyright law does not prevent others from creating a dish by using the recipe. So, copyright in their recipes would not put chefs in a position to stop diners photographing their dishes.

Conclusion

Therefore, the best policy for restaurants who object to diners taking photos, is to do as one chef in the north of France did according to the BBC. That is, to introduce a “no camera” provision on their menus.  After all, in many other industries such as kitchen design, shops are known to ask customers to refrain from taking photos of their displays. Restaurants could supply photos of their dishes for diners to post on social media. Then at least the quality objection would be dealt with.

In part 2 we will look at food recipes, and foods, and the extent to which IP rights such as trademarks, patents and know how, or industry norms come into play.

MBA Courses and business books ignore IP to a shocking extent

Intellectual Property Rights – Why Ignoring Them Could Be Disastrous For UK Businesses

Good news for UK business this month. The UK is ranked as the most entrepreneurial country in Europe and the world’s second most innovative country.

The Global Entrepreneurship Index measures start-up progress in the world. Only the USA, Canada and Australia came above the UK. (See the Guardian report).

For innovation we did even better, coming second in the Global Innovation Index 2014.

This is all well and good but as you may have guessed there is a ‘but’ coming.

Intellectual property (IP) law will be relevant to every one of these businesses.  Yet MBA courses, books for start-ups, and entrepreneurship groups neglect IP law to a shocking extent.

Start-up publications and MBA courses ignore IP

A survey of more than 20 books released between 2006 and 2013 that give business advice to fledgling companies reveals that only eight mention IP. And of those, a mere handful explore the subject beyond a brief summary.

It’s a similar story when you look at MBA courses. The one run at London Business School, is ranked number four in the world according to the Financial Times.  But it does not mention IP in its core modules.

Before looking at why IP is dealt with so cursorily, let’s see how many start-ups we are talking about. Currently, start-ups are increasing at a rate of 7% year on year; a staggering 526,446 new companies registered with Companies House in 2013. It is likely that at least 50% of these (most likely more) will not have considered IP at all before registration.

Other IP lawyers are similarly surprised

I am not alone in finding this surprising. Neil J Wilkof who contributes to blogs such as IPKat and IP finance, stresses this point frequently throughout his writings:

It remains my most vexing professional challenge. The “it” is how to integrate IP/IC into management education. The vexation comes from the seeming paradox that while intellectual property and intellectual capital are routinely described as cornerstones of innovation, if not modern business itself, their systematic presence in MBA curricula remains sporadic at best.”

The world has changed

My theory for this state of affairs is that society hasn’t caught up quickly enough with the dramatically changed role of IP law in the digital age. The fact is that the Internet is creating new rules for many industries, and also for IP law.

In an industrial society IP was a more esoteric subject; one that was of marginal relevance to small businesses. However, in the digital world IP occupies a central role. There are few areas of commerce that are not impacted by IP.

As I explained in my blog on rebranding, the risk of encroaching on other people’s rights is far greater nowadays. A simple search on the Internet may instantly reveal whether a name or image you are using belongs to someone else. In the overcrowded world of businesses, it becomes more important to register trademarks and other IP to protect your business against competitors.

Myths and Misinformation about IP

There is a lot of misinformation around IP law. These myths can be dangerous.

A common misconception is that IP is all about patents. People justify ignoring IP because they don’t have “£50,000 plus to spend on patenting”.  While it’s true that securing a patent may be optional or may not be worth the investment, at other times it may be the essential protection without which a business should not operate.

There are other IP rights apart from patents, such as copyright and trademarks. This could be the critical IP on which a particular business needs to focus.

The right action for one business will differ enormously from another as so much depends on the context, the business concept and the vision behind the business.

Some business advisers acknowledge the importance of IP for a business producing physical products, or to a business that is already successful and established, or to businesses operating in the creative sector.  However, IP should not be ignored by anyone planning a new project.

Many business advisers don’t understand IP

It is concerning that even those who should know better, such as investors and business advisers, still don’t really understand IP. Yet some will advise others about IP based on their own misconceptions. For example, they make statements such as “IP is relevant to certain ‘IP rich’ businesses”.

Whether due to wrong assumptions about IP involving costly registrations, or ideas as to the costliness of IP advice, IP is often not adequately considered when new ideas are implemented.

A serious error is the assumption that IP is all about the protection of what you have. What is less well appreciated is the need to take account of other people’s IP when making choices of names and designs. Also, if you ignore the question of whether or not you will secure necessary rights when you commission someone else to create something like a website for you, then you store up problems for the business down the line.

A frequently made mistake is around the choice of names. That is a whole subject in its own right. For now what is noteworthy is that there is no point in designing a brand around a name that you may not own, or which is otherwise inadequate from an IP perspective. Too often designers who create brands for their clients make fundamental errors that lay them open to negligence claims if their clients seek legal advice from an IP lawyer.

Undoubtedly, for some people IP is just too inconvenient to take on board.  We live in an age when it is so easy to set up a new business by going online and getting the information and templates you need. Legal advice is seen as a nuisance and unnecessary expense. Copyright and trademark law are thought of as simply too much of a grey area and too complicated. And that is precisely why we need more education on IP in books, courses and entrepreneurship groups.

 

What does copyright cover?

What Does Copyright Cover?

What does copyright cover?A Christmas Carol by Charles Dickens was an immediate success when it was first published selling 6,000 copies. Yet, as mentioned in my blog Copyright Protection: How to manage copyright in an unregulated space Dickens made little money from it due to piracy. In Victorian times copyright laws only protected a work inside the country in which it was first produced and created. Therefore after ‘A Christmas Carol’ was published, copies started popping up abroad in America, produced by publishing houses very cheaply. They gave Dickens absolutely no financial benefit.

Copyright is an important right which underpins the economic benefits in many industries apart from publishing. So, it’s worth looking into what copyright covers.

Copyright protects a variety of ‘works’ (names and taglines are not protected by copyright but by trademarks), and the types of copyright works which a business might typically use include:

  • books, brochures, letters and contracts
  • music and sound recordings
  • films and videos
  • drawings, illustrations and photographs
  • logos and packaging
  • computer programs, databases and games.

A work does not need to be of a high quality to enjoy copyright protection. If I began to write a blog post and scribbled a page of notes, I would own the copyright in the notes even if the notes were in serious need of editing.Copyright protection arises automatically, meaning that, unlike patents, trademarks and designs, in the UK it is not necessary to register in order to secure copyright ownership. However, don’t let this lull you into a false sense of security.

One of the many myths about copyright, is that when you pay for a work, you own the copyright. This is not true. The contract terms commissioning the work govern whether you will have copyright. If there is no written contract, copyright will automatically arise in favour of the creator rather than in yours. The person paying for the work just has a licence to use it (and this licence is a lot narrower than the rights copyright ownership would give).

Default rules for copyright ownership

The question of copyright ownership depends in part on who creates it unless there is a specific written legal agreement discussing the matter.

One rule states that the creator of a work automatically becomes the ‘first owner’ of the copyright in the work, except where it is created by an employee. Even if there is no written agreement about copyright with an employee, under English law it is the employer who is the first owner of any work created by the employee in the ‘course of employment’.

An ‘employee’ means a member of staff on your payroll. Freelancers or self-employed contractors, whether permanent or occasional, are not your employees when it comes to copyright, so you would not own copyright in their work.

If you ask another business to produce work for you, be they a sole trader, partnership, company or educational establishment, you will only own copyright in that work if the written agreement between you says so.

This terms should be agreed before you commit to using someone for your project. Note that, in contract law, the time that you are legally bound to use someone’s services may be much earlier than you realise. If you are no longer free to walk away, then unless the other party is willing to give you copyright, you have no right to demand it. The moral is not to leave discussions about ownership of copyright till too late. Otherwise, you will not be entitled to claim copyright.

In practice, if you are having an important product developed, like a piece of software for your business, it’s crucial to address the rights in it before you are committed to using that developer. The easy-going willingness of IT developers to assign rights to you could well turn into resistance when it comes to actually signing on the dotted line. So, get it in writing at the outset rather than leaving it till the end of the project.

Bear in mind that if you don’t take steps to transfer ownership in the early days, when the rights have little value, once they do acquire value, other people may be unlikely to readily agree to transfer the rights over to you without further payment.

Rights of the copyright owner

Copyright is a property right, like many other IP rights. So, it can be sold, bought, given away or left to someone in a will. The copyright owner is the one entitled to ‘exploit’ the work, such as by copying parts of it and selling copies to the public.The rights exclusively enjoyed by a copyright owner include renting or licensing the work to others, broadcasting it, transmitting it over the Internet, adapting it into other languages, and so on.

As always, it’s easier to negotiate rights before you’ve engaged someone’s services than afterwards. The best policy is to write your requirements into the agreement when you commission a work such as a website. If the agreement doesn’t give you a full licence to use the work for all your intended purposes, you may later be charged a further fee for permissions to use it. For example, if you are having a professional photograph taken, agree with the photographer what uses you will be able to make of the photo in future. Is it just for your website and social networking sites? Or could you also use the photo if a journalist asked for your image to accompany a magazine article?

Copying a substantial part of a work

Many people mistakenly assume that you can copy someone’s work as long as you credit them as the author. If you take ‘a substantial part’ of a work, you will be infringing copyright in it. This is a trap for the unwary as, in some cases, even a very small part of a work may count as a substantial part of it. And it doesn’t make it acceptable if you acknowledge the author.

Note that you may sometimes copy a large proportion of a work without infringing copyright, because it may not be a substantial part of the text in question. This would apply if the material was fairly generic. On the other hand, copying a small fraction of the whole work can sometimes be enough to infringe copyright.

In one case, a judge had to decide whether a 20-second recording of a piece of music known as Colonel Bogey (the whole song lasted four minutes) infringed copyright. In finding that it did, he said:

This reproduction is clearly a substantial part of Colonel Bogey … Anyone hearing it would know that it was the march called Colonel Bogey, and though it may be that it was not very prolonged in its reproduction, it is clearly, in my view, a substantial, a vital, and an essential part which is there reproduced.

Unfortunately, there is no rule of thumb for determining what uses you may make of a copyright work. So take care and, if necessary, seek legal advice before borrowing from a copyright work, especially if it’s used for a commercial purpose, such as in a book you’re writing.

If you don’t have permission, and you don’t have a defence under the ‘fair dealing’ exceptions, you would infringe the owner’s copyright.

The fair dealing defence is available if you are using an image for the purposes of review and criticism (such as to report an event in the news), or if it’s purely for non-commercial research or private study. In limited circumstances, you may also be able to use work for parody or pastiche. Similarly, there is no copyright infringement if copyright work is incidentally included in an artistic work, sound recording, film or broadcast (so-called ‘passing shot’ use). However, what amounts to  incidental use may be surprising. For example, if music is included in a work (e.g. playing on a radio included in a scene in a film) its inclusion cannot be said to be incidental.

Conclusion

It was not until 50 years after the publication of ‘A Christmas Carol’, that the Berne Convention was created to give authors copyright protection over their work abroad as well as in the country in which the work was created

Copyright covers so many aspects of business life that it is important to have an audit to understand where copyright ownership lies in existing works.That way you can decide which works you would like to own, and what steps you need to take. Otherwise, a dispute or other problems could arise which costs ten times more than if you looked into the matter in advance and sorted it all out.

Find out more about copyright ownership, contracts, and infringement on our website.

Protection of television formats - The Great British Bake Off

Protection Of Television Formats – The Great British Bake Off

Protection of television formats - The Great British Bake OffThe Great British Bake Off isn’t just clever when it comes to cakes. By protecting its IP, it has been able to secure a fortune in licensing.

The other day I met someone who told me that she had been advised that it is not possible “to have copyright in an idea”. As a result, she had given up trying to turn her idea for a programme into reality as she would not be able to secure legal protection over it.

What is protectable

It strikes me that two separate issues are being mixed up here: protection of an idea and protection of a concept that turns into something tangible.

As a general rule ideas cannot be protected other than through the law of confidentiality. So, if a party to whom you wish to disclose an idea is unwilling to sign a confidentiality agreement, (or NDA as it’s often called), there will be little you can do if that party runs off with your idea.

In contrast, once a concept is turned into something tangible like a television programme it is possible to obtain powerful protection for it, in the same way as businesses can.

The intellectual property that affords powerful protection

Protection relies first of all on having a distinctive name. Programmes such as Hotel Insprector are poorly named, as they are too descriptive. It is not possible to have trade mark rights over such names. Even if it had a trade marked name, it would be impossible to stop others putting on separate shows using the concept of an expert visiting and suggesting improvements to failing businesses. So, the Hotel Inspector has led to others running with similar concepts and setting up programmes such as Restaurant Inspector and Business Inspector.

The same goes for business formats such as Air B&B; you can’t stop others copying the concept and setting up competing businesses.  But, if you have a distinctive name, at least you will be memorable and can stop competitors using the same or even similar names.

How the Great British Bake Off is protected

An example of a television programme that has protected its intellectual property is the The Great British Bake Off. The show’s producers, Love Productions, protected their IP and have reaped the rewards through a lucrative licensing deal worth millions of pounds.

This was the subject of a recent Guardian article, Great British Bake Off: when iced buns meet intellectual property.

Interestingly, as soon as the programme was launched in 2010, the company filed its trade mark covering a number of classes. Some of them were poorly chosen, but this is unsurprising given that the company did its own trade marking.

Once they were more confident of the progamme’s future success they appointed representatives to file in 8 classes to protect spin offs and merchandise. For example, the company registered in class 9 to protect computer games and other software, in class 16 for various stationery and paper products and in class 28 for toys.

To support its licensing deals, these registrations would have been internationalised in order to extend protection to other countries such as the USA.

Other intellectual property

As well as the Bake Off brand, the company is likely to be licensing its know-how for creating the show and making it a success. Licensees would be given the benefit of its experience in setting tasks and judging completion of the contestants’ tasks. The licensing deal would be likely to include copyright in the programme’s theme tune and its list of cooking tasks.The more intellectual property rights that can be packaged up together, the stronger the protection for the owners of the licence.

In conclusion, if you want to monetise your successful concepts, be they business formats such as Zumba, or television formats such as the Great British Bake Off, it is essential to put in place the right protections. That way you have the full range intellectual property protection to underpin your licensing deals.

What is Intellectual Property Part 2

What is Intellectual Property? A Guide for Start Ups (Part 2 of 2)

What is Intellectual Property Part 2In this second blog post for ambitious start-ups during global entrepreneurship week, I focus on names, copyright and designs, as well as know how.

In the first blog post, What is Intellectual Property? A Guide for Start Ups (Part 1 of 2), I looked at patents and trade secrets.

There is much a well-informed start-up can do to protect its IP without spending a lot of money. The trick is having an IP strategy and knowing how to manage IP issues.

IP issues for names

As mentioned in an earlier blog, a start-up is not free to choose whatever name it likes. There are legal considerations to take into account. Finding a name that is available to use can be difficult due to the sheer volume of existing trademark registrations, and the fact that similar names are a problem.

For example, as discussed in our blog post, Facebook Users Mourning the Removal of Scrabulous, the name “Scrabulous” was too similar to “Scrabble”. As a result, the Scrabulous Facebook App which had attracted thousands of followers had to rebrand.

Trademark clearance checks are necessary to avoid infringing on the rights of others. While you can do some basic checks yourself, you need advice from a good trademark lawyer before you settle on a name. Names are an important way in which the law protects a business, so it is worth taking time to pick a good, legally effective one.

Once the name is picked, and checked – this might involve international searches if your business is going to be online – you need to register a trademark. You also need to be ready to extend that registration internationally.  Registration can be costly, so a business without a budget for IP would do well to delay choosing its ultimate brand name.

Disasters due to ill-advised name choices

Trademark disasters can befall any business, even multinationals such as Microsoft. Microsoft was forced to rename its cloud storage service SkyDrive to OneDrive following a trademark infringement dispute with BSkyB. Start-ups face similar problems all too often, they just don’t attract media attention. An important difference between start-ups and the Apples, Amazons, and Microsofts of this world is that start-ups lack the resources to get themselves out of trouble.

If a start-up has to rebrand for infringing on the rights of others it could sink altogether. As I explained in my blog post, Rebranding: Legal Issues you can’t afford to ignore, don’t shrug off the risks by assuming you will just rebrand if it comes to it. A rebrand involves changing everything at short notice and it will rarely be possible to divert customers from your old URL to the new one. Taking a risk over your name is a gamble – not a sensible business decision.

To avoid problems it is best to go with a temporary name initially. The time to focus on finding a permanent name is once the business concept is proven and there is a budget for IP checks, registrations and designs.

One strategy might be to start off using a descriptive name. As descriptive names cannot be registered as trademarks, you’re on safe ground using them. You can choose a distinctive brand name later, when resources allow. You can always keep your descriptive name at that stage by making it your tagline.

Businesses that need a budget for names from the outset

On the other hand, you may be starting a business where it is essential to build a brand. In a blog post a few years ago, I explained how Zumba’s success is due in part to its name. Zumba is a distinctive name that in no way describes its dance fitness business.

If yours is such a business – one that needs an effective brand name in order to succeed – then you would not be able to use a temporary name. You would need to find funds to consider trademarks before embarking on the business.

If Zumba had chosen its name but failed to register a trademark before the dance took off, its rapid success could have meant the founders were no longer able to register ‘Zumba’ as a trademark. This is a peculiarity of trademark law. Zumba’s wild success might have made the name generic and therefore incapable of registration.

It is generally advisable to register a trademark, as that is how you own the rights to a name. By registering their name, Zumba were able to capture the value that their success generated. Without it they would not have been able to exploit their brand for categories such as videos, clothing, books, and so on. And, the business would be worth only a fraction of what it is worth today.

So, if your success hangs on creating a brand, and licensing others to use your name, you won’t make it big unless you spend on international trademarks.

Copyright and designs

It may be that the key to protecting your business is not patents or trademarks, but copyright of a piece of software or other item.

According to research by the IPO, 40 per cent of business owners think they automatically own the copyright if they commission work which is capable of being protected by copyright.  This is the single biggest mistake businesses make. Paying someone to create work does not automatically make you the owner of the copyright in it.

So, it’s important to understand what types of material are protected by copyright. That way, you can secure the rights over anything that matters to your business.  For example, logos are protected by copyright. As the owner of a business, you need to ensure you own the copyright in your logo.

If you are using another company or a freelancer to develop your software (or other items that are protected by copyright) then make sure ownership in the work is transferred to you in writing. This should be done before you engage their services, for example in the contract you enter into with them. But this does not need to be done in a formal contract. It could be dealt with in an email. See my blog post: Why use a lawyer when you can buy a legal agreement? for further guidance.

If you have a design created for you such as a cartoon character, logo, surface designs, or an unusual shape, (such as the coca cola bottle) make sure you obtain the rights. But note that there is a limited time to register these as designs. There are official fees to pay when you register designs, so be clear whether the design in question is going to give you a competitive advantage or not. If you think it might, then try to find the money for design registration.

Know how

Finally, bear in mind that you may want to exploit any know how you develop. This will be discussed in a later blog post, Licensing and franchising: what is the difference and does it matter?

Say you are a car wash that has developed a successful process for getting its customers to buy for hot wax and other optional extras. You might decide to license this process to other car wash businesses in return for royalties. This involves a legal agreement whereby you license your know how and ensure the other party uses it under strict conditions of confidentiality.

Conclusion

If you are thinking big, you need to understand IP and how it applies to your business.  If you have the funds from the start, you can use IP to protect your competitive position straight away. If not, you can position your business so that you secure your IP once it grows and you have the resources in place.

For more information about trademark registration and protecting your brand, visit our dedicated trademark website www.azrightstrademarkregistration.co.uk.

hat is Intellectual PropertyA Guide for Start Ups (part 1 and 2)

What is Intellectual Property? A Guide for Start Ups (part 1 of 2)

What is Intellecutal Property - GuideTo mark global entrepreneurship week, we are dedicating two blog posts to start-ups that are thinking big. This first one will cover patents and trade secrets and the second will be on trademarks and copyright.

A start-up’s intellectual property strategy needs to take account of their budget (usually limited) and business objectives.

The single most important piece of advice I would give to a start-up is that they need to find out about intellectual property (IP) and how it affects their business. Lack of funding for IP protection is not a reason to bury your head in the sand and could prove costly as the business grows.

What is Intellectual Property?

IP is an umbrella term for a range of separate legal rights, which protect a business and increase its value. These rights relate to the business name and logo, unique software that sets it apart from competitors, clever inventions, creative designs, or secret recipes and know how.

IP Rights

The main IP rights are patents, designs, trademarks, copyright and trade secrets or know how.

Patents protect inventions of products or processes, and relate to the way things work, what they do, how they do it, what they are made of or how they are made.  Patents are not concerned with the visual appearance of products – that is the domain of registered designs.

Trademark is the legal term covering brand names and other signs.

Copyright protects a diverse range of materials including websites, software, logos, the written word, music, art and more. There are some surprising rules within copyright law, so ownership will not always be with the person you expect.

Know how or trade secrets are two of the most important and valuable types of IP. To retain their value they must be kept secret and their disclosure tightly controlled. Once the secret is out in the public domain it can no longer be protected.

The terminology around IP is often confused in the media, leading people to think a name can be copyrighted or a book patented, and so on.  So, it’s worth taking the time to understand the difference between IP rights if you have big plans for your business.

In this first blog post I will discuss patents, and trade secrets, while the second instalment will cover the other IP rights.

An ambitious business that takes the time to understand IP can do a lot to protect its position. Often, there are alternative (less expensive) strategies for protecting yourself.

Trade secrets v Patents

If a patent is not essential for your business model you could simply guard your innovation as a trade secret until you have the resources to patent it. The software industry is an example of a business model where patents are rarely critical to the business model. Copyright is the IP to focus on when software is a significant element of your business model.

Where it is possible to use an invention without its inner workings being on display you can use the innovation while keeping its details a secret. This preserves the possibility of patenting it later once resources allow, unless someone else files a patent first.

Indeed in some cases, you may decide never to apply for a patent. As patenting involves revealing the details of how you achieve something you may prefer to keep that information private. For example, the Coca Cola recipe has been kept a tightly controlled secret for 100 years. Had they patented it, the recipe would have been protected for 20 years and would then have been available to others to use freely. As it is, Coca Cola has preserved the life of its innovation by not patenting it.

Whether this approach is suitable for your innovation depends on its nature. The question you need to ask is how likely are others to stumble across the same thing?

Every business is unique

Every business is different and will need to develop an IP strategy that reflects its plans; one size does not fit all. There is nothing that says you must always protect your inventions, or that you can ignore patents just because you’re a start up. The business model and what you are selling determines the IP steps you should take.

How does intellectual property affect your business model? It may be best not to pursue some ideas if there is no budget for an essential patent, or an essential trademark registration. On the other hand, for many businesses such IP issues may not be critical.

So, the first step is to find out whether your IP risks and opportunities can be managed with minimal expenditure in the business’s early days. Full IP protection can then follow once the business has sufficient resources.

Business ideas that require a patent

The experience of Mandy Haberman, inventor of the Anywayup Cup, illustrates the type of business that it may be best to avoid if you cannot afford to protect essential IP rights such as patents and trademarks. Otherwise, if you succeed, a better-resourced entity may copy you.

In Mandy’s case, as soon as other manufacturers realised there was consumer interest in her product, they copied it and produced similar cups. As this Guardian article explains, she took them to court to protect her business.

“Because I had patents,” said Mandy, “I was able to go to court, defend my idea, enforce my patent rights and that meant that I kept my monopoly in the market. This made me a lot of money; if I had not had the patents, I would not have made anything.”

So, if you want to make it big avoid embarking on projects where patent protection is essential from the start. These are the sorts of business in which the dragons in Dragons’ Den lose interest when they discover there is no IP protection, or that the patent protection is too weak.

Owning IP puts you in a strong position. Don’t let thoughts of the difficulty of enforcing your rights stop you getting the legal protection you need in the first place. Often, simply owning IP rights is enough to avoid disputes arising.

Business name

In the next blog post I will discuss the importance of names. For example, “Anywayup Cup” is the name by which leak-proof children’s cups are known. Long after their patent expires, the brand will live on. Consider the many other inventions that have become synonymous with their names – Asprin, Hoover, Kleenex to name a few – and you will agree that names are one of the most important form of IP.

I will also discuss copyright in my next post. It is one of the most universally applicable rights but it often catches people out due to the nature of the copyright rules.

In the meantime, if this article has prompted some questions about what IP means to your business, why not book a free consultation with our intellectual property team .

Naming your start-up

Naming your start-up: tips for lasting success

Naming your start-upThe notion that the main consideration when choosing a new brand name is its availability as a .com domain is widespread. What is less well known is that you may not be free to use your chosen domain name if the name would infringe on someone else’s trademark rights.

Countless start-ups regularly trip up because they do not realise they need a legal opinion to assess whether the name is free to use. So, there is no point paying substantial sums buying domains as one early stage business owner I met did a while ago. He had paid £10,000 for a .com domain only to be challenged by the owner of a similar trademark when he began using it for his new business. The disruption and financial consequences were an irritating distraction for him. It was completely avoidable. Had he consulted a trademark lawyer before choosing a name he could have avoided this set back. However, many business owners are reluctant to pay for a professional opinion, regarding this as an unnecessary expense. Ironically, this particular business owner, then went out and bought another domain name, again without having any checks, and only turned to us to register it for him. He was lucky that this time there were no problems with the name.

As this is a topic of interest to me, I was amazed when I came across a recent blog post from the CEO and co-founder of “Skilljar” which focused purely on whether the .com was available when choosing a name. In that case the business was changing its name, and surely this is one time when you really don’t want to get it wrong. The disruption of changing names 3 times would be so distracting and wasteful for the business.

Based on her experience of not being able to purchase the .com to the name she was using – Everpath – Sandi Lin decided to abandon use of the name, Everpath (even though her company held every other domain variation, including the important .net) and set off in search of a new name for which the .com domain would be available.

Using the crowdsourcing platform, Squadhelp, she searched for available domain names, and settled on the name “Skilljar”. She was convinced the crowdsourcing site would minimise the time involved searching for a new name. Based on over 800 submissions, she was inspired to pick a new name. Using ‘skill’ and ‘master’ as roots to search for names on Sedo, a domain name auction site, for ‘Buy now’ listings she then found several names that were available to buy within a maximum price limit of $5,000. She also checked for social network availability and searched Google for similar results. So it was that “Skilljar” was born.

What she omitted to do was to check whether the name Skilljar was too similar to a trademarked name in the USA and other parts of the world.

The correct way to choose a name is to do some Google research, check that the desired domain is available, and then get a legal opinion on the name. If the results are favourable, then register a domain as well as a trademark. Trademarks are the way to stake your claim to a name. Even though it is not necessary to register a name to use it, registration gives you far better rights over a name, and puts you in a stronger position if someone else starts using the same name (which they are more likely to do if you haven’t put them on notice of your rights over the name by registering it as a trademark).

So, while Lin is advocating crowdsourcing as a quick and relatively cheap approach which took her only 8 hours and cost the comparatively modest sum of $2,195, it is important that others looking to find a new name appreciate that this expense would be completely wasted if someone else had trademark rights over the name.

As a trademark lawyer I find her decision to rebrand questionable and surprising, particularly as at no point did Lin even consider the trademark implications of her proposed name. She was willing to forfeit all brand confidence to date, and choose a new name, and did not first think to check that the new name would be available for her to use.

Whilst arguably an inconvenience to have to first find out whether someone else has trademark rights over a name, start-ups are in danger of spending thousands of pounds more on enforced rebranding, and on domain names that they are not free to use.

So, don’t just focus on a brand name’s web-friendly characteristics. Avoid a lawsuit for trade mark infringement, and make sure you are using a name you can own.

Ignorance not Bliss

Ignorance not Bliss – Avoiding liability for infringing pay-per-click advertising activity

Often, businesses treat intellectual property just as something they need to own and register, without giving enough thought to the risk of infringement. Even where the risk of infringement is considered, business owners don’t often realise that they could be liable for the actions of their contractors or employees, even if they are unaware of them.

This is increasingly a problem when it comes to social media and online marketing, and a recent dispute illustrates the risks involved. Ayesha Vardag, a prominent divorce lawyer, discovered that, unbeknownst to her, the marketing agency her firm had engaged was bidding on the name of her previous employer in order to generate enquiries through Google AdWords. Following negotiations, Vardag agreed to settle for over £40,000, as reported by The Lawyer.

European Trademark Registration

European Trademarks

European Trademark RegistrationIf you are doing business in a number of different European countries then, rather than registering your trademarks in each jurisdiction separately, you will likely apply for protection at the European level. 

This enables you, through a single application, to  secure protection in all 28 countries (and counting). 

Unless you only need protection in one or two member states, a European trademark is a far more cost effective, and straightforward solution.

However, it is not without its risks. While a trademark application in just a single country generally just faces the possibility of an objection from other brand owners in that country, a European Community Trademark can be opposed by an existing trademark owner in any one of the 28 member countries of the EU.  This would then block the entire trademark.

So, how can you minimise your risks? The key is to commission professional searches to identify potential obstacles before you commit to a mark, and file your application. You might begin by initially looking at the UK and European trademark registers, before then expanding the search to the national registers of each EU country. International searches like this can be quite expensive, and offer diminishing returns, so it is important to discuss what degree of searching is appropriate with your legal adviser. It is never possible to eliminate the risks entirely, but through appropriate searches, you can improve your chances without blowing your budget. Your attitude to risk, and the funds you are willing to commit to searching, will generally depend upon how critical your brand is to your business.

But what if you do encounter a problem? That is not necessarily the end of the road. If your European application is opposed by a business with rights in just a single member state, the first step will generally be to negotiate with them, and see if it is possible to come to an agreement allowing both businesses to coexist. Under some circumstances, it might not be possible to reach an amicable settlement, in which case the European trademark courts may resolve the dispute.  However, this can be costly for all involved.

If, ultimately, you do decide it is best to withdraw your application in that particular country, all is not lost as you are free to file national applications in those European countries from which you did not face an objection. However, there are no guarantees that those national applications would not face objections from other trademark owners.

A key issue when it comes to trademarks is what is known as the priority date. Typically, this is the date on which you file your trademark application, and the date from which your registration is effective. If you were to entirely withdraw your application following a dispute, and refile national applications, then you would receive a new priority date. However, it is possible to convert a European trademark application into a group of national applications, and retain your original priority date. An important advantage of doing so, is that your application will, broadly speaking, take precedence over others which were filed in the interim.

Still, converting a European application to national applications, or refiling directly in the relevant countries, can become very expensive as fees are payable in respect of each territory. So, where resources allow, it is best to carry out appropriate searches in advance. You can find out more about national, and international trademark registration on our dedicated website AzrightsTradeMarkRegistration.co.uk.