Putting your Intellectual Property in order at home
When you are expanding your business to export and reach those new opportunities overseas, you have to first put the right building blocks in place here in the UK.
With Intellectual Property (IP) being a vital business asset this has to be one of those building blocks that is in place from the start of your journey. Your Intellectual Property building blocks have to be WATERTIGHT AND CONCRETE. With a little time and effort invested at the beginning this will ensure that everything is in order and that you start off on the right track, avoid costly mistakes and ultimately avoid your plans from being compromised.
Intellectual Property in a company is not only a clear indicator of performance, but also an indicator of the value within the company. Estimates vary but experts believe that between 70% to 90% of the value of the top 500 traded companies on the stock market is attributed to a company’s IP. You don’t have to look far to see examples of this – Microsoft, IBM, Apple, Pfizer to name but a few.
Identify your IP
Start by reviewing what IP you have in your business. This is the identification stage and perhaps you have already thought about this and come to conclude that you don’t own any IP. If this is the case, check again or seek professional advice!
Every business will have some IP in it of some kind. We appreciate that these assets can be trickier to identify as they aren’t tangible assets such as key people, buildings plant and machinery. We routinely help clients with this task by undertaking an intellectual property audit, as part of the process we review all of the IP that exists in the business at that point.
IP covers a wide range of intangible assets – these are the main ones to identify:
Trade Marks (i.e. the brands and logos you use in your business)
Patents (a form of protection for new inventions – do you have any technology that should be patented?)
Copyright (will automatically exist in written works, images, computer programming, music, videos etc)
Designs (any products with significant visual appeal?)
Databases (these can hold your crown jewels –e.g. customer lists and security and access to these is key)
Trade Secrets (e.g. the recipe for Coca Cola)
Protecting your IP
Once you have established the IP that exists in your business, the next move has to be to decide how you will protect these rights and this should be done as early as possible. In terms of time scales, there are limited opportunities to register some IP rights. In fact with patents the window of opportunity is very limited indeed. With registered designs, the window of opportunity is within 12 months of commercial exploitation of your design.
In the absence of registered intellectual property rights, a new company has limited legal power and cash flow to stop this. What gave you a commercial edge can be hugely diminished by another competitor imitating the very thing that made your business different from the rest. Designs and ideas can be copied. Brands imitated, and technology reverse engineered.
We should flag up here that registering IP is a complex area and it can be expensive so budget wherever possible and seek professional help. In the case of patents for example, self drafted patents rarely succeed and are almost impossible to defend or use commercially. Speak to an IP Solicitor, Trade Mark or Patent Attorney regarding registering your rights.
You could set yourself a budget for filing and putting together a strategy for staging the relevant trade mark, patent, and design filings so that not all the costs come together.
Commercialization of IP
Intellectual Property like most other forms of property can be sold, bought, licensed or charged by way of security. Many businesses unfortunately become complacent and fail to see these opportunities to commercialise their IP. Ask yourself if your business model or parts of it, e.g. technology could be licensed? Would franchising work for your business? Or perhaps agency or distribution arrangements would act as vehicles in creating further revenue streams.
If you are looking to grant rights to others to use your IP, it is vital to take advice and get proper contracts in place. The areas that people fall out about routinely tend to be performance of the contract and payment. Badly drafted agreements will cost you time money and heartache. If you are going to make money you have to invest it wisely in getting the right business advice.
Trade Mark Registrations
Finally, we move on here to give you an example of one of the types of registration that we frequently carry out for clients. But do also consider if you need to register any new and novel technology that you have invented as a patent? Or any unique design as a registered design? Copyright protection automatically subsists and does not need to be registered.
A registered Trade Mark is likely to be one of the most valuable and significant registrations to prioritise in the majority of situations. The registration process involves making an application to the relevant trade mark registry.
There are many regulations in place which govern what can and can’t be registered as a trade mark. We have filed trade marks for clients for years and are able to advise you on whether your mark is likely to be accepted. The main applications that we make for clients are either registrations of word marks (these give the maximum protection) or figurative logo marks. A word mark application has to be distinctive and not descriptive in any way. You need to think carefully about what goods / services you provide and the trade mark application will need to reflect these accordingly. We take specific instructions from our clients on these points prior to drafting the specifications for each class.
Trade marks are territorial in nature. In order to get the best protection you will need to file in those countries where you intend to market your products and services. If you are simply confining your business model to the UK then clearly a UK trade mark will be sufficient. There is the option to file a European trade mark which will provide you with cover in 28 different European Countries, this currently includes the UK. If you intend to use your trade mark in more than one European country then an EU mark is by far the most economical way of getting the protection you require.
We would always recommend that prior to proceeding with any trade mark application you look to have a professional clearance search undertaken. This will ascertain whether there are any earlier conflicting marks, or ones which will cause a problem if your product or services are launched in the UK and Europe. Whilst doing a clearance search is not an exhaustive review of every trade mark or brand which may cause a problem, it is a good way of looking to see what is already registered before filing fees are incurred. Any application that is made “blind” i.e. without a search can run into difficulties, especially where there are similar marks already registered. This can certainly save money in the longer run.
The advantages of having a trade mark are that you have exclusive rights to that mark and can take action much easier if another company infringes your brand. A trade mark is a valuable asset to be added to your balance sheet and to add to your IP portfolio. Your business will certainly be far more attractive to any investor where registered protection is in place – think of the TV show Dragons Den! There are commercial opportunities to be gained from having a registered trade mark, for example the ability to sell or license the mark to others.
We set out some further information on international trade mark registrations within our piece titled ‘IP Protection Overseas’.
In order to find out more on the IP points we mention here, you can visit our website at www.virtuosolegal.com or contact us on 020 741 28372. You may also with to visit the UK Intellectual Property Office website at www.ipo.gov.uk.