Whether they know it or not, every business owns Intellectual Property (IP) in one form or another. IP can be a critical part of a company’s assets, providing it with ability to prevent competition and rapidly scale the business by licensing. Indeed, many businesses would not exist if they had not taken proper steps to identify, protect and exploit their IP.
Here are our top five tips to make sure you stay in control of your IP.
Tip 1 – Implement An IP Policy To Identify Possible IP
Before any application for IP protection can be filed a business must first identify whether or not they have anything to protect. This may sound obvious, but many businesses, even large ones, fail to fully address the matter of identifying of IP.
Such an identification process should be ongoing, or at least periodic. Many large businesses have established methods for gathering information on what their employees are doing, even offering financial incentives to submit information on possible inventions and developments made in the course of their employment. This information is reviewed and sifted and those inventions that might be commercially valuable are put forward for protection.
Evidently smaller companies often do not require such measures, but the possibility that you might be developing IP or may have recently done so should always be borne in mind.
The main questions that needs to be asked by any business with any development are:
1. Do we have something that we can protect?
2. Are we going to infringe any third-party IP?
These questions need to be raised at the right time, and often before any non-confidential disclosure of the development if valid IP protection is to be sought.
For example, it is often disheartening for us (as patent attorneys) when someone asks if they can protect their marvellous new product as ‘it’s selling really well’. Unfortunately it’s then too late to get valid UK patent protection as the invention isn’t novel – they have non-confidentially disclosed it.
It should be noted that in such circumstances patent protection might be available in those countries that have a ‘grace period’ for filing a patent application (e.g. the US, which has a 12 month grace period from the first non-confidential disclosure).
Also UK/EU and US registered design protection might be available for the appearance of the product as all these territories have a 12 months grace period for filing design applications.
However, even though these grace periods exist, it’s best not to have to rely on them, so implement an IP identification & capture process that all your employees are aware of.
As mentioned above, along with checking whether or not you might be able to protect your developments, you should also check to make sure that any new activities/products/brand names etc. are not going to infringe anyone else’s IP rights. Not doing these checks is the most common cause of IP disputes.
Tip 2 – Understand Confidential Information
Confidentiality is a major consideration. Although employees and commissioned third parties might have an implicit duty of confidence, it doesn’t harm to have them also sign a confidentiality agreement, as this provides another course of action should a breach of confidence occur; i.e. breach of contract.
Bear in mind that if the worst happens, and an invention is non-confidentially disclosed through a breach of confidence, there is a six month grace period in the UK and Europe for filing a patent application for valid protection.
Mark important documents ‘confidential’ to act as a deterrent to breach of confidence, and so that there is no argument about whether or not the relevant information was confidential.
Use confidentiality agreements when entering discussions relating to confidential information.
Free confidentiality agreements can be found in this useful Government leaflet:
http://www.ipo.gov.uk/p-cda.htm
Tip 3 – Use The Free Patent Databases
Technological R&D can be assisted by conducting patent searches. It has been estimated that around a third of money spent on R&D in the UK is wasted as all the information is available in published patent applications.
Whether that percentage is true or not, there is a huge amount of information freely available in published patent applications, most of which can be accessed through the espacenet website:
http://worldwide.espacenet.com/advancedSearch
Also, watching published patent applications also helps you keep an eye on what your competitors are doing.
Tip 4 – Understand R&D Tax Credits And The Patent Box Tax Reduction
The UK Government is supportive of companies that are involved in innovation and are developing IP. The Government rightly views these activities as being good for the UK economy, so two major tax reduction schemes are in place. You should therefore check to see if your company is eligible for these tax breaks and take steps to ensure that you can claim them.
Your company might be eligible for R&D tax credits if it is involved in innovation. The rules are complicated and we’d recommend checking your eligibility with your accountant, but more information can be found on the HMRC website:
If you have any UK patents or patent applications then you should be keeping a record your income relating the technology in order that you can claim Patent Box tax relief. You may also need to take other steps to ensure you can claim the reduction so we recommend that you talk to your accountant. More information on the Patent Box scheme may be found in our article from April 2013:
https://www.londonip.co.uk/patents/patent-box/
Tip 5 – Understand The Law Of Commissioned Works
We bang on about this all the time. That’s because it is one of the major causes of IP disputes – even if you already know about the problems with commissioned works it’s worth reminding yourself of this.
If your business commissions a third party to create something on your behalf, you would expect to own all rights to whatever is finally developed?
Unfortunately that is not always the case.
For example, you commission a design agency to produce a company logo for your business. The logo is automatically be protected by copyright and unregistered Community design rights. The legal owner of those rights is the person or business that you commissioned to create the logo.
Your business may, under UK law, be the ‘beneficial owner in equity’ of the IP rights, but this split ownership can lead to serious problems and disputes.
Worse still, let’s suppose you commission the manufacture of a prototype and in that process the commissioned party has to overcome a problem to make the prototype work, and in the process makes an invention protectable under patent law. They own that invention and your business cannot be validly granted a patent for it without the commissioned party assigning rights to your business. What if it’s such a good invention that they don’t want to assign it?
Thus, in the absence of an appropriate contract to the contrary the person or company a business commissions may, at the end of the development process, own some or all of the IP rights in the final product or process. It is therefore essential with most commissioned work to have an appropriate contract in place at the outset.
Along with other terms the contract should state that once the work has been done the commissioned party will assign all IP rights that have been developed to the commissioning party.
Commissioned works are frequently the subject of litigation, so ensure your business is fully protected.
Summary
Developing anything in which intellectual property subsists, and taking it to market, involves many IP and accountancy considerations.
All businesses should seek professional legal and accountancy advice to ensure that their rights are safeguarded and to ensure that they claim the tax reductions they are entitled to.
© London IP, July 2013. All rights reserved.
