IP can be an important asset for attracting finance, creating a competitive advantage in the marketplace and earning a return on intangible investment.
In 2021, record numbers of patents, trademarks and designs were filed in Australia, according to Joanna Oakey, the founder of Aspect Legal.
Various studies have shown that Australian SME businesses with registered Intellectual Property (IP) rights are more likely to achieve higher growth, Oakey says, who argues that it is also an important asset for attracting finance, creating a competitive advantage in the marketplace and earning a return on intangible investment.
When it comes to protecting your IP, prevention is a lot cheaper than the cure, says Oakey.
Here’s some check points for businesses:
Understanding IP and ownership
IP refers to creations of the mind; designs, trademarks, processes – they’re often wholly or partially intangible. Therefore, it can be hard to detect infringement or prove ownership, which is why it is important you have protection in place. The value in IP is protected through IP rights – some require a formal process of registration, while others do not need to be (and cannot be) registered.
Identify your IP
There are many types of IP, so you should start by investigating what is relevant for your business. The names of the business and its products, the logo, website, and any written material of the business are common places to start. Once you have identified the key areas of IP, protect them.
Copyright and trademarks
The most relevant types of IP protection are copyright and trademarks. Copyright is an automatic protection in Australia for bodies of work, drawings, art, literature, music, film, broadcasts and computer programs. A trademark is a ‘mark’ that distinguishes the goods or services of your business, for example, the business name, brand name or logo. You can have unregistered trademarks, but to stop others using or registering them, it is important to get a trademark registration in each of the countries where you use it.
Patents and trade secrets
If your business creates inventions or new processes, patents are an important area for you to understand. A patent is a right granted in relation to a device, substance, method or process which is ‘new, inventive and useful’. The patent holder has the right to prevent others from making, using or selling the same device, substance, method or process for the period of the patent. Trade secrets refer to confidential information such as secret formulas, processes and methods used in production. One of the keys to enforcing this right is demonstrating that the company took reasonable measures to protect the information, so it is important you can show you have limited access to this information. Contracts, confidentiality agreements and appropriate clauses in other agreements with people who might have access to the information should also protect the businesses trade secrets.
Contracts and agreements
Legal agreements should be in place with anyone who is creating (or has created) IP for the business. Ensure IP ownership is clear, assignment is dealt with, responsibility for IP protection and infringement is set out. If someone creates IP for you, you must have an agreement with them that assigns you the IP. The best place to start is by reviewing any agreements with suppliers, customers and key personnel to ensure IP is dealt with properly.
The cost of not protecting IP
Leaving IP unprotected can result in an inability to stop competitors using your business’s IP, databases, even your logo. In the case of patents, failure to register means you could lose the right to use it and any profit that comes with its use.
Protection of IP is often a simple and inexpensive process. Businesses that truly understand the value of their IP assets, and how to protect them are more protected as they grow and ultimately sell for a higher value when they sell, claims Oakey.
Joanna Oakey is the founder of Aspect Legal and author of Buy Grow Exit www.buygrowexit.com.au.