In any business, your intellectual property (IP) is usually what makes you stand out from your competitors.
It could be anything from your logo to the software code of your tech product and even your company’s marketing material.
Since your IP plays a crucial role in keeping your business competitive, the last thing you want is someone stealing it.
So, you might be asking yourself: how do I protect my IP?
In Australia, there are four types of IP protection — trade marks, copyright, designs and patents (you can read about them in our IP guide).
Each type of IP is very different and has its own rules and processes.
This article will walk you through these various types of IP, how you can protect it (or transfer it), and where else you might come across IP concerns in your business.
What Are The Types Of Intellectual Property?
Intellectual property is usually made up of your business’ intangible assets that drive your revenue and define your brand.
There are four main ways you can protect your intellectual property — trade marks, copyright, designs and patents.
So, let’s go through them.
A trade mark is usually something unique that identifies your business, product or service.
This could include your logo, your business name, a product line or a catchphrase (you can even trade mark a colour!).
Before you start your business, it’s a good idea to ask yourself two questions:
- Am I infringing another business’ trade mark?
- Should I register my own trade mark?
Firstly, you should ensure as early as possible that you’re not operating with a trade mark that’s already registered under another business.
The last thing you want is another business taking action against you for breaching their rights. This could lead to a string of infringement notices, cease and desist letters and court proceedings — ultimately sucking up a lot of money that could have been saved by doing your research early on.
This action could also be quite damaging to your business’ reputation and finances, meaning that you’d potentially have to rebrand your business from the ground up.
You can avoid infringing another business’ trade mark by doing a quick search on IP Australia to check whether it is safe for you to use your brand.
This leads us to the second point: registering a trade mark yourself.
You want to make sure your business’ brand is owned exclusively by you so that nobody else can use it in the same way. You can do this by registering a trade mark through IP Australia.
Generally, a successful trade mark application gives your business the exclusive right to use that trade mark for up to 10 years in Australia.
And, if you’re thinking of expanding your business overseas, it’s also a good idea to explore international trade marks.
When you’ve come up with a creative business idea, you might then start to think of ways to protect it.
But you cannot protect just an idea.
Instead, copyright only exists in something that is expressed in material form. So, if you have a creative idea and want the benefit of copyright protection, you’ll need to put it down in some material form (like in writing, film, or even software code).
You may be confused because in other countries, like the US, copyright is a right that can be publicly ‘registered’ like a trade mark.
However, Australia doesn’t have a system of ‘registering’ copyright. As long as the unique idea is written down in some material form, the work is generally automatically protected by copyright.
So, what can you do to get the benefit of that copyright and ensure it isn’t infringed?
For starters, you can have copyright disclaimers across your website, book or other work to make it clear that you own that copyright.
You could also have strong IP clauses in your commercial contracts to protect your copyright from any party you do business with.
For example, if you hire a developer to create an app for your business, you’d generally want to make sure the copyright belongs to you. Ideally, you’d have a really strong IP clause in the Development Agreement to make this clear.
Similarly, you could insert strong IP clauses into your employment contracts, so that any work your employees create over the course of their employment is automatically owned by your business.
Since there are many different layers of copyright work and rules around it, it’s a good idea to speak to a lawyer to help you understand what kind of copyright protection you have and how you can uphold it.
So far we’ve spoken about protecting IP that is generally written down — but what about designs?
In Australia, you can register a design on IP Australia to protect your business’ particular unique design that makes it stand out from its competitors.
Whether it be the shape of your product or the sketch of a fashion item, it could be a good idea to register a design in IP Australia to prevent others from copying it and benefiting from it commercially.
There are multiple rules around designs, as well as minimum requirements on what can be registered as a design.
If you’d like a better understanding on how you can register a design and what kind of IP protection it offers, just get in touch with us!
If you’re developing a new invention or innovation, you might consider registering it as a patent through IP Australia.
A patent is a type of IP right that spells you out as the sole owner of a particular device, substance, method or process that you’ve created. It means nobody else can benefit from your creation for a set period of time.
In Australia, patent laws can be a difficult legal maze to navigate.
There are strict requirements for what can be accepted as a patent and the application process can be a headache.
Before considering a patent, it’s a good idea to speak to a lawyer to help you understand your options and whether a patent is right for your business.
What About Confidential Information?
Depending on who you ask, some lawyers like to think there is a fifth category of IP (even though it technically isn’t ‘property’ in that you don’t own it).
Confidential information works like IP in many ways and is equally important for your business — so it’s important to talk about it together with all the other IP.
Confidential information could include the trade secrets, client information, know-hows and technical expertise that you’re privy to in the everyday course of your business.
The last thing you want is someone finding out about that confidential information and using it in the wrong way.
This could breach your client’s trust in how you protect their personal information, and it could also potentially damage your business if your trade secrets fall into the hands of your competitors.
There are a few ways you can protect your confidential information.
For starters, many businesses like to use a Non-Disclosure Agreement (NDA) for general use in commercial discussions they have with anyone in the course of their business.
An NDA is essentially a contract where the party you engage with promises to not disclose any confidential information you reveal in that commercial discussion.
To protect you, a good lawyer will make sure all your commercial contracts contain solid confidentiality clauses.
If you wanted to know more about confidential information, we’ve previously written a more in depth article about this topic and why confidential information is important.
Can I Transfer My Intellectual Property?
In any business, there will be times where you’ll need to transfer IP.
Especially in the case of copyright, the original author generally has ownership rights to the copyright-protected work.
For example, if you had your logo designed by a graphic designer, they technically own that work.
So, it’s important to make sure your business does not breach any copyright-protected work and owns all its appropriate IP assets.
In this situation, you would normally put in place an IP Assignment Deed, which essentially transfers ownership of the work from the graphic designer to your business.
This way, your business would formally own the rights to its logo and you’ll be able to use it in any way you wish.
Alternatively, businesses can also let others use their IP in a way that doesn’t require them to transfer ownership. This is called an IP licence.
A licence is where the IP owner gives permission to someone else to use that IP for a certain fee and under particular conditions.
For example, if you want to grow your business’ brand but don’t have the resources to do so, you can let other businesses trade under your logo through a licence.
They would normally have to pay you a fee to do so, and you could set out particular conditions of the licence while still retaining ownership of that logo.
If your IP lies at the very core of your business, it’s a good idea to understand the implications of your business structure on how your IP is controlled.
For example, if you register as a company and make sure all the IP is held under the company, then the business’ IP stays within the company even if its shareholders and directors change.
This would be a different story with sole traders, where the IP moves with that sole trader.
A popular way for companies to really protect their IP is through what we call a ‘dual company structure’.
This involves registering two separate companies: a holding company and an operating company.
Under this structure, the operating company will be the entity that conducts business as usual. Meantime, all the business’ important assets (such as its IP) can be protected within the holding company.
This means that if something were to happen to the business, only the operating company would be affected. The IP would remain safely protected in the holding company.
A dual company structure can be tricky, but if you’re serious about keeping your IP safe in the company, speak to one of our lawyers!
IP Clauses in Contracts
While registering a trade mark or setting up a dual company structure are great ways to really protect your IP, you can also take steps to protect your ideas in your everyday course of business.
The best way to do this is by ensuring that your commercial contracts have strong IP clauses.
This means clarifying who creates the IP and who owns the IP.
For example, anyone who creates work under the course of their employment would generally not be the owner of that IP. Employment contracts normally have IP clauses that would ‘assign’ this IP to the business.
These kinds of IP assignment clauses are also quite common in other legal documents you come across in your business — from Shareholder Agreements to Development Agreements and even in the terms and conditions for your business.
So, whenever you engage any other stakeholder as part of a commercial relationship, it’s a good idea to make sure you have a contract in place that spells out how IP will be handled.
What To Take Away…
As you can probably tell, IP protection is a complex and very tricky area.
But it’s important to get it right, especially if your IP is central to your business’ operations and competition in the market.
There are many ways you can protect your IP — including through the four main types of IP protection, choosing the right business structure and having clear IP clauses in your contracts.
So, what’s the best solution for you?
It’s different for everyone, so we recommend you speak with one of our lawyers to help you understand your rights and obligations under Australian IP law and what you can do about it.
At Sprintlaw, we have a team of expert lawyers who specialise in IP across a number of industries.
If you need help understanding how you can protect your IP, we’re here to help!
Feel free to get in touch with us at 1800 730 617 or firstname.lastname@example.org.
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