Welcome to my three part briefing on Intellectual Property for Startups and Creatives.

Part 1 of my Intellectual Property briefing for Startups and creatives covers What is IP, IP types and Registrable vs Non-registrable IP. Part 2 will cover protection, people and IP and making money from IP. Part 3 will cover enforcement of IP and contentious matters.

WHAT IS INTELLECTUAL PROPERTY?

IP is a business asset which allows an organization’s innovations and creativity to be captured and managed to derive competitive advantage and income.  IP gives you a bargaining chip, because it captures an idea and turns it into an asset. Using IP is a property right in the same way as real property. You can sell, give and rent. You also have rights to keep people “off your property”. IP is a way of capturing innovation to provide a competitive advantage.  An IP strategy will sit amongst a number of strategies e.g marketing, financial strategies. IP is about managing both RIGHTS and PEOPLE.

Each jurisdiction has own IP laws and regulations. Most countries are signatories to treaties that let you file in one country at the beginning of process and extend later. Your main markets are the most important jurisdictions.

What is the best type of protection?

From IP Australia, “Intellectual property represents the property of your mind or intellect. It can be an invention, trade mark, original design or the practical application of a good idea. In business terms, this means your proprietary knowledge – a key component of success in business today. It is often the edge which sets successful companies apart and as world markets become increasingly competitive, protecting your intellectual property becomes essential.”

These are notes for an exam I have coming up this week, but I thought I would publish them here as a record to refer back to and in case any one else who reads my blog was wanting to learn about IP for their own intellectual creations.

PATENTS

• Temporary monopoly granted by the government to an inventor in return for disclosing the invention to the public.
• A right granted for any device, substance, method or process which is new, inventive and useful.
• Patents give effective protection if you have invented new technology that will lead to a product, composition or process with significant long-term commercial gain. Temporary monopoly as they last for 20 years (or 8 as an innovation patent, 25 years for a pharmaceutical substance).
• Patent applicants must provide a full description of how their invention works. This information becomes public and can provide the basis for further research by others.
• You must file for your patent before making any non-confidential disclosure.
• Most countries recognise first to file, in the US it is first to invent.
• Keep good records and file as early as possible.
• Patents are quite broad-ranging rights if someone does any of the following with your product or process:
  Makes, hires or sells, offers to make hire or sell, imports or retains the product for the purposes of doing any of these things they may infringe on your patent.
• In Australia there are 2 types of patent:
  1. Standard Patent – 20 years of protection (Newness and Inventiveness)
  2. Innovation Patent – Initially for 2 years, maximum 8 years of protection (Newness)
• You pay an annual maintenance fee after 5 years to keep your standard patent or after 2 years for the innovation patent. Usually due on anniversary of filing. Reminders are not sent, you can get a patent attorney or annuity firm to manage this.
• A patent involves:
  1) Specifications – how you built, it how it works. First purpose of this is that you have to give invention away at 20 years and secondly you always need to show that you can build the invention.  This stops people speculatively claiming things without showing patent office and courts how it works. They get published 18 months after they are first filed.2) Claims -  these are about what defines your legal monopoly. This is what everything is tested against in the patent office and the courts. What you are trying to do is claim as wide a market monopoly as possible.
• International convention that if you lodge within one year of priority date will be treated as lodged on priority date.
• For examples of what a patent specification looks like  or to view recent patent examples look at AusPat.
• Check out Patent fees in Australia here.

What can be patented?
“A mode or manner of achieving an end result which is an artificially created state of affairs of utility in the field of economic endeavour”.

Fig 1 – Standard patent application process (via IP Australia)

TRADE MARKS

• Trade marks are about protecting the goodwill in a business, protecting business reputation.
• Used to distinguish goods/services from those of other traders.
• It is a type of IP that is not about rewarding effort through an invention, but protecting a reputation that you built up in that mark. Customers associate that mark with your business. Words mean nothing on their own,  e.g Coke, it is the associations people make with them have value.
• A trade mark can be your most valuable marketing tool.
• A trade mark is not registrable if it is not capable of distinguishing your product/service from those of other traders in the marketplace.
• You should search trade mark records before using a new trade mark and before filing an application to register it, similar trade marks could block your application for registration. This search could also save you trouble and money by alerting you to existing trade marks and prevent legal action from the owners of similar trade marks when you begin using yours.
• You can use TM Headstart to check if your trade mark is registrable in Australia. TM Headstart provides an assessment to determine the suitability of your proposed trade mark for registration (before you make a formal application).
• It is difficult to register trademarks that:  denote the kind, quality, intended purpose (e.g “Chocolate” or “Champagne”) or value of the goods or services, are common surnames or geographical names; or conflict with an earlier trade mark, or would mislead the public about the nature of the goods or services. Made up words are best e.g Kodak. Some words are protected by law and cannot be registered as trade marks.
• A trade mark is a piece of property, you can sell a trademark.
• With trade marks there are no restrictions on using it before you register it.
• If you register you have primer facie rights over someone else.
• Takes a minimum of 8 months in Australia.
• Effective for 10 years and can be renewed with paying fees for further ten year periods.
• Must get protection in each country the trade mark will be used.
• Check out Trade mark fees in Australia.
• Madrid Protocol means that you can file overseas trade mark applications based on a home filing. You only file one overseas application which is then sent to every country you have designated. Can continue to designate, even years after first filing, but lose your priority date. This is much cheaper than international filings. Your overseas marks are dependent on the successful registration of your ‘home’ filing (in our case, Australia). Your home filing must remain valid for at least 5 years. If it does not, all your overseas filings will also fail. You can rescue the situation by converting to ‘national’ filings (but expensive). Also, you can only assign your Madrid Protocol trade mark to an entity that has a “real and effective establishment” in the country.

COPYRIGHTS

• You can copyright literary and artistic works. Writing, music, databases, coding software – copyright is broader than what people think.
• Compliations mean assemblies of information things like databases, any collection of information that has been put together for a particular purpose e.g Phonebook.  Any effort where someone has brought information together has copyright protection.  Yellow Pages was subject to copyright as someone has put it together and categorise it and put it in a certain format – this gives rise to copyright.
• Copyright protects the original expression of ideas, not the ideas themselves.
• Copyright is not registered in Australia.
• Copyright doesn’t protect you against independent creation of a similar work.
• Copyright for literary, dramatic, musical and artistic works generally lasts for 70 years after the end of the year of the creators death. Or 70 years from when it was first made public, whichever is later.
• You infringe by copying a substantial portion of the work. The guts or core of it.
• Material is protected from the time it is first written down, painted or drawn, filmed or taped.
• Individual creators have rights called “moral rights” whether or not they own copyright:
  Right 1: Even if you sell your song to Sony, they must attribute the work to you, you must be attributed as the creator of their work.
  Right 2: You have rights to take action if the right is falsely attributed to be someone elses work. If it is altered but attributed as if it was unaltered they can take action also.  Must make it clear that it is not the artists original work, is about keeping the artists integrity and allowing them to attributed for work they’ve created.
  Right 3: Take action if the work is distorted or is treated in a way that is predjudical to their reputation.
• Moral rights are equally important as if you are dealing with copyrighted material as a business, there are limitations in way you can use peoples work.
• Copyright material has protection under the laws of other countries who are signatories to the international treaties, of which Australia is a member.
• A copyright notice with the owner’s name and date is not necessary in Australia, but it can help prove your ownership of the copyright, and is necessary to establish copyright in a few overseas countries. It can also act as a deterrent to potential infringers.

DESIGNS

• A design registration is a Government monopoly that provides exclusive right to make and sell a product that includes the registered features.
• Design refers to the features of shape, configuration, pattern or ornamentation which, when applied to a product, gives the product a unique appearance.
• Not artworks, but objects designed to be unique, must be new (not identical to prior art) and distinctive (not substantially similar to prior art).
• You can register a design but it must be new and distinctive. Must be NEW (not identical to a design publicly used in Australia) and DISTINCTIVE (not similar to a design publicly used in Australia).
• Design registration is only useful if you have something very unique. If just small incremental improvements you may not get a lot out of it.
• A registered design can be a valuable commercial asset. Once your registered design is examined and certified, you have the exclusive and legally enforceable right to use, license or sell your design.
• Design registration protects designs which have an industrial or commercial use. Artistic works are covered by copyright legislation.
• The design registration protects visual appearance, not how the object works. Product or way it operates would be protected by a patent. Can get design and patent protection for one product.
• Registration initially protects your design for five years,  then you can renew the registration for a further five years.

CONFIDENTIAL INFORMATION/TRADE SECRETS

• Information you do not want in the public sphere in any way. Protection for processes, methodologies or other information that you wish to keep private. Info is treated as confidential due to conduct you have around that information.  Also referred to as trade secret.
• No registration and protection period is unlimited.
• A trade secret is both a type of IP and a strategy for protecting your IP. It can provide effective protection for some technologies, proprietary knowledge (know-how), confidential information and other forms of IP. Make sure you back up your trade secret with signed confidentiality agreements with every person who has knowledge of the secret. If an agreement is breached, you will have evidence of what was agreed and protection through the law.
• A trade secret strategy is appropriate when your IP is unlikely to result in a registrable right or if you want to retain exclusive use beyond the term of a patent. This strategy is appropriate when it’s difficult to copy the construction, manufacturing process or formulation from the product itself; that is when reverse engineering is unlikely.
• To be classified as confidential info:
  1) Not generally known to the public.
  2) Provide some sort of economic benefit. If it is just info you want to keep private for non-economic reasons you can’t sue someone under confidential information.
  3) Have been the subject of reasonable efforts to maintain secrecy.
• This requires very good internal management. Need contractual arrangements (non disclosure and non-competes are usually 1-2 years).Enter into confidentiality agreements with all technical employees incl consultants/contractors who create, develop or receive information. Have other contractual Arrangements  with staff e.g Non-disclosure and non-compete agreements.
• Owners should:
  -Label all confidential documents “Secret and confidential, June 2010, Company Name”
  -Keep all documents on the premises and store them securely
  -Restrict access to confidential docs
  -Supervise visitor entry into the premises
  -Inform employees of the importance of secrecy.
  -Limit # of employees with access to secret information.
  -Conduct exit interviews with employees.
  -Review and put in place document destruction procedures
  -Reviewing security
  -Document and date the above procedures and circulate them to employees regularly.
• Must also keep a good watch on the marketplace, as enforce any breaches as soon as you can to ensure that they are contained. You can seek damages, but you can’t call the info back so the question then becomes how do you do the best to stop things spreading.

CIRCUIT LAYOUTS

• A circuit layout is similar to a copyright, protects the actual layout of the circuit.
• You do not need to register to be granted the rights as the owner of a circuit layout design.
• The intellectual effort of creating a circuit layout is considerable and of great value.
• The owner of an original circuit layout has exclusive right to copy the layout in a material form, make integrated circuits from the layout and exploit it commercially in Australia.

PLANT BREEDER RIGHTS

• Plant breeder rights protect a particular species, varieties of plants (described by appearance, just needs to look different)
• Similar to a patent.
• Plant breeder’s rights give exclusive commercial rights to market the new variety of plant or its reproductive material.
• Protection lasts for up to 25 years for trees or vines and 20 years for other species.
• When you hold these rights you can direct the production, sale and distribution of the new variety, receive royalties from the sale of plants or sell your rights.
• To gain these rights you must show that the new variety is distinct, as well as being uniform and stable and demonstrate, by a comparative trial, that your variety is clearly distinguishable from any other variety, the existence of which is a matter of common knowledge.

REGISTRABLE vs NON REGISTRABLE INTELLECTUAL PROPERTY

REGISTRABLE

• Need to apply to gain protection
• Generally a lengthy process
• Stronger rights

Registrable IP types are Patents (inventions), design (appearances), trademarks (reputation) and plant breeder rights.

NON REGISTRABLE

• No need to apply for protection.
• More difficult to enforce.

Non registrable IP types are copyright (artistic creations), confidential information, circuit layouts, passing off (old law sort of like trademarks, one company tries to imitate what another is doing).

It is necessary to keep track of your IP, even if you engage attorneys or lawyers Files, databases etc. Registrable IP is fairly easy to manage as registration process provides a framework for management (to establish policy out of)

Non-registrable IP must also be managed, but through the tools of keeping good records, managing contracts and employees correctly. Risk of leaking if not accurately managed. Good employment contracts, educating and incentivizing employees.