It is essential that you adequately protect your intellectual property (IP) because it can be incredibly valuable for your business. You want to protect your brand image and the products you have created to secure your reputation and profitability. One way to control the use of your IP is to include a clause in your sales terms and conditions. This means when customers visit your website or purchase a product, you should inform them of their rights and obligations regarding your intellectual property. This article will: 

  • explain the concept of IP; and 
  • outline the principles you should consider when drafting an IP clause in your sales terms and conditions.

What is Intellectual Property?

IP refers to your rights over the creative work that you have produced. While some laws protect people and property, laws about IP protect creations of the mind. This includes all kinds of intangible property, such as:

  • inventions;
  • literary and artistic works;
  • designs;
  • symbols;
  • names; and 
  • images used in commerce.

There are many ways you can protect your IP under the law. For instance, you can trademark your business’ identifying features to prevent others from copying or impersonating you, such as your:

  • name;
  • logo; and
  • slogan.

You can also patent inventions or claim copyright over software or artistic work.

However, the scope of IP extends beyond these mechanisms. Your trade secrets and confidential information should also be protected as much as possible. Protecting your IP in this way enables you to earn recognition or financial benefit from what you invent or create. 

The Extent of Your Intellectual Property

Your sales terms and conditions should make clear the extent of your business’ IP. This will ensure that your customers are aware of the extent that your IP is protected. Setting clear boundaries will help to: 

  • prevent infringements, inadvertent or otherwise; and
  • preserve your interests if you wish to pursue a legal claim.

Therefore, the clause defining IP should be broad so that it does not limit your IP rights. You do not want to restrict your protections to a specific list, but rather provide a guide to make your interests clear.

For example, the wording of the cause should begin with “Intellectual property includes but is not limited to…” This allows you to expressly list the IP most relevant to your business without limiting your protection.

Protecting Registered and Unregistered Intellectual Property

Your clause should intend to cover every area of IP, whether you have legally registered it or not. This will allow you to protect your creative works regardless of whether they have been formally logged as a patent or trademark. 

It is also essential that you clearly extend your IP rights to any violation that could occur in: 

  • other Australian States and territories; 
  • or overseas. 

This is because each geographic area, or jurisdiction, is bound by a different law. New South Wales (NSW) has different laws to Victoria (Vic), just as Australia has different laws to China. You want to clarify that your IP rights will apply under the equivalent laws in each of these areas.

For example: “All present and future rights to intellectual property including inventions and improvement, trademarks (whether registered or common law trademarks), patents, designs, copyright, and corresponding property rights under the laws of any jurisdiction.”

Cover Every Form of Intellectual Property

Intellectual property comes in many forms. This includes types of IP that are difficult to register but are still extremely valuable assets to your business, such as:

  • trade secrets;
  • data; and
  • confidential information.

You must safeguard all forms of IP in your sales terms and conditions so that your business’ ideas and processes are correctly protected. 

The protection of a concept or idea will likely be more difficult to enforce than copyright or trademark rights. However, including this provision will strengthen any claim you may bring against a customer who breaches this provision. 

For example: “All rights in respect of an invention, discovery, trade secret, secret process, know-how, concept, idea, information, process, data, formula, or work product.”

Ensuring Certainty in the Intellectual Property Clause

For completeness, it is vital that you clearly specify whose intellectual property is being protected by the clause.

For example: “All work products developed in whole or in part by [your business].”

While this clause seems quite obvious, it is useful because it goes towards protecting your business against users of your website looking to copy your products, such as through:

  • counterfeiting; or
  • imitation.

Protect Your Company Brand

In addition to protecting your products under your sales terms and conditions, you should also consider your company brand. This can resolve issues such as unauthorised use of your logo and branding. 

To achieve this, you should just include a provision that clearly states that your business owns the exclusive right to use all of your branding materials.

For example: “[Your business] owns all intellectual property rights in the products and company branding as between you and us.” 

Key Takeaways 

Properly protecting your IP is what makes your IP a valuable commodity for your business. This is because it ensures that you have exclusive control over the use of your creative works, therefore safeguarding your brand and profitability. Your IP clause should: 

  • provide a broad definition of IP so that your rights are not limited;
  • cover all kinds of IP, whether or not they are registered;
  • protect violations of your IP rights in other jurisdictions;
  • provide certainty as to protect all products developed by your business; and
  • secure your company branding.

If you would like professional assistance drafting an intellectual property clause, contact LegalVision’s IP lawyers on 1300 544 755 or fill out the form on this page.

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