Intellectual Property (IP) is the term given to ‘creations of the mind’. Like tangible property, owning intellectual property gives you an exclusive right to that creation. That is, owners of intellectual property have a right to stop others from using that property without their permission.

Intellectual Property comes in different types. The most common types are Copyright, Trade Marks, Patents, and Registered Designs. Business owners should be aware of the various types of IP and how it can be protected.

Copyright

Copyright is a ‘bundle’ of rights that applies to creative works, including literary or artistic works such as books, paintings, photographs, computer source code, etc., or to ‘subject matter other than works’, such as sound recordings, films, or broadcasts. Owning copyright allows you to stop others from publishing, modifying, adapting, or otherwise using the protected material without your permission. In Australia, copyright does not need to be registered.

Trade Marks

A trade mark is literally a ‘mark of trade’. It is a badge of origin that is applied to goods or services so that consumers can identify who made it or delivered the goods or services that the trade mark appears on. In most cases, a trade mark will be a name, slogan, or logo, but can also be a sound, shape, smell, colour, or aspect of packaging.

Trade marks can either be registered or unregistered. Registering a trade mark provides additional rights to the owner of the trade mark, such as the right to enforce the trade mark using the provisions of the Trade Marks Act 1995 (Cth). It is important to remember that not all trade marks are registrable. A trade mark needs to be distinctive in order to fill its function as a badge of origin.

Patents

A patent is a government-granted monopoly right to ‘exploit’ a particular invention. In order to obtain a patent, you must have an invention that is:

  • new (novelty requirement);
  • not obvious (inventive);
  • useful (capable of commercial application); and
  • be otherwise patentable (a manner of manufacture).

It is important to bear in mind that ideas or discoveries are not patentable – the invention must be a ‘manner of manufacture’. Whether or not an invention satisfies this requirement can be a difficult question, particularly for computer-based inventions.

Registered Designs

A registered design protects the visual appearance of a product and not its functional aspects. The most common examples are clothing, jewellery, or furniture designs, such as the pattern of a dress, configuration of a handbag, or look of a chair. For a design to be registered and protectable, it must satisfy a newness requirement similar to that which applies to patentable inventions.

What IP do I own?

The IP owned by a business will vary depending on the business. Almost all businesses will own, at the very least, a trade mark, even if the trade mark is just the name of the business. Other trade marks may include slogans, product names or logos.

Secondly, businesses will most likely own copyright, whether it is the content on a website, other promotional and/or marketing material (catalogues, flyers, photographs, etc.), documents or other material produced for customers, internal documents, and/or software developed in-house.

In some cases, businesses may also develop new technology that may be capable of protection by a patent. As mentioned above, this will be the case where an invention is new, inventive (not obvious), capable of commercial application, and a ‘manner of manufacture’.

Lastly, businesses may have an interest in registering designs of products that they may produce. As noted above, registered designs protect the visual appearance of a product, not its functional aspects. Businesses should carefully consider what IP they own, and if there is any doubt, consult a professional to help them determine what IP they own and how to best protect it.

Do I need to protect it? What will happen if I don’t?

Not all IP is equally valuable, but IP is an important part of a business’ value. In the case of copyright, protection exists automatically, so protection involves carefully monitoring for infringement and addressing it if copyright infringement does arise. Where the IP is a trade mark, there is no requirement that a trade mark be registered, but a trade mark will be much easier and less expensive to protect if it is registered. Protection of an unregistered trade mark relies on the business’ established reputation in respect of the trade mark, whereas no reputation need be established in the case of infringement of a registered trade mark.

In the case of patent and design registration, business owners should carefully consider the commercial value of their design or invention. If the newly created design or invention is likely to be commercially successful, and it is possible that other parties may seek to duplicate the design or invention, it may certainly be worthwhile registering a design or patent.

Many businesses carry on for many years without registering their trade marks, or monitoring their competitors for copyright infringement, or registering their designs or inventions. In some cases, however, third parties have been able to capitalise on this and develop their own competing products or brands that would have otherwise infringed a registered IP interest. Assessing the cost of protection against the likelihood and cost of infringement, is an important commercial decision for business owners to make.

How much does it cost to protect?

The cost of protecting IP varies depending on the type of IP and the complexity of each case. Costs include both registration costs, as well as the cost of monitoring and enforcing infringement.

Copyright

In Australia, there’s no system of registration of copyright, and there is no need to register copyright in order to obtain protection. Copyright exists when the protected material is created or made. As such, there is no cost to obtain copyright protection. Business should, however, ensure that employment contracts deal with IP (including copyright) to ensure that any IP created by employees remains or becomes the property of the employer.

Monitoring for infringement, however, can be difficult if the material is complex. This is particularly the case where the copyright material is difficult to search for, used in a manner that isn’t always visible, or used by unknown parties. In the simplest of cases, monitoring for online infringement can be obtained for as little as $100 a month. In more complex cases, deeper investigation by a private investigator may be required.

Trade Marks

Australian Trade mark registration (lasting ten years, renewable) can be achieved with professional assistance for as little as $1000 in the most simple of cases.

Trade mark registration can be quickly become complicated where the goods or services being provided are more complex, or where there are issues in gaining acceptance of the mark. For example, if a mark is not distinctive, or where it is similar to a previously registered or pending trade mark, it may be difficult to obtain registration, and require submissions or evidence of use in order to obtain acceptance of the trade mark. In more complex situations such as this, fees can range from several thousand dollars for the application, in addition to fees payable in addressing complications that arise during the registration process, and finally registration fees.

In the case of international trade marks, facilities exist that reduce the cost of obtaining protection in multiple jurisdictions. This facility, known as the Madrid Protocol, is not available for all countries, or in all circumstances. It is important to speak with a trade mark professional to determine the feasibility of and likely fees for trade mark protection.
Trade marks are a valuable piece of intellectual property, and it is almost always worth an initial investment to assess registrability, with the option of considering whether to prosecute the application further at a later date if it proves to be more complex in nature.

Patents

Patent protection can be expensive, so it is important to assess the commercial viability of the invention thoroughly early on to make sure the invention is worthwhile. Simply obtaining patent registration does not guarantee commercial success.

Fees for patent registration vary significantly depending on the type and nature of the patent, and the amount of work required to prepare the specification to a standard that will be accepted. Typically, fees will start at roughly $10,000, but can quickly escalate depending on the amount of ‘prior art’ cited against the patent, and the jurisdictions in which protection is required. If you are considering patent registration, it is first important to develop a roadmap detailing the possible routes towards registration and the costs along the way.

Designs

Business owners should budget between $5,000 to $10,000 for design registration in Australia, in addition to fees applicable in other required jurisdictions. Typically, these fees are the range of $10,000-$20,000 per country but can vary significantly between jurisdictions.

In Summary

Intellectual Property is a valuable asset for any business. It is crucial for business owners to understand what intellectual property they own, how to go about protecting it, and the costs involved.

Daniel Smith

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