If you have started a business, you may have heard of the importance of protecting your intellectual property (IP). It is crucial to understand which types of IP you can legally protect so that you can safeguard your business’ brand. This article will explain what IP is and the steps you should take to uphold your IP rights while working with other businesses.
What is Intellectual Property?
Intellectual property captures the creations, processes, inventions, designs or any other intangible idea that comes from your mind.
Using an artist as an example, a physical piece of artwork is something that the artist can sell. However, the artists’ IP lies in the:
- themes; and
- colours that they used to create the artwork.
The purchaser of the artwork becomes the owner of the physical artwork. However, they may not necessarily become the owner of the IP in the artwork. The artist, as the owner of the IP, can continue to use the same concepts and designs to create other pieces of art.
Using another example, you might purchase a particular piece of software and own the physical disk containing the software. However, this does not mean that you own the right to distribute the software or the source code behind the software itself.
What are Intellectual Property Rights?
Different types of IP have certain rights attached to them. IP rights are the rights that a creator has over their IP. These include the rights of creators to:
- alter their work;
- commercialise it;
- copyright protection;
- apply to register their work as a trade mark; and
- patent the IP.
These rights might also include moral rights in the IP. Moral rights are the rights of a creator for their work:
- to be credited to them if someone else uses it;
- not to be falsely credited to someone else; and
- to be safeguarded from derogatory treatment.
There may be instances where you can come together with another party and share your IP for a common purpose. However, you should always detail these agreements in a formal contract that specifies the ways that each party’s IP can be used. The contract should also outline who owns the new IP rights that result from combining each party’s IP.
IP Rights in Action
If you wish to form an agreement between yourself and another business to share your IP rights, you will need to consider a number of different legal factors. We have detailed these factors below by using the example of sharing IP within the marketing industry.
In this example, Smith Data Solutions (SDS) is in the business of providing data and market research analysis services. Their new client, Milson’s Marketing, wishes to engage SDS to provide these services. However, to provide the services to Milson’s Marketing, SDS needs to access Milson’s Marketing’s data and resources. This may mean accessing their IP. At the conclusion of the services, SDS will provide Milson’s Marketing with analysis and ideas which may contain SDS’s IP.
Looking from each party’s perspective, there are a number of different IP concerns that they will need to protect in their contract.
SDS’ IP Rights
To provide their analytical services, SDS may have developed certain types of IP.
For example, they may have created a unique way to compile and evaluate data.
SDS will need to provide certain solutions and reports to Milson’s Marketing which incorporate SDS’ IP. However, while doing so, they must make sure that their IP is protected. This will ensure that they can continue to use this IP for other clients in the future.
Therefore, SDS will need to grant Milson’s Marketing an irrevocable and perpetual licence to use their IP. This will not only ensure that SDS retains ownership of their IP, but will also allow Milson’s Marketing to use the reports and solutions. However, SDS should ensure that Milson’s Marketing should not breach any IP rights by clearly outlining that they are not allowed to:
- alter the reports;
- commercialise them; or
- allow third parties to use them.
Milson’s Marketing’s IP Rights
For SDS to provide their services, Milson’s Marketing needs to provide them with:
- certain data;
- business information; and
- internal business methodologies.
While Milson’s Marketing is happy for SDS to use this material to provide the services, they should ensure that SDS doesn’t use the materials for any other purpose. Therefore, they will need to grant SDS a limited, revocable license to their IP for the term of the contract. This will ensure that:
- Milson’s Marketing retains ownership of the IP;
- SDS can use Milson’s Marketing’s IP to provide the services; and
- SDS’s rights to use the IP will end when the contract ends.
Milson’s Marketing will also need to state that SDS cannot breach any IP rights that they have in the provided materials.
Your IP is the ideas and creations that come from your mind. As the holder of IP, you have to right to use it and commercialise it for your business exclusively. However, if you need to licence the use of your IP to others, you must ensure that your contract protects your IP rights from being taken. When considering what is best for your business, you should consider what you:
- want the other party to do with your IP; and
- need to be able to do with theirs.
If you have any questions about your IP, contact LegalVision’s IP lawyers on 1300 544 755 or fill out the form on this page.
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