intellectual property rights

Intellectual property rights are intangible rights. The rights are negative in nature, which means that the owner of the rights is entitled to prevent third parties from doing the acts which are reserved to the owner. Each form of intellectual property right is designed is protect particular features of new materials for which the relevant intellectual property right has been designed. We have prepared a list of intellectual property rights.

Common Elements of Intellectual Property Rights

The common features of the different forms of IP protection are that they all:

1. are able to be incorporated into a company's products and services so as to create offerings which are less  readily copied by competitors and create barriers to entry to a market;
2. are personal property rights which may be bought and sold like any other property;
3. apply concurrently and independently of one another. If the subject matter qualifies more than one form of protection, each of those forms will serve to protect the material in which the IP rights vest;
4. allow the owner of the rights to recover damages or an account of profits for infringement, and interest on those awards from the date that the loss was suffered or profit was made;
5. permit the owner to restrain infringers from continuing to infringe the rights in the future, by the grant of an injunction, provided the circumstances of the case are such that the relief falls within the bounds of tests for equitable relief and the Court elects to exercise its discretion to grant an injunction; and
6. may lead to an award costs to the claimant for the expense incurred by the IP rights owner suing the defendant for infringement;

7. may be used as a security interest, such as for a fixed and floating charge, legal charge and debentures, save for confidential information;

8. are able to be licensed to others to use for some form of contractual consideration;

9. restrict third parties using the IP without the licence of the intellectual property rights owner.

Examples of how intellectual property rights work to protect relevant materials include:

1. Copyright
   An author writes a book. When a person purchases the book, she purchases a copy of the book, and not the copyright in the book. The purchaser is not entitled to then copy the book, as that would be an infringement of copyright.
2. Registered Trade Marks
   A business registers a trade mark in the UK. The business is able to prevent third parties from (1) registering the same or confusingly similar trade marks in the UK and in countries and territories which are members of the European Union, and (2) applying the trade mark to the same or similar goods or using in the trademark association with services.
   Trade marks are usually used to protect words, business names, names of goods and services, logos, combinations of these to uniquely identify and distinguish hoods and/or services from those of competitors.
3. Unregistered Trade Marks
   As a business trades and engages in selling goods and services, the public become familiar with the goods and services of the business. In English law, this reputation and goodwill may be protected against competitors conducting business in a way which holds its business out to the consuming public as the business that owns that goodwill, and causes economic loss and damage to the business as a result, whether by diverting trade to the competitor or diminishing the value of the established goodwill.
4. Designs
   A business produces a part of a seat, or a whole seat, which has original aspects of shape and configuration, such that is the independent design of the designer and is not comprised of excluded subject matter for designs protection. The business is able to restrain other businesses from copying the seats or parts of seats made to the design, or other articles which have a similar appearance to the design.
5. Patents
   An inventor applies for and obtains a registered patent for a product or process which is novel, inventive, it can be used in industry, and is not excluded patentable subject matter.  Third parties may be prevented from offering to sell, selling, importing or keeping products or products made using the patented process in the UK and other relevant territories.
   Patentable inventions typically include useful processes, machines, compositions of matter (such as alloys, agricultural products, pharmaceuticals), as well as any new or useful improvement to existing products and processes.
6. Trade Secrets and Confidential Information
   Formulae, compilations of information, the product of research and development, and any practically any other commercially sensitive information which is not trivial.

The negative rights define the extent of activities which an owner of intellectual property rights is able to prevent others from performing. The extent of the activities which are able to be prevented are reflected by the difficulty in obtaining the rights in the first place. For instance, patent protection provides an absolute monopoly in respect to the product or process which has been registered.

Copyright and trade marks on the other hand grant the IP rights owner a qualified monopoly, in that not all dealings with the copyright work or trade mark are able to be prevented.

The extent of the qualifications and limitations to the monopoly for each intellectual property right is unique to each right and are considered in isolation to the other rights. For instance, on one hand patent protection which requires a formal application and registration which may be time consuming and costly, on the other copyright applies automatically.

Why IP Rights Exist

IP rights reward investment of time and/or capital invested by those creating the particular type of materials which are protected by the rights.  Accordingly, IP rights serve as an incentive to those looking to invest research and development capital to produce new products or materials.

If it was the case that intellectual property rights did not exist (and where any intellectual property have lapsed), the legal bases to prevent (1) copying of protected goods, services, business names and other materials, or (2) competitors pretending that they are the originator of the materials would be greatly reduced.

Qualities of Intellectual Property Rights

Intellectual Property Rights are personal property. Accordingly, the intangible rights are able to be sold, licensed, assigned, hired, mortgaged and used as security, like any other property. 

The qualification criteria for each of the types of IP are different, at least because the nature of the negative tights which they grant the owner. Also, a single object may be amenable to more than one form of intellectual property protection. For example:

1. A logo for a business may qualify as a trade mark, and qualify for copyright protection (assuming it is an artistic work); and
2. A product which is protected by a registered patent may also qualify for protection as a design. For instance a glass which is protected by a registered patent may also have an original shape.

Trade Marks

Trade marks are usually used as a tool to secure protection for unique business names and brand names, whether the brand names are for products or services. They are also able to be used as designations of the origin of packaging and sounds, provided they are distinctive in the sense that they are able to distinguish the goods and services of the business from all other businesses.

Any sign capable of distinguishing the goods and/or services of one business from others is able to be registered, provided it is able to be represented graphically.  Signs are able to consist of letters, numerals, the shape of goods, packaging (ie shapes of containers), slogans, colours, scents, sounds and gestures.

Certification Marks

Trade marks can also be used as certification marks, which is a designation that the goods or services meet a known and defined standard of quality. Certification marks are held by companies or associations which do not trade themselves, and license the use of the certification mark to others, so as to indicate the goods or services produced by that other company meet the standard set by the certification, such as the Woolmark.

Collective Marks
Furthermore, collective marks are used to designate goods and services of its members from those of other businesses. Accordingly associations of businesses in the same industry, such as manufacturers of boats, plumbers and stationers to indicate that they are associated with one another.

The common element to trade marks, collective marks and certification marks is the unique identification of source of the goods or services produced.

The exclusive rights of the owner of a trade mark are:

1. to use the same and similar trade marks in respect of (a) the goods and services in respect of which it is registered, and (b) similar goods and services to those registered, each in the case where a likelihood of confusion would arise;
2. to prevent use of the trade mark in respect of goods and services which are not similar and to do so would damage the reputation of the trade mark, and is without due cause, takes unfair advantage of, or is detrimental to, the distinctive character or the reputation of the trade mark.

Relevant uses for the purposes of infringement include (1) applying the trade mark to goods, or their packaging, (2) offers for sale, advertises, labels or sells goods under the trade mark, or (3) uses the trade mark in relation to the supply of services.

Patents

Patent protection grants what is known as an “absolute monopoly” upon registration over inventive implementations of industrial processes that achieve an industrial result or inventive products.  The exclusive rights of the patent owner (which defines the monopoly of the owner) is said to be absolute as it prevents any dealings in the patented invention, which include:

1. manufacturing, offering for sale, selling, importing, or keeping goods;
2. using patented process, offering the process for use; and
3. offering for sale, selling, importing, or keeping products made using a patented process.

Copyright

Copyright on the other hand vests automatically on the creation of works protected by copyright, provided the work is original and was the independent work of the author; there is no registration process.  The trade off for this automatic protection is that the author is granted a qualified monopoly.  Protection for copyright extends only so far as the expression of the particular work created by the author.  It will not protect the idea conveyed by the creation.

The exclusive rights of the owner of copyright are to:

1. copy the work;
2. issue copies of the work to the public;
3. rent or lend the work to the public;
4. perform, show or play the work in public;
5. communicate the work to the public; and
6. make an adaptation of the work or do any of the above in relation to an adaptation.

Design Rights

Design rights have the greatest degree of variation across different countries.  The key concept is that designs law protects appearance of products.

There is no requirement for products or articles made to the design to be aesthetically appealing, and functional designs are protected.  In the UK there are 4 forms of design rights, those being:

Registered Designs

Registered Designs protect the appearance of the whole or a part of a product resulting from the features of, in particular, the lines, contours, colours, shape, texture or materials of the product or its ornamentation, which:

1. is new, namely that the design differs only in immaterial details with previous designs;
2. has individual character, in that the overall impression the design produces on an informed user differs from the overall impression produced by any design which has been made available to the public prior to being disclosed to the public.

Excluded from protection are parts of designs which:

1. are solely dictated by the product’s technical function; or
2. must match or must fit parts of the design.

The exclusive rights of the owner of a registered design are:

1. to use the design and any design which does not produce on the informed user a different overall impression; and
2. make, offer, offer for sale, import, export, use a product in which the design is incorporated or to stock articles made to the design for such purposes.

Copying is not a prerequisite to infringement of registered designs.

UK Design Right (unregistered design)

This form of design protects any aspect of shape or configuration of the whole or part of an article. This (unregistered) design right excludes protection for:

1. methods and principles of construction;
2. features of shape or configuration which must match or must fit another article so that the design can perform its function;
3. surface decoration; and
4. commonplace designs in the relevant design field, that is designs which are not original – not copied and different to other designs in some respect.

Design Right in the UK lasts for up to 15 years; where articles made to the design are made available for sale or hire within five years of the creation of the design, the term of protection is 10 years.

The owner of design is the designer in most cases and where the designer is employed, the employer. It used ot be the case until late 2014 that where the design is commissioned, the commissioner owns the design. Now, ownership has been aligned with the rules which apply to first ownership of copyright.

In some cases, the owner may be the importer, depending on where the designer is located. Where a registered design is transferred to another person, the unregistered design right is presumed to be transferred as well unless a contrary intention appears in the contract.

The exclusive rights of the owner of an unregistered design are:

1. by copying articles made to the design or substantially to the design, or
2. by making a design document recording the design for the purpose of enabling articles to be made.

Importantly, intervening acts which do not infringe the design are irrelevant when assessing whether the exclusive rights of the owner have been infringed.

Registered Community Design is similar to the UK Registered Design, as with the Unregistered Community Design. These European Community rights apply uniformly across the 27 countries of the European Union. As a result, an infringement of one of these Community rights in any country or territory of the European Union is an infringement of the right.Unregistered Community Design has a duration of protection of 3 years.

Confidential Information

In most jurisdictions around the world, protection is granted for unauthorised disclosure and misuse of information that is known to be confidential or reasonably assumed to be confidential. 

In a business environment, instances of confidential information include:

1. business plans;
2. information relating to new or existing technologies;
3. company reports;
4. internal memoranda;
5. practically any information which is commercially sensitive.

Remedies are available where the defendant has used confidential information directly or indirectly which has been obtained from a claimant, and knows or ought to have known that the information was/is confidential.

Law of confidential information also protects confidential communications, such as conversations, as the law of confidential information protects the information itself and not the form of the information. Information passing between persons in recognised categories are assumed to be confidential, such as employee/employer; doctors and other medical professionals in relation to patients; priests and penitents; accountants, lawyers, and bankers with clients; communications between fiduciary and principals; business partners; directors with respect to affairs of the company.

Licences of IP Rights

As the nature of intellectual property rights are negative, licences (or permissions) granted by the intellectual property rights owner allow third parties to perform the acts which are (1) otherwise reserved to the intellectual property rights owner, and (2) would be an infringement if it were not for the grant of licence. There are three main types of licence for intellectual property rights:

1. a non-exclusive licence where the licensor retains the power (1) to grant licences to other people for that relevant right, and (2) to exploit the relevant right himself - ie potentially unlimited number of licensees;
2. a sole licence where the licensor agrees not to grant licences to any other people, but retains the power to exploit the relevant right himself - ie two users only;
3. an exclusive licence where the licensor agrees not to grant licences, and not to exploit the relevant right himself - ie one licensees only.

Closing Comments

Intellectual property rights play an integral part business and manifest themselves in the most important aspects of business,  which include:

1. the internal administration of businesses which allow it to protect its own interests, and
2. its interactions with the outside world to protect its reputation, trade dress, and the exclusivity of its products and services.

Most business value its unique trading presence and name. Registered trade marks serve to protect the trading names, find value in the balance sheet, of goodwill, and is the intellectual property right which protects the goodwill of the business. 

Copyright protects stock in trade for many businesses, such as literature, photographs, marketing materials (including website content) and software, whether the business functions as a provider of goods or services. 

Confidential information, which can be the life blood of months of research, protects testing and experimentation for new techniques and know-how, company information that create a competitive advantage. 

Patents serve business by preserving a corner of the market for exclusive rights and exploitation as a result of research and development which result in products or processes which are new and inventive.