How can franchisors protect their intellectual property (eg, trademarks and copyright)?
Intellectual property owned by the franchisor may include:
- trade names;
- patents; and
- know-how (commercial secrets).
Trade name and corporate name certificates are required by the National Register of Corporate Bodies before the incorporation of a company. The issuance of a trade name certificate provides the applicant with provisional protection over the trade name for a three-month term. This protection prevents other applicants from requesting a similar trade name certificate. Trade names are also protected if the applicant has already registered a trademark with the Industrial Property Institute which has been communicated to the register.
At national level, trademarks and logos are protected by the Industrial Code. In order to register a trademark or logo, the franchisor must file an application before the Industrial Property Institute. Trademarks and logos may also be registered at a European level with the European Union Intellectual Property Office.
Portugal is also signatory to the World Intellectual Property Organisation (WIPO) Madrid Agreement Concerning the International Registration of Marks 1891 (the Madrid Agreement) and the WIPO Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks 1989 (the Madrid Protocol).
Copyright protection aims to protect the author and the work produced by the author as an original creation of the human mind. Copyright protection generally protects literary, artistic, dramatic and musical works. Copyright provides protection for the author’s rights, which includes moral and economic rights. The scope and exercise of the economic rights must always respect the author’s moral rights.
Copyright protection is not subject to registration and arises as soon as a work is created. However, in order to provide evidence, some authors and associations of authors choose to voluntarily register their works, usually in domestic associations which register such works.
Designs and patents may be protected at national, European or international level.
Must IP licences be registered?
Licences to use registered intellectual property (eg, trade names, corporate names, trademarks, logos, patents and designs) must be made in writing and should be registered in order to be opposable to third parties.
How can franchisors protect their know-how and trade secrets?
Know-how protection in Portugal is limited. Unauthorised use of know-how by persons other than the rights holder may be regarded as unfair practice and a violation of the trade secret. Consequently, administrative fines may be applied whenever the know-how:
- is secret and measures have been taken to maintain secrecy;
- has commercial value; and
- is transmitted without the owner’s consent.
What are the consequences of a franchisee’s breach of the franchisor’s IP, know-how or trade secret rights and what remedies are available to the franchisor in this regard?
The franchisor may terminate the franchise agreement and seek indemnity.
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