Why are Intellectual Property Rights Important?

Organizations that are constantly innovating to create new products (or to improve existing products) will need to consider how they are protecting those newly created (or improved) assets. One of the ways that they can do so is by ensuring that they own the relevant intellectual property rights.

Intellectual property (“IP”) refers to a set of intangible assets that, when owned by an organization, legally protect that organization’s creations from being used by anyone else without the organization’s consent. Protecting an organization’s IP rights is therefore important to prevent theft or duplication by potential competitors. IP rights give organizations a competitive edge by fostering innovation, advancing technological progress, and ensuring that they are fairly compensated for the effort they put into developing new creations. Due to the high stakes involved and value associated with IP rights, organizations should ensure that their information governance programs appropriately address IP records.

What are the Information Governance Strategies to Consider for IP Records?

An effective information governance program is vital to ensuring that an organization classifies and manages its records, including IP records, in a legally compliant manner, and provides proactive risk mitigation measures to reduce costs and address disputes, claims and litigation. In the course of filing for, maintaining, and generally protecting IP rights, an organization generates various records required to evidence its ownership of those IP rights, as well as records related to an organization’s efforts to protect its IP.

Organizations should consider developing and updating their records retention schedules to incorporate records related to (i) evidencing their IP rights; (ii) securing their IP rights; (iii) contractual relationships and litigation pertaining to their IP; and (iv) administration, research, and use of their IP.

Most jurisdictions do not provide specific mandatory statutory retention requirements for IP records. In the absence of such statutory requirements, organizations should also consider the following best practices when determining appropriate retention periods for their IP records:

  • Retain essential records that evidence IP rights on a permanent basis or at least the “life of the entity.”
  • Retain records generated during the IP protection process for the statutory duration of the IP right. The duration of the IP right will vary depending on the jurisdiction and type of statutory IP right:
  • Retain IP-related agreements, contracts, infringements, claims, demand letters, and litigation records for the duration of an applicable statutory limitation period commencing from either the “date that the agreement/contract is terminated” or “from the date that the matter is resolved.” In setting retention rules for such records, organizations should first consider IP-specific limitation periods. For example, in the U.S., the limitation period for civil actions for copyright infringement claims is 3 years after the claim accrued (17 U.S.C. §507). When applying an IP-specific limitation period, it is important to ensure that it relates to the particular type of IP asset.
    • That said, in some jurisdictions, statutory limitation periods for contract/tort claims are considered applicable to certain IP-related claims. For these jurisdictions, the statutory limitation periods for contract/tort claims (i.e., claims for damages) typically range between 3 years and 10 years.
  • Retain records on administration, research, and use of an organization’s IP (i.e., meeting minutes, presentations, internal memos, etc.) for the duration that the record provides value for the organization (i.e., until project completion, for strategy meetings, etc.). Organizations may set an “indefinite” retention rule for these types of records based on a business decision to review and assess at set intervals (i.e., after 1 year, 5 years, etc.) and, if there is no further ongoing value, delete the records, subject to applicable privacy law requirements and any legal holds.

Organizations will differ in their approach to records retention schedules (i.e., local, regional, or global) and classification schemes (i.e., big-bucket or granular), which may result in the co-mingling of various different types of IP records. Regardless of their approach, when setting retention rules for IP records, from a risk mitigation and legal compliance perspective, organizations should ensure that they adhere to the longest of the various retention period thresholds, if not applying a “permanent” best practice.