It goes without saying that entrepreneurs want to grow their business as quickly and effectively as possible. However, many people fail to realise the integral role that intellectual property plays in the formation, expansion and protection of their business.
We have put together five key tips to help you manage your intellectual property correctly from the beginning.
Know the difference
Although the terms are now ubiquitous, many people don’t understand the difference between a trade mark, patent, design and copyright. To make your life easier, we’ve provided a brief overview of these mainstream types of IP.
A sign that is used by a trader to distinguish its goods or services from those of other traders. For instance, your brand name, or your logo, are your trade marks. Registering a trade mark is an important step to protect your business’s reputation.
A temporary monopoly (or exclusive commercial right) to use an invention for a specific period in exchange for public disclosure of that invention. For example, if you invent a novel and inventive way of extracting olive oil, you could be granted a patent to protect and commercialise your invention.
The overall appearance of a product which results from one or more visual features of the product, such as the shape, configuration, pattern and ornamentation of the product. If you think up a gorgeous new and distinctive shoe design, you can protect your design.
A bundle of economic and moral rights in original works. Copyright does not protect ideas, but rather the expression or form of ideas in a material form. If you take a photograph, you generally own the copyright in the photograph.
Many entrepreneurs fail to realise the importance of registering their business’s intellectual property.
For example, use of a trade mark does not necessarily equate to ownership of that trade mark, and, more importantly, does not prevent others from using the same or a similar trade mark and benefitting from it. This means that if you own a successful fashion business called “Accelerate Fashion”, unless you’ve registered your trade mark for that name, it will be more difficult for you to prevent other traders from using the same or similar brand names for their business, and capitalising on the reputation you’ve worked hard to develop!
It is imperative that you register your important trade marks, patents and designs. An exception to this rule is copyright, which doesn’t need to be registered – you own copyright in your original works automatically upon creation.
Ownership of IP assets ordinarily lies with either the creator (in the case of copyright) or the registered owner (in the case of trade marks, patents, and designs) of the asset. This means that whoever creates, for example, the code for the business’s website, or writes the blog articles which generate revenue or develop a reputation for your business, will generally own the intellectual property rights in them. If someone other than yourself has created those things for you, you should be careful to have the IP rights in those assets properly assigned to you, or the relevant business entity, for example, your company.
You are the company you keep
A company is a popular business structure in Australia. It is a distinct legal entity that is separate from its shareholders (the owners of the company) and its directors (the managers of the company). A company structure gives the people running the business (and their assets) some protection from liability for their actions while running the business.
As there are several business structures, each with benefits and disadvantages, you should work out which structure best suits your requirements. Seeking advice from a lawyer or accountant can be useful, especially for the more complex structures such as trusts and partnerships.
Don’t go overboard
We understand that funds can be tight when you are just starting up. That’s why it is important to invest your funds to register/protect your most important IP assets before seeking to protect/establish rights in the non-essential aspects of your business.
For example, If you have five different trade marks that you would like to use on your products, but your cash flow is more of a cash trickle at the moment, whilst not ideal, there is little utility in spending money on multiple registrations that you may not use in the near future. Put that money to better use and only register what is important to your business in the short term.
An IP lawyer can help you prepare a long-term IP strategy for your business.
Get your branding right from the beginning
A common mistake that we see people make is adopting a business or company name and proceeding to use that name on their goods or services without first checking to see if the name is available as a business name and as a trade mark. Registration of a business, company or domain name is a separate process to trade mark registration.
This mistake sees people develop a brand reputation around a trade mark that they then cannot register.
It is also important to consider that using a trade mark which is too similar to another trader’s trade mark, even inadvertently, can constitute trade mark infringement, passing off and/or breaches of the Australian Consumer Law, which may expose you to claims for damages and accounts of profits.
It is essential therefore to get advice about your proposed brand before you start using it. Once again, an IP lawyer can advise you on the suitability of your brand name from the outset.