A business’ intellectual property is one of its most valuable assets. It’s hardly surprising that one of the most common enquiries we receive at LegalVision is how to protect a business idea. As a general rule, an idea itself doesn’t have protection, only the way you express the idea. There are also different types of IP protection that are suitable for various aspects of the business. Business owners should then consider what aspects of their idea can attract intellectual property (IP) protection and by what means.
If you have invented a new system or process that you know will catch on, you should invest your time and money on branding. As you build your reputation, customers will increasingly associate your business with the new method you have established.
You should consider registering a trade mark to protect your brand. A registered trade mark will give you the exclusive right to use the business name or logo in association with your business. In this way, even if you can’t use the business method exclusively, it will become synonymous with your branding. When it comes to trade marks and branding, the more you use it, the stronger the protection.
Patent and Design Registration
Some businesses have developed a product or system that may warrant patent or design registration. A patent protects the function of an invention which contains a novel feature that the has not yet been seen or used in the industry. Design registration protects the aesthetics of a product. The design must also be novel.
The purpose of registration is to give the owner the exclusive right to commercialise the product for a particular period, before allowing other members of the public to start creating and selling a similar product.
Business owners frequently contact us wanting to patent their business model. This is possible where the method uses a physical device in a substantial way to make the method useful. If you use technology but only in an incidental way, then it would not be patentable. For example, Uber has filed for many patents in the US. While they may not be able to claim protection for their model of connecting drivers and passengers, the technology or specific features of the technology that makes this service possible may be patentable.
Copyright automatically protects the original expression of an idea (for example, writing and literature, music or art). Importantly, copyright does not protect the idea itself. As such, another party could potentially use some of the ideas or concepts behind your work to produce their own material.
In Australia, copyright is automatic meaning you do not need to register to receive protection. You should, however, use a copyright notice on your material so that others know that you own the copyright. This notice along with your terms in the contracts you enter into should protect your copyright.
Parties typically use a confidentiality agreement or non-disclosure agreement to protect information disclosed before entering into a contractual relationship. For example, a business owner may meet with a software developer to explain their concept before engaging the software developer’s services. You should use this agreement for these early stage discussions to ensure the other party doesn’t use the information you provide for their own purposes.
Clauses relating to confidentiality and intellectual property are important in an employment agreement. For this reason, you do not usually need a separate confidentiality agreement for your employees. Their employment agreement binds them to confidence, and this usually extends beyond their term of employment.
Employment agreements may also address trade secrets. A trade secret is any confidential business information which provides a company with a competitive edge (for example, the formula for Coke). The business may disclose trade secrets during the employment relationship and require employees not share these with others. Ensure that your employment agreement contains a comprehensively drafted clause to protect this information.
Similarly, make sure that each contract you enter into includes a confidentiality and IP clause. You may have contractual relationships under which parties will receive confidential information to create IP, and you should have a term that clearly states who will own what. Don’t leave anything to assumptions – have a well-drafted contract in place for your business’ protection.
For example, a business may engage a software developer to create an app. However, the developer may use and build upon code from existing apps. The IP clause should be drafted fairly and reasonably so that the developer can retain ownership or the right to use the existing code in other works, and the business can protect the code created specifically for their app.
Well-drafted intellectual property clauses will usually specify which party owns each part of the IP and whether there are any limited or ongoing licences between the parties.
There are many avenues for protecting the IP of your business. Some will involve registration of your brand or certain products or systems. You need to address these types of IP early. Check that the contracts a party has asked you to sign will protect your confidential information and state what part of the IP you will own. Similarly, if you are preparing contracts to give to others, include clauses relating to confidentiality, intellectual property and trade secrets.