IP SERVICE WORLD 2017 EDITION
the journal of intellectual property management
Valuing intangibles: the role of IP in M&A
What's next for the Unitary Patent?
BREXIT what could it mean for your IP rights?
IP licensing: are you making the most of your assets?
Emerging trends Case law analysis IP management best practice Patent strategies
European specialists with a global reach
Established in 1888 16 offices in 8 countries 300+ IP specialists 40,000+ Customers 1 million+ IP assets under management Patent prosecution across Europe
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EDITOR Emma Jones, email@example.com
EDITORIAL TEAM Hannah Damjanovic, Frouke Hekker, Myrthe Pardoen, Marloes Smit
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Published on behalf of Novagraaf by Engelen & de Vrind. Printed by Groen Media.
It's time to take a new look at IP management
The year to date has, without doubt, been a challenging one for intellectual property professionals across all industry sectors and organisations, as changes in political and regulatory landscapes loom large over current and future business and IP strategies.
The uncertainty and insecurity surrounding the Brexit negotiations, further delays to the implementation of the Unitary Patent and Unified Court System, concerns about IP management under the new US administration, as well as ongoing pressure on budgets are having an impact on day-to-day IP management and IP practitioners' ability to plan for the future.
But, alongside these hurdles and frustrations are opportunities too, as businesses look increasingly to merger and acquisition (M&A), and private equity investment to shore up their business plans and market opportunities.
In the pages that follow, Novagraaf's IP specialists look in detail at some of the key issues facing IP professionals today. With best practice advice for managing IP due diligence as part of an M&A transaction, tips on implementing cost-cutting initiatives as part of patent annuity and patent portfolio management, and techniques on how to best capture innovation during research and development (R&D), our experts provide practical and insightful guides on navigating this new world. We also look in-depth at one of today's most pressing topics: the impact of Brexit on future trademark and patent strategies in the EU.
Join in the discussion by contacting our IP specialists at email@example.com. We're always keen to hear your views.
2017 Novagraaf. All rights reserved. For editorial matters, please contact the editor. The views of contributors do not necessarily reflect the policy of Novagraaf nor that of the publishers. The publishers cannot be held responsible for loss or damage to unsolicited manuscripts or photographs.
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HOT TOPICS 4 Unitary Patent What does the future hold? 6Brexit Implications for IP rights holders 8 Patent Annuities Guidance on when and what to renew
ASSET MANAGEMENT 10 Valuing Intangibles IP in M&A 12 Opinion: Preparing for an IPO 13 IP Licensing Make the most of your assets 14 Brand Valuation Value your brand for ROI
IP in R&D 16 Search before Research Integrating IP into R&D 18 IP Capture An innovative new service from Novagraaf
EMERGING TRENDS 20 Posting Memes Review the IP issues first
THE LAST WORD 22 A troll in the marvellous realm of IP
What's next for the Unitary Patent?
First Brexit, then the UK and German general elections and now a case pending in the German Federal Constitutional Court have delayed the implementation date of the Unitary Patent and Unified Patent Court (UPC). Is this Europe-wide right ever going to come into being?
The UPC system looked to have taken another step forward earlier this year when Italy deposited its instrument of ratification of the UPC agreement on 10 February. A total of 14 countries have now ratified the agreement, namely: Austria, Belgium, Bulgaria, Denmark, Estonia, Finland, Italy, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Sweden, and France (one of the three mandatory ratifying countries). The UK government announced plans last year to ratify the agreement and to set up a divisional court in London despite fears Brexit would halt negotiations.
In view of this, and in view of the UK's intention to ratify the treaty, the European Patent Office was pushing for an entry into force of the New UPC system by 1 December 2017.
However, the surprise announcement of a UK general election for 8 June delayed the passage of the legislation through parliament and thus also the UPC System. As things currently stand, the UK is ready to ratify and could do so any day now, but the Brexit negotiations seem to be taking priority and so it is difficult to give a true estimate of when this will take place.
Further, constitutional challenges to the UPC agreement at Germany's Federal Constitutional Court have also delayed the timeframe with the latest official communication stating that, at present, it "is now difficult to predict any timeline".
The Constitutional Court has invited German public institutions for comments on the challenge up until late December 2017. Consequently, there are now two potential scenarios and consequences for the UPC: 1)The Constitutional Court can decide not to
accept the challenge, e.g. because they see no prospects of success: then the way would be free for the German government to finalise the ratification procedure thus allowing the UPC to start before the summer of 2018, or 2)The Constitutional Court decides to hear the complaint. This will likely take quite some time, meaning it may be months or years before a final decision is made. The Court may indicate whether Germany in the meantime could or could not ratify. Clearly, in this scenario, there could be a substantial delay for the UPC to start.
Slow progress Although the timing for the implementation of the court system continues to slip (the process was originally expected to be completed in 2014, if not sooner), the implications of the Unitary Patent right and associated patent court system is rightly on the minds of IP counsel throughout Europe and beyond.
With a marketplace of more than 500 million consumers, Europe is a major economic power, and one of the world's largest importers and exporters of goods and services. Business owners
know that if they are to trade successfully in Europe, they first need to ensure they've appropriately protected their IP rights in the territory. However, with 28 member states to cover, along with a number of important surrounding countries such as Switzerland, this has the potential to be an expensive exercise. Once implemented, the new pan-European Unitary Patent right will provide businesses from within and outside the EU with an important new tool to protect their innovations throughout the participating member states and to enhance their success in what is already a highly competitive and inventive marketplace.
Don't worry if you haven't had a chance to fully consider the implications of the new European patent system to your business yet, however. We set out the answers to some frequently asked questions below.
What is the Unitary Patent? The Unitary Patent seeks to facilitate the process of obtaining patent protection in the EU by simplifying and reducing many of the administrative hurdles and costs associated with obtaining patent rights across the territory; for example, validations, translation requirements and national renewal fees. Rather than replace existing systems, such as that of the European Patent (EP) however, the Unitary Patent will sit
With a marketplace of more than 500 million consumers, Europe is a major economic power.
alongside them, offering businesses greater choice in their patent protection strategies. In general, where EU-wide coverage is required, the Unitary Patent promises to considerably lower costs by removing the requirement to provide translations in languages of member states at the European Patent Office (EPO). The right will come into force automatically on grant across partici pating member states and, unlike an EP, will not need to be validated or renewed by each member state's patent office to enter or be kept in force.
Will the Unitary Patent replace the existing European Patent (EP) system? No, the EP system, as set out by the European Patent Convention (EPC), will remain in force; instead, patentees will be able to opt for either a Unitary Patent or an EP on grant of a patent by the EPO. Patentees can not choose to file both; however, it will be possible to combine both schemes by taking a Unitary Patent for the participating member states and a regular EP patent for one or more of the other EPC signatories. However, `classical' EP patents will fall under the jurisdiction of the new court system, unless the proprietor instructs the EPO to `opt-out' the patent from the new court arrangements (see below).
How will the two European patent systems differ? Unlike the EP patent, the Unitary Patent will not need to be validated or renewed in each individual country post-grant; instead, protection will automatically come into effect in the participating territories once the Unitary Patent has been granted by the EPO. Only one renewal fee needs to be paid, to the EPO. A number of translation requirements will still be in force post-grant in the `transition period' (which is due to last a maximum of 12 years); however, the ultimate aim of the system is to reduce the amount of translation required by facilitating `high quality' machine translations into all official languages at no cost to the applicant. All infringement disputes will be overseen by a single court (the newly formed Unified Patent Court). Unlike the EP, the Unitary Patent will function as a single patent, which has to be maintained, transferred, abandoned or revoked as a whole.
How do I apply for a Unitary Patent? The Unitary Patent will be obtained using the existing EP application procedure with patent applications made to, examined and granted by the EPO. Once the patent is granted, the applicant may choose (until one month after grant) between the `regular' EP patent or a Unitary Patent for the participating member states. As such the new system will extend to EP applications pending at the time the Unitary Patent system comes into force.
What will the Unified Patent Court do? The Agreement on the Unified Patent Court seeks to eliminate the likelihood of parallel disputes involving the same patent rights in EU member states. It establishes a single patent court with the power to issue decisions on infringement (including preliminary Injunctions) and validity of existing EP rights and the new Unitary Patent right. Their decisions will be binding across all contracting EU member states. Under the proposed Unified Patent Court system, it will be possible to commence a single action for infringement covering all signatory member states. This will apply to all patents granted by the EPO; in other words, it can be used for patents filed under both the Unitary Patent and EP systems (where the EP has been validated in EPC countries that are part of the Unitary Patent system). The risk, of course, to the patentee would be a single revocation counterclaim, which would apply throughout the Unitary Patent territories.
Do I have to bring my dispute before the Unified Patent Court? For a seven-year transitional period (possibly extendable by another seven years), it will be possible to opt out of the Unified Patent Court for disputes concerning regular EP patents. It will not be possible to do this for Unitary Patents.
In other words, if you opt to file a Unitary Patent post-grant, you will be required to use the Unified Patent Court system.
How do I know if the Unitary Patent is right for me? Given the restrictions and uncertainties set out above, companies will need to carefully consider the territories for which they are seeking protection before deciding which route to pursue and the likely costs. Unlike the present EP system, patentees will not be able to select those
jurisdictions for which they seek protection with a Unitary Patent (as it automatically covers all countries), and will be required to pay the cost for having a patent granted and maintained in all countries, even if protection in most of the member states is not needed.
Applicants requiring reduced geographic coverage may find that traditional EP (or national) patents are likely to offer a more affordable route, whereas larger companies that require protection and are likely to face infringement actions throughout the EU may find the new system more efficient.
Patent owners will also need to think carefully about whether they want their existing patents to be opted out of the unitary litigation system (the Unified Patent Court). When it comes to litigating, they may find that enforcement in one or two key markets is more cost effective than paying for a Europe-wide action. But, until the fee structure becomes clear, it won't be possible to make that assessment.
Do I need to do anything now? There is no immediate action that you need to take in regards to your existing and pending patents; however, it would be beneficial to start looking into the system now to understand how it will work, as it is likely to influence your future filing strategies in Europe. It would also be wise to review your patent portfolio to identify those EP patents that have already been granted or are likely to have been granted once the option to `opt out' of the Unified Patent Court system comes into effect. n
For further information or advice on the Unitary Patent or Unified Patent Court system, please email us at email@example.com.
Robert Balsters is a Patent Attorney at Novagraaf in Switzerland
Brexit - what could it mean for your IP rights?
The triggering of Article 50 by the UK government has set in motion what is likely to be a complicated, protracted and highly pressured exit from the EU. We look at the potential implications of the UK's exit from Europe for businesses' IP rights.
The uncertainty surrounding Britain's self-ejection from Europe continues, but one thing is certain: the move will have long-term implications for businesses across the region, including their IP and legal rights.
Now that the Article 50 notice has been served, the process of negotiating the withdrawal agreement between the UK and EU has begun. The process of withdrawal itself could take up to two years (longer if the remaining member states agree to extend this period).
This will be the first time that a significant member of the EU has left, and there is no detailed mechanism in place yet to structure that exit. Much has to be decided in this period. For example,
there is no clarity yet on what exit will mean for future trading arrangements in the EU, for the UK's involvement in the European single market or for the rights of EU citizens currently located in the country. These issues (and others) will only become clear once negotiations progress.
Implications for trademark and design rights Although the European Commission has recently issued a position paper on how it would like IP rights to function in the EU and UK post-Brexit, the final exit package is yet to be negotiated and decided. However, it is reasonable to expect that if the UK does leave the EU, it will no longer be part of the European trademark (EU TM) or registered design (EU Design) systems.
Nonetheless, it should be encouraging to rights owners that the European Commission wants a smooth and consistent IP approach at Brexit. The main message at this time is that the EU want the owners of unitary rights to not lose those rights when the UK leaves the EU. It is yet to be seen, however, whether the UK would need to legislate for successor rights as part of that withdrawal (i.e. some form of conversion of EU rights into UK law) or if UK proprietors would be required to re-register EU rights at the UK IPO.
Should you convert your EU TMs to UK applications now? If an EU TM has been filed and the trademark is used only in the UK, then the right could be vulnerable to cancellation actions (for non-use) if the five-year grace period has passed. It is already possible to convert such EU TMs to UK rights, however, it's important to note that such conversions will leave companies without EU TM protection and could, therefore, require you to file additional applications to ensure protection in Europe if you plan to use your mark/s there moving forward.
Conversely, when the UK portion of an EU TM, which is used only outside the UK, is converted into a national registration, the UK registration would similarly be vulnerable to cancellation actions (for non-use).
Seniority claims would also need to be reviewed. When the EU TM system was implemented, there was a system by which national rights could `live' within the EU right and the national right allowed to lapse. Where this has occurred in respect of UK rights, it would need to be discussed whether these rights could be re-activated in some way.
What will it mean for patent rights? As things stand, there will be no change to the current way in which patents can be obtained, maintained or litigated in the UK. The Brexit vote does not mean the UK ceases to be a member state of the European Patent Convention (EPC) that established the European Patent (EP) system. The EPC is not a direct instrument of the EU legislature; it is a multilateral treaty agreed by the member states that are signatories to it. At present there are 38 member states of the EPC and only 28 member states of the EU. Following Brexit, the UK will become one of the EPC member states that is not an EU member. Even after Brexit, therefore, companies will be able to file an EP application designating the UK.
However, in the future, when the Unitary Patent and Unified Patent Court (UPC) system come into being, this alternative way of obtaining a Europewide patent and the alternative Court to litigate patents in Europe would in theory not apply to the UK; although the government has still taken first steps to ratify the UPC Agreement (see page 4 for more on the progress of the Unitary Patent system).
Will it impact enforcement strategies? There will be some impact on the enforcement of rights once the UK exits the EU, as the UK would no longer have an EU TM court. While the impact is likely to be quite minimal, any pan-EU injunctions/ or decisions could be vulnerable to change or amendment.
What about imports? An exit from Europe could also have an impact when it comes to the transportation of goods between the UK and the EU. The considerations preventing the partitioning of the internal market would no longer apply if the UK leaves the European Economic Area (EEA). Consequently, EU TMs and Designs could be used to prevent imports into the EU from the UK, as exhaustion rules would no longer apply (currently, a trademark owner cannot object to the further dealing of goods it has placed on the market within the EEA). Likewise, UK rights would not be exhausted by sales elsewhere in Europe and could be used to prevent parallel imports into the UK from the EU. Most brand owners already know the importance of recording their trademarks with customs to enable them to identify and act against infringing products; however, the Brexit vote may be a good opportunity to review those strategies and to ensure that those trademarks are recorded with customs authorities in both the UK and EU.
This will be the first time that a significant member of the EU has left, and there is no detailed mechanism
in place yet to structure that exit.
Should you do anything now? Companies would be wise to review their current filings and management/renewals strategy to ensure their rights continue to be protected at both EU and UK level post-Brexit. We would advise taking the following steps: 1Prioritise registrations: Review your current
EU TM (and Design) portfolio and prioritise rights for action/protection (e.g. between primary, secondary and tertiary registrations) 2Pull out duplicate rights: Identify those EU rights that overlap with existing UK registrations (as separate protection should already exist) 3W eed out waste: Use the opportunity to identify those rights or classes that are no longer relevant, so as to save cost and streamline the portfolio 4 R ingfence core rights: Also use the time to review primary/key rights to ensure that they are up-to-date and adequately protected 5Consider associated effects: For example, implications for existing licensing agreements, injunctions/disputes or anti-counterfeiting strategies (as the UK may no longer be subject to the EU principles on the free movement of goods)
What happens next? A vote for Brexit has started the process of change in the way in which UK and European businesses protect their IP rights nationally and in the EU. However, there is no clarity yet on what exit will mean for future trading arrangements in the EU or the UK's involvement in the European single market. These issues (and others) will only become clear once negotiations progress. n
For more on protecting IP rights in the EU and UK, or to sign up for our updates on Brexit and other IP news, visit www.novagraaf.com or email firstname.lastname@example.org.
Patent annuities: when and what to renew
When budgets are tight, IP expenditure will naturally come under scrutiny, with patent annuity payments often one of the first areas to be identified for cuts. A knee-jerk reaction to save money in the short-term can actually prove more costly in the long-run however, unless the exercise is undertaken in a structured and informed way. Novagraaf's Eric Siecker offers some advice.
No one wants to lose budget, but if a company has to tighten its belt, everyone within the business should have a good look at their current spending to see what they can do. While IP counsel should seek to fight against any harsh cuts to IP protection budgets, an early offer to reduce cost in a reason able manner may be seen as good leadership.
Internal education is important here too. In-house IP practitioners know very well the importance of patents and innovation to a business, but that knowledge is not always shared by everyone in the corporate boardroom. As such, the emphasis is on IP counsel to show that the legal rights that protect those patents aren't unnecessary costs. One way to do this is to communicate that cuts to IP budgets will increase business risk in the short and long-term. Risk is, of course, very difficult to quantify; however, efforts to paint a clear risk picture will be key in the fight against harsh budget cuts.
Know what you own A budget-cutting exercise may provide the often necessary prompt for an in-depth audit of patent portfolios and annuity payments. Not only may there be opportunities to make some initial cuts without impacting the overall risk picture, but such an exercise will also put IP counsel in a good position when discussing budgets in general. It's important to know what you own if you are to be able to justify its cost.
Budgeting for annuity payments The annual cost for renewal payments is (or should be) pretty easy to estimate, so it shouldn't appear to the business to come as an unexpected a bill each year. However, portfolios tend to balloon over time, as it is easier to add a patent than to cut one. No one wants to be the person that cuts the patent, so unless they are 100% sure something can be cut, it is natural for decisionmakers to play safe and to keep the patent alive.
Some companies set specific budgets for renewals forcing x% of cuts to be made each year. This will lead to tricky decisions; for example: should I cut one old and expensive patent or two new and less expensive patents?
If you have to make cuts, where should you start? A patent strategy that includes a maintenance/ abandonment strategy will definitely help. Patent portfolios typically include groups, or buckets, of patents with differing objectives and some of these buckets will be easier to prune than others. Clearly, those rights that protect and support core innovations should be safeguarded. So too should any that make the business money; for example, through licensing or aftermarket parts protection. Other buckets (for example, non-core protection or non-core markets) may be pruned more vigorously.
Predicting the long-term impact Of course, it's often difficult to be sure that a patent considered non-core today may not prove valuable in the future. This can be the stuff of nightmare for many patent heads. It is difficult to put a value on individual patents: some are like sleeping guard dogs at the warehouse; the warehouse never got burgled, but was that due to the dog?
Nonetheless, there are a number of red flags to keep in mind. One particular thing to watch out for is the potential impact of successive years of pruning on the geographical scope of coverage of a portfolio. US patents are up for renewal every four or eight years, whereas in most other countries annuities are paid annually. Let's say a company is pruning its portfolio back over a period of three years. This provides three opportunities to cut for example a European Patent (EP), but a US patent will come up for consideration once at most and possibly not at all during this cost-cutting cycle. Without due care and attention, the portfolio could easily become skewed towards a US patent heavy portfolio, as the non-US portfolio may get trimmed excessively. Such a scenario is unlikely to represent the best interests of the business.
Ensuring consistency in decisionmaking Going through large numbers of renewals each month, quarterly or six-monthly is no fun for in-house counsel or business people. It could trigger a lot of email chains trying to come to a decision, working out if the technology is in use, and so on. Setting some guidelines for review is often beneficial in such instances, and can ensure that the approach is consistent and well-managed. The exact approach will vary by business, but age and cost parameters are often a good place to start; for example:
A ge e verything over 10 years should always be
reviewed to see if the technology is still relevant; e verything under five years should always be reviewed to see if the technology actually made it through testing and is as valuable as was initially thought; a utomatically renew all those patents that are between 5-10 years old.
C ost a utomatically renew all patents that cost less
than 500 USD (or whatever the currency may be) to renew.
A combination of age and cost models can also work well.
Other measures to consider Allowing rights to lapse isn't the only option when seeking to prune a portfolio, there is also the potential to sell or license unused or unwanted rights. It's important to note, however, that this is generally a slow process and so, not something that can be done quickly when budget cuts kick in. However, IP counsel should consider the possibility of sale or licensing as part of their ongoing patent strategy if it makes sense for that particular business. n
Don't hesitate to get in touch at email@example.com if you would like further information or advice.
Eric Siecker is Managing Director of Novagraaf in the UK
Valuing intangibles: the role of IP in mergers and acquisitions
A well-maintained IP portfolio and, just as importantly, a wellmaintained record of the IP portfolio can add significant value to a company, as well as making it an attractive proposition. From a buyer's perspective, it can make the transition from buyer to owner a smoother ride.
Whether directly or indirectly, consciously or unconsciously, IP will play a major role in any merger or acquisition (M&A) activity. A company's brand value or its product or innovation portfolio are key value differentiators, providing plenty of strategic reasons for M&A-related activity. In order to maintain that value, however, companies need to be sure that they maintain accurate records of all their IP and to update their records correctly and promptly. It's a laborious, but necessary task.
possible to conduct the IP audit prior to completion, it should to be done at the earliest opportunity. Transfer of all IP assets to the seller needs to be dealt with equally promptly, especially if the company ceases to exist and it is no longer possible for them to sign any relevant documents. Not all IP is a registered right and so an assessment of all company documents will generally be needed to locate other rights, such as copyright or confidential information, licences or distribution rights.
Once the portfolio has been evaluated and required rights identified, consideration needs to be given to updating the ownership of registered rights and transferring any rights based on agreements to the new owner.
Updating IP ownership is not always a simple procedure. Each jurisdiction has its own quirks and requirements and fees, whether in terms of the documents that need to be supplied or the timeframes in which companies need to act.
Where to start due diligence checks In an ideal world, the IP portfolio will have been diligently maintained and recorded, and an acquired company's IP audited and cleansed as part of the build up to the M&A activity; however, such due diligence does not always take place, whether due to time constraints or the nature of the acquisition.
For that reason, when a merger or acquisition is being considered, there should be an audit of the portfolio at an early stage to see if the records have been properly maintained and the chain of title is up to date. This also serves to verify that the buyer is getting what they think they are buying and gives them the opportunity to ask the seller to make the appropriate updates to the portfolio as a condition of the transaction. If for reasons of confidentiality or speed it is not
Having reviewed the records and cross-referenced them with other data resources, an analysis of the scope of protection should be undertaken against the new owner's or merged company's business plan. That will enable the new owner to identify key rights and those that are not required. Even in well-maintained portfolios, there are gaps in protection, usually with good reason, which need to be identified and the possibility of obtaining protection reassessed.
After completion update the ownership When IP changes hands, records need to be updated at the relevant registries if the rights are to be properly maintained and enforced. Much like having your car insurance registered to the wrong address, buyers may find that they're not fully protected when they need their rights the most.
Depending on where the rights are held, buyers may find that they need to: S imply notify the registry by letter or email that
the IP rights owners' address has changed; P rovide evidence (e.g. the master deed or a
contract signed by both parties) to substantiate a change in address or owner there may be good reasons why the business sale agreement cannot be disclosed and so the buyer may need to get the agreement of the seller to sign confirmatory assignment documents in those countries; or S upply additional authentication; for example, a notary seal and legalisation from the local consulate.
Translation requirements may also need to be considered.
Organising the process Novagraaf's experienced teams are practised in the processes required to verify and update records in every key IP jurisdiction, whether for a direct client or as an outsourced assignment from an in-house team. The experienced back office can cross check registered rights against a company's records and identify variations. The team can advise on where to find and evaluate nonregistered IP rights and how best to keep a record of them going forward.
Once the due diligence process is complete, our back office teams have experience of recording transfers of ownership, the documents required and processes involved, making the experience ultimately less stressful.
The most cost-effective and efficient approach to title updates is to do all of it in one hit. However, depending on the jurisdictions and rights in question, it is possible to phase the process of updating records post-M&A. As a general rule, companies should seek to ensure that their records have been verified and updated by the date by which the next renewal is due.
For trademarks, where renewals are generally payable every 10 years, this can give rights holders a good window in which to plan their activity; e.g. they can decide to update their core
rights promptly or prioritise those registered in key jurisdictions, but then to wait for the next renewal deadlines for lesser rights to decide whether they even wish to maintain a right and, if so, update it at that time.
Updating IP ownership is not always a
simple procedure. Each jurisdiction has
its own quirks and requirements, and differences in fees.
For patent rights, time constraints are generally more pressing given that renewals are payable each year. It's also important not to overlook updates to design rights and any other registered, non-registered or recorded forms of IP, e.g. domain names, copyright assignments etc. It should always be kept in mind that if you do not record the changes straightaway, obtaining signatures from the seller will become more and more difficult as time passes and if the seller is liquidated or dissolved, can become impossible. One way to avoid that is to ask the seller to sign the documents on or as soon as possible after
completion; although note that, in some countries, the documents become void or invalid with time so that does not always solve the problem. It is worth noting that until the ownership is updated, it is not possible to enforce rights in most countries or situations, and buyers may also be unable to claim damages for any acts committed before the ownership change has been recorded on the relevant register.
Finally, companies are advised to look into time schedules in advance of formulating their updating strategy. Some jurisdictions have a six-to-eight month timeframe in which records need to be updated and companies that do not adhere to this will need to pay a local fine. Here, quick and easy access to the named signatory will be also be crucial. n
Alastair Rawlence is a Trademark Attorney at Novagraaf, based in Manchester
Preparing for an IPO? Don't overlook your IP assets
IP isn't always the first priority for a business preparing for an initial public offering (IPO); however, the sooner you start thinking about your IP assets, the better prepared you'll be.
The route to IPO is rarely plain sailing, with deadline and resource constraints the most frequent sources of headache. As with most major business milestones, preparation will prove crucial, and that applies as much to your IP assets as it does to the regulatory requirements that you'll need to meet. Where should you start?
Understand what you own and what it's worth As a general rule, the sooner you start thinking about your IP assets, the better prepared you will be when the IPO process begins. As a first step, look to audit what it is that you own (and the scope and extent of protection). Unless you have undertaken an audit recently, you may find that the rights you have in place don't match exactly the portfolio that you thought you held or need to hold for the IPO to run smoothly. Verifying your portfolio in advance will allow you to fix any oversights in protection, and reinforce your early valuation exercises.
Consider all forms of IP Businesses will typically focus on patent or trademark rights that are already in place, but when it comes to both IP value and opportunities for future growth or expansion, other forms of IP are equally important. This includes patents, trademarks and designs that are still in the application phase (domestic and foreign), as well as unregistered rights, such as copyright, trade secret methods and technical know-how. It is also advisable to review any agreement relating to inventions and licenses, manufacturing and distribution agreements, assignments/charges of IP to or from the business, and any IP dispute settlement agreements, including co-existence agreements, as these may impact (positively or negatively) on IP value.
Avoid nasty surprises Find out what you own and what you don't, by pulling together: A schedule of domestic and foreign patents and patent
applications; A schedule of trademarks, trade names and registered
designs; A schedule of copyrights; List of domain names; A description of important technical know-how belonging
to the company; A description of methods used to protect trade secrets and
know-how; A schedule and copies of all agreements relating to
inventions and licenses, manufacturing and distribution agreements, assignments of IP to or from the company, any mortgages or `liens' over the company's IP, any IP dispute settlement agreements including co-existence agreements; and Summary of any claims or threatened claims by or against the company regarding IP.
Use the opportunity to refocus or cleanse your portfolio Consolidating your rights and agreements will provide you with a clearer picture of your IP assets, and their respective strengths and weaknesses. As with the IP audit process in general, it will also give you the opportunity to refocus your IP holdings in light of your future business strategy; for example, by ringfencing key (or `core') IP rights and identifying less strategic or unused rights that may no longer justify the renewal fee. The audit process will also prompt you to make sure your rights are in order (i.e. valid and up-to-date), as it will identify any errors in the chain of title or renewal schedule, and give you the data needed to rectify or work around them.
Give yourself the time not to panic Typically, the closer you get to the IPO launch date, the more fraught the process will be. Involving your IP team or external advisors and beginning the IP audit early in the process will help you to sidestep any last-minute panics by ensuring that IP value and potential is fully captured and protected in advance. n
IP licensing: are you making the most of your assets?
IP licensing can provide companies with additional (or core) revenue streams, enable them to raise brand awareness and enhance their reputation, and extend their brands or enter new markets. However, if IP ownership or validity is unclear, it can also pose significant financial and business risk.
An IP licence is an agreement between the owner of a certain IP right and a third party in which the IP owner (licensor) provides the third party (licensee) the right to use (part of) its IP rights for a limited time for certain products in an often restricted geographic area.
Managed correctly, it can provide a business with an important revenue stream, as well as offering them a cost-effective method to extend their brand into new product/service areas and markets.
Know your assets Before you can begin to exploit a brand, however, you first need to define your IP rights. Who owns the trademark rights? W hat has been registered (word marks, device
Marks etcetera)? W hat for (goods, services, pre-emptive goods/
services etcetera)? W here are the trademarks registered (which
territories, countries of primary (A), secondary (B) and tertiary (C) interest)?
Regular reviews will ensure your IP portfolio is in good shape to begin exploiting your rights, as well as providing you with the insight you need to identify trademarks that could be sold or licensed for profit. Typically this might involve grouping trademarks into `core' and `non-core' categories, where core rights are those that protect a company's key products and markets, and noncore rights are those involve secondary products and markets, or are little used. Novagraaf's experts can help you to audit your current portfolio and develop a strategy in line with your overall business plan.
Create, register, manage and exploit Next, you need to fashion a strategy for IP licensing and/or exploitation in general. However, you can't simply register rights and expect to create an IP licensing programme.
The ideal process should look something like this: C reate: Business strategy and brand guidelines
used to drive choices on trade names, branding options, trademark architecture, geographical scope, filing strategy, risk and budgets; Register: Trademarks filed and refusals/ oppositions properly and efficiently managed in line with determined budget; M anage: Administration of rights actively managed to ensure validity and upkeep of the portfolio, including changes in ownership and renewals, as well as monitoring for infringement and enforcing IP rights where infringement occurs; and E xploit: Commercial opportunities evaluated, such as licensing, sale, spin-offs and joint ventures. For unused or unwanted rights, IP sale offers a short-term and rapid solution, whereas spin-offs and joint ventures typically involve more time and greater risk. Licensing, in contrast, generally involves limited risk and smaller levels of investment.
Evaluating licensing opportunities Licensing is the typical next step once a company has its portfolio in place and its brands well established. Again, it is the business plan that should help to drive decisions as to which rights should be licensed and in which markets.
Pick your licensees with care; ideally, reliable partners who: are experienced in the field check their track
record; u nderstand and know your business, your core
values and will defend them; and s hare your long-term goals.
Before beginning a collaboration, the following points should be discussed and agreed: the rights and territories to be covered exclusivity sub-licensing possibilities revenue model (royalty or lump sum) c orporate identity guidelines/handbook; and reporting requirements.
You should also set parameters for success: the royal rate method of brand valuation is an effective method for valuing revenue. However, don't expect success to arrive overnight: effective licensing requires long-term collaboration with your partners and trust is a key to success. n
Chantal Koller is Managing Director, Trademarks Switzerland at Novagraaf, based in Geneva
Why should companies
value their brands?
ROI, that's why
As intangible value rises in importance in the boardroom, companies are increasingly asking trademark attorneys to help assess the worth of their IP assets.
We all know brands are important and valuable to a business, but why seek to put an actual value on them? In today's budget-focused boardrooms, trademark attorneys need to show that the legal rights that protect those brands aren't unnecessary costs, but instead add value to the business. More than that, as your management accountant will tell you, `What gets measured, gets managed.'
Brands enable owners to repeatedly charge a premium for what is often the same, or a similar, base product. This applies in all sectors, from computers to coffee, and from painkillers to polo shirts. A pack of Nurofen tablets, for example, will set consumers back 12p per tablet, as opposed to 2p per tablet if they buy a supermarket own-brand ibuprofen equivalent.
It is the brand that entices a customer to pay more and come back for more. The trusted name serves as a reassurance of quality and a shortcut to reading the clinical data or comparing ingredient lists with an own-brand equivalent. This is brand equity.
In the brand valuation process, we are asking: what is that brand equity worth to the business? Or, rather: what's its current worth and can it be further leveraged? Is there more that can be done?
Defining the what In measuring value, we first define what we are seeking to place a value on. In this context, a brand is a marketing-related asset that may include names, terms and logos intended to
identify goods, and create distinctive images and associations in the minds of stakeholders, thereby creating economic benefits for the owner. Stakeholders can refer to consumers, shareholders, investors, media and so on.
How we measure that brand's value depends on the purpose for the valuation. Purpose dictates the premise (or basis), and that, in turn, dictates the method and different methods produce different results. For example, is the valuation driven by strategic planning, financial reporting, dispute resolution or due diligence? Each of these will result in a different valuation premise and methodology for instance, the desire to capture market value, as opposed to investment value or liquidation value.
The ISO 10668 was developed in 2010 to set a `standard' for brand valuation. It covers three categories: legal, behavioural and financial. The first requires there to be an analysis of the strength of legal protection, the second measures stakeholders' attitudes, and the third, financial performance.
Financial performance can be calculated by taking a market-, cost- or income-based approach such as royalty relief, which looks at how much you could ask a licensee to pay to use your brand. Each of these can result in a slightly (sometimes even wildly) different end calculation. This broadly explains the disparity in results we see in highprofile brand-value rankings, such as those produced by Interbrand or Brand Finance. Even within income-based methodology, there are various approaches, so the `standard' has plenty of variety.
In the brand valuation process, we are asking: What is that brand equity worth to the business?
Legal protection through trademark (and other) registrations has touchpoints throughout valuation calculations, no matter which methodology you use; the stronger and better managed that the trademark portfolio is, the higher the value of the brand may be.
The question of why Few of us are accountants, so this is not the place for long-winded explanations of brand valuation calculations. For trademark attorneys involved in valuing brands, the `why' should come before the `how'.
Some the most common reasons for undertaking a valuation exercise include: portfolio disposal or acquisition, preparation for an initial public offering (IPO), transfer pricing, IP licensing and IP securitisation. Each of these will require a different valuation method, or combination of methods.
But brand valuation is important at any stage of a brand's life cycle, not just when it comes to a restructuring or sale. Any company needs to see that it is getting a return on investments made, and investment in IP protection is no different to an investment in new plant or manufacturing capabilities. It's just more difficult to articulate or quantify.
Of course, investment in protection is only one aspect of outlay in a brand, which could also include, for example, marketing and PR activities to increase awareness. Although a brand valuation will not necessarily prove that the investment in protection is the factor increasing or decreasing brand value, it will always be a factor.
There are instances where a strong brand protection policy has been undermined by bad publicity, which has a negative effect on brand value. Equally, a strong brand can be undermined by an inadequate trademark protection strategy that prevents the brand owner from, for example, expanding to new countries or new product ranges because someone else owns those rights. There are also the cases when the value of a company acquisition rested almost entirely with the IP assets being acquired.
Trademarks cost or investment? As with many industries, the functional differences between products and services have been narrowed to the point of near invisibility. It is intangible assets, such as brands, that provide the basis for establishing meaningful differences between apparently similar offers.
Intangible assets account for over half of the total global enterprise value of companies as shown in
a study(1) analysing the enterprise value of 56,000 companies listed on more than 100 stock exchanges around the world.
Of course, a brand is more than just a trademark but, without trademark protection, a brand is potentially worthless.
Trademarks and associated forms of IP are the one constant in brand creation. A product's name, the design and colour of its packaging, and the corporate logo are not just marketing tools they are legal rights which can bring great benefits and growth when nurtured and used properly. Yet, they can often be overlooked in the rush to market, or simply considered a drain on resources an outgoing cost to the business that seems to bring in little return.
That's why it's important for us as an industry to showcase the contribution made by trademark assets to brand strength. We all know that a strong, well-managed registration portfolio has a direct influence on brand value, and therefore business value. Valuation of that asset can also unlock its true worth, and show that the right trademark registration strategy is an investment, not just a cost. n
(1) Source: 2014 BrandFinance Global Intangible Finance Tracker (GIFTTM)
Brand valuation - a potted history
1988: First notable valuation Premier Foods, then RHM, turned to valuation as a defensive
measure when subject to a hostile takeover bid. It valued Britain's much-loved Hovis brand to show that the takeover offer undervalued the RHM business. 2000: $1bn securitisation RHM was, this time, the subject of the first major IP-based securitisation. The company raised more than $1bn using its brands as security, leading to the issuance of a `brand bond' the following year.
2001:"100 Best Global Brands" First brand league table published by Business Week. 2004: IFRS3 Introduction of the International Financial Reporting
standard. 2010: ISO 10668 International Standard for brand valuation introduced. 2014: League Tables Today, brand valuation league tables are commonplace, and
brand valuation has become accepted as an important part of valuing business.
IP IN R&D
Should you search before research?
IP strategy is best considered at the start of research and development (R&D). The first step is choosing the IP approach to take during product development. Novagraaf's Mark Suddaby explains the options.
While every organisation and industry sector will have differing IP policies and R&D priorities, they each share the same challenges when it comes to considering and capturing IP. The question is: at what point should they start?
Typically, businesses consider IP after R&D activities have yielded a conceptual technical solution. Likewise, academics, while excellent early searchers of published papers, rarely search patent literature.
However, with much R&D activity focused on crowded technical areas, companies and academics are beginning to recognise the need to incorporate IP strategy into their R&D approach. Managed appropriately, IP can help drive and focus R&D efforts, and mitigate the risk of investing in the development of technical innovations that may unnecessarily overlap with existing prior art.
What is patent landscaping? Rather than searching the existing prior art for a specific solution in development, patent land scaping outlines the existing technical field. This can highlight those technical areas which are the focus of major development, and the quieter `white space' which may inform future R&D strategies.
Early patent landscaping differs from traditional searches to assess patentability since at this stage a technical solution may not exist: this is the case where landscaping occurs during scoping of an R&D programme.
Key benefits One benefit is the early identification of prior solutions. In its report `Why researchers should care about patents', the European Commission estimates up to 30% of R&D activity is wasted since the technical solution developed already existed. In the UK, this equates to 4.8bn of R&D spending.
Looking at the patent landscape early also enables strategic decision-making concerning product development. The results may indicate a `white space' prospect; for example, by identifying quieter areas in a technical field. Armed with this information, the company can make an informed decision on the resources to allocate to a project.
In addition, where prior technical disclosures are found, the analysis can mark out the available technical field. Crowded parts of the landscape are unlikely to yield broad patent rights, while identifying unoccupied parts of the technical landscape (the `white space') can help direct R&D efforts towards areas that are more likely to yield broader patent protection.
Where an existing solution is found, options include: freely using the existing solution where there
are no active IP rights in the countries of interest; licensing-in the existing solution; and/or a cquiring the IP to strengthen the business' IP portfolio.
Such approaches can save R&D expenditure and may reduce product development time. That saved R&D expenditure could be redirected to other development activities.
Alternatively, guided by the landscape, R&D efforts can be strategically targeted to develop an independent, patentable solution. Two common reasons to do this are to avoid licensing and to take advantage of the tax relief available under the Patent Box legislation that exists in the UK and other countries.
Mark Suddaby is a Patent Advisor at Novagraaf, based in London
In addition to identifying whether an existing solution exists, undertaking an landscape search at this early stage provides other benefits, including: finding alternative technologies, synergistic
technologies and opportunities to collaborate, cross-license, or form an IP pool; u sing the search results as a catalyst for new ideas in an R&D team; and identifying `hot' areas of research where early patent filing may be critical.
A later patentability search may still be prudent where R&D has taken significant time or where the technical field is `hot'. One option here is to request the patent office conduct a search when filing a patent application.
Patent landscaping is an important tool for companies during the early phases of product development life cycle; however, in some industry fields, it may be beneficial to undertake such technical analysis later in an R&D programme. This can be achieved by incorporating IP into clear checkpoints along the R&D cycle.
The nature of a company's R&D programme will influence the appropriate number of checkpoints. Common triggers include proof-of-concept, functioning prototype and final technical solution. Each of these checkpoints corresponds to increased certainty in the technical solution, thereby enabling a progressively more focused approach to patent searching. On the other hand, searching earlier provides greater opportunity to respond to search results.
Developing a search strategy Where patent landscaping has not already been conducted, patentability searching will enable companies to examine the state-of-the-art in the relevant technical field. Undertaking such searches at set checkpoints during the develop ment cycle will provide insight into the likelihood of patent protection and its probable scope.
Freedom-to-operate searching supports such analysis by identifying whether existing patents present hurdles to an organisation's ability to commercialise its R&D output. Both searches provide useful inputs to the likely commercial outcomes of the research and product development programme.
Where IP has already been considered at an earlier stage of the R&D programme (e.g. through landscaping), these searches can be used as a means to compare and build on those earlier results. Among other things, they will identify whether previous analysis is still relevant or whether additional searches will be necessary to cover changes in R&D direction, or to assess freedom to operate where patentability has been searched.
By putting in place IP checkpoints during the R&D life cycle, companies can maximise the opportunities for both IP and product development, and adjust their approach in line with each R&D programme's scale and criticality. In large R&D programmes, for example, there may be several patentability searches during product development. n
Identifying the best approach
The approach to use depends on the company's market and situation:
W here a technology company is new, or where new technical fields are the subject of R&D, patent landscaping offers significant benefits. In comparison, it may offer little benefit where no known solution exists. This is most likely to be the case in fundamental research and life sciences;
L ikewise, a technical field may be well understood, in which case a search-first IP approach may offer reduced value. This is most applicable to organisations with a long pedigree in their technical field and where competitor IP and technical disclosures are actively monitored;
W here the technical field is a `hot' area for research and patent filings, the development of a technical solution may be time-critical. This is especially true where an organisation intends to seek patent protection, however limited, for strategic reasons such as defensive accumulation or cross-licensing. Even in this situation, an early landscape search concurrent with research may help direct later research to increase the likelihood of a patentable technical solution being developed; and
F inally, where landscaping is not undertaken for strategic or other reasons, patentability searching will provide important insight to the likely scope of protection available.
With much R&D activity focused on crowded technical areas, companies and academics are beginning to recognise the need to incorporate
IP strategy into their R&D approach.
IP IN R&D
How do you capture innovation?
The research and development (R&D) process can require considerable investment in both time and money. But, in the rush to market, it can be difficult for R&D teams to identify those innovations that are of most value for protection as patents. Novagraaf's Philippe Vigand introduces a new service that could assist: IP Capture.
To successfully capture innovation, in-house patent teams or their external advisers need
to have mechanisms in place to identify, extract and analyse inventions.
How does a busy R&D team focus its efforts in order to methodically extract innovations for protection as patents, while avoiding those areas where little gain is to be found? While all businesses want to find `nuggets' of value for the future, in the rush to deliver, it is all too easy to overlook potentially valuable, but non-core, innovations or to focus R&D in the wrong areas.
The ability of a business to deliver on its goals of building a strong and defensible patent portfolio will often depend on the guidelines and processes it puts in place at the very beginning of the R&D cycle.
An independent view To successfully capture innovation, in-house patent teams or their external advisers need to have mechanisms in place to identify, extract and analyse inventions. Ideally, this is achieved via an organised dialogue between patent experts and the R&D teams (and/or inventors) in line with a pre-agreed and structured methodology. To be effective, this methodology needs to guide technical teams, enabling them to detect and/or improve innovation within the company.
Novagraaf has created such a methodology in `IP Capture', a service that we also deliver in association with a specialist third party in France
and Switzerland (Neo Factory, a company that focuses on the creation and industrialisation of innovative products). Our teams work together with customers' internal stakeholders (R&D heads, inventors, technicians and project managers, and so on) in order to review existing projects and procedures so as to detect, identify and extract technical solutions likely to be protected. Our `IP Capture' methodology also covers:
o ngoing improvements that detail, develop and enrich technical solutions, as identified via feasibility study;
e valuation of the patentability of solutions; and c ompilation of technical and legal issues in a
single report that allows the business to make an easy and direct filing decision while summarising the potential reach of the innovation identified.
Step to success One of the strengths of IP Capture is to be found in the immersive nature of the solution. The methodology ensures the customer's R&D department provides direct access to information; while, in return, Novagraaf ensures the in-house team receives timely advice (or `interventions') on the patentability of innovations, and possible improvements or alternatives.
Such `interventions' are managed according to criteria pre-decided with the customer; for example, in line with the technical field of inventions, geographical proximity or the availability of resources. It could involve a onetime intervention as part of a specific project, a review of ongoing projects or a total immersion of our dedicated team within the company.
A fresh pair of eyes Businesses will often look to their external patent counsel to sit in on planning sessions or R&D review meetings in order to encourage in-house teams to keep the potential patentability of inventions front of mind. IP Capture takes this practice one step further, helping the business to maximise the output of its R&D efforts from the very beginning of the innovation life cycle. This includes ensuring that any invention is worked according to technical and legal prior art, so as to ensure the broadest possible patent protection is obtained. There are costs benefits too of avoiding potential impasses or unnecessary workarounds early on in the process.
We find that the methodology also helps to generate new ideas as it requires inventors and R&D teams to discuss the invention from the outset, using technical, industrial and creative language, and highlighting any constraints in
advance that might impact the patentability of their output. As both IP and R&D budgets continue to be squeezed, the implementation of a tailored and structured methodology such as this could be the difference between patent headaches and patent success. n See our article on page 16 for more on IP management in R&D. If you'd like to find out more about our IP Capture service, please contact us at: firstname.lastname@example.org.
Philippe Vigand is Managing Director Patents Novagraaf Group
One does not simply post memes without reviewing the IP issues
An internet meme is an activity, concept, catchphrase or piece of media which spreads, often as mimicry, from person to person via the internet. Whether a photo, video, person, animal, song, action, GIF or anything else, memes are appearing everywhere, and with the strength of social media growing exponentially over the past decade, they've become a bit of a phenomenon.
Take a photo, add some wording and boom, you've created a meme. If you need assistance, there are web tools such as www.memegenerator.net, which make it easy to compose your own memes in minutes.
Well-known memes include the `Socially Awkward Penguin', `Futurama Fry' and `First World Problems'. They epitomise the popularity of this internet phenomenon: funny, shareable, relatable, easy to read, familiar and to the point; and, like all forms of creativity, there is IP in them too.
What are the copyright implications? Copyright gives the creators of artistic works the rights to control the ways in which their materials may be used. The rights include broadcasting, public performance and, most importantly, copying and adapting. The creator has the right to be identified as the author and to object to distortions of his work. When someone superimposes wording across an existing photograph, this is likely to constitute copyright infringement, as it is making a derivative work and copying.
One of the best-known memes, the Socially Awkward Penguin has been the subject of numerous copyright actions. The picture of a penguin on a blue background is superimposed with text describing socially-awkward scenarios. However, the original penguin picture is the property of National Geographic, and National Geographic has pursued and settled multiple infringement cases involving the meme.
Sharing or advertising? There is a real difference between someone adding to the `culture' of memes and someone attempting to be opportunistic and monetise them. If you are just sharing on social media, then you will probably be ok. Most creators are happy about their newfound meme status and are unlikely to object to non-commercial use of their work. Some meme owners may file takedown notices, but these would appear to be a rarity. Even where there are objections, attempting to prevent someone posting a meme on social media is likely to be quite ineffective (trying to control non-commercial uses), but could also be unlawful (in that it stops fair uses of the work).
Do you want to use a meme to market your business? If the use of the image is directly or indirectly related to your business or a commercial endeavour, it is important to make sure that you have the appropriate licences in place for commercial use. Such images can be obtained from stock photography companies (such as Getty, Shutterstock, BigStockPhoto etc). An alternative is to utilise one of the many sites where you can find free images (such as SXC, StockVault or MorgueFile).
However, be wary: The creation of new memes in marketing can be a bit of a minefield, especially if companies are using existing copyrights to create new memes. If the use is commercial, it is much less likely to be seen as `fair', but also could be seen as damaging. In addition, companies in the
public field will also make a much better target for a lawsuit. As many are aware, bad publicity can undermine reputation, influence and trust in a brand. And don't forget advertising standards and comparative advertising, not to mention privacy and image rights...
`Memejacking' is where brands use existing memes in their own marketing strategy. It can be a risky move as brands could be seen as `trying too hard' and not quite be able to tap into the viral wave of the meme. Whether memejacking or creating your own meme, any engagement with audiences through memes will often depend on how in-tune the brand is with their customers and it will really pay off to know the social media demographics.
There is a real difference between someone adding to the `culture' of memes and someone attempting to
be opportunistic and monetise them.
Can memes be protected as trademarks? One issue with filing for a trademark to protect an internet meme is the speed of the rise and fall of that meme. A meme can go viral in a matter of minutes, but often will have a narrow window of fame, before another comes along and takes it place.
This has not stopped companies seeking trademark protection however, with well-known examples of registrations, including GRUMPY CAT and DOGE. Where trademark protection is in place, there is the risk that using a meme on a product or for advertising could lead to a claim of trademark infringement, as consumers could be confused as to the source of a product.
companies or individuals have requested removal of memes, the action appears to spawn new parodies popping up. Downfall spoofs have been continually created for years, and Axl Rose of Guns n Roses fame has found that his objections to memes on his weight gain have only fuelled the fires more.
Companies should remember that IP laws, including those of copyright, will apply to social media in the same way as other fields, and what can be acceptable for an individual for the purpose of sharing a funny meme with friends is not going to be seen as acceptable for companies looking to make a profit. If you are using memes for commercial purposes, ensure too that there is no implied endorsement.
that while it may be difficult to control or limit a meme, encouraging its use or using countermemes to limit any potential damage could prove beneficial and help to strengthen the relationship between brands and their target audiences. n
Here today, gone tomorrow? Given the fast paced and fickle nature of the
internet, many memes are fleeting and will have a
very short lifespan. In addition, in instances where
Ultimately, memes are a form of parody and satire, and are becoming a secondary language in social media, with more and more people using visual images to communicate. Brand owners may find
Claire Jones is a Trademark Attorney at Novagraaf, based in London
the last word
A troll in the marvellous world of IP
Intellectual property is well known for `patent trolls', entities whose business model is to litigiously exploit the patent system for profit. Some such trolls also target trademarks and brands, although they are less prevalent in the sector. However, there is another type of troll that has made a big impact on the IP world.
The story dates back to 2008, when illustrator Carlos Ramirez, then an 18-year-old American student, created and posted online a gruesome comic sketch that went on to become the `Trollface' meme. In a few hours of his original post, the image had gone viral, replicated hundreds, if not thousands, of times. So far, so normal: the use and reuse of images on the internet is at the very core of the system.
Should you register copyright? The US is one of the few countries to have a copyright registration system in place. There is no such system in the UK, Germany or Switzerland for example, whereas others e.g. France and Canada operate voluntary registration systems only. Of course, this does not mean that such images do not benefit from copyright protection. Such protection will come into being automatically for an internet meme if it fulfils the conditions for copyrightable work. Note that this is a thorny issue in countries like Switzerland however, where copyright does not extend to anything and everything. n
This is where the story becomes interesting. Seeking to retain some ownership of his image, Ramirez decided to protect the drawing by registering it at the US Copyright Office. His registration dates back to 2010 and still appears in the register under the description:`A comic about the nature of internet trolling'. The registration gives Ramirez the opportunity to record profits in excess of $100,000.00 e.g. through licensing, and to enforce his rights against any unscrupulous profiteer. Interviewed in 2015 by the online magazine Kotaku, Ramirez says that, when it comes to enforcing his copyright, he chooses his battles: non-commercial usage is tolerated, whereas any attempt to use the picture without permission to make a significant financial profit is not.
Anca Draganescu-Pinawin is a Trademark Attorney at Novagraaf, based in Geneva
The use and reuse of images on the internet is at the very core of the system.
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