Recent changes to the law have brought a focus on confidential information in the resources sector. Intellectual Property needs to be valued by everyone in the organisation and protected by appropriate means. In this article, Leanne McClurg and Megan Comerford (with Intellectual Property Partner, Tim O’Callaghan) look briefly at the changes to the law and take the opportunity to explore the types of Intellectual Property resources companies may typically hold.
On 28 August 2012 the Western Australian government passed new regulations to petroleum legislation (both on shore and off shore) requiring the disclosure of chemicals used for drilling. These new regulations require Operators to disclose to the Department, via their environment plan or summary environment plan, details of any chemicals or other substances used in or added to fluids which are to be used for the purposes of drilling or hydraulic fracturing or are otherwise introduced into a well or reservoir.
This has raised concern for companies whose business it is to supply those fluids, as often the components of the fluids form a trade marked product or constitute confidential information. By releasing such confidential information, the company risks losing the commercial or competitive advantage on which it’s business is built.
This article considers the types of Intellectual Property that companies operating in the resources sector might typically hold.
Operators and non-operators should be aware of the confidential information they hold when they enter into negotiations or discussions with prospective collaborators or joint venture partners. It is usual to insist on the execution of Confidentiality or Non-Disclosure Agreements to prevent the other party from disclosing or misusing the information. Typically that information may include technical or commercial information or data (including geological, geochemical, geophysical or engineering information), maps, models or any other material related to exploration or production activities over the area of interest. It can extend to the content and status of communications between the potential joint venture parties or to legal or financial information in some cases.
What companies may not be aware of however, is that confidential information may be protected by law, even where a Confidentiality or Non-Disclosure agreement has not been formalised. In order to attract this protection, the information must be confidential, the recipient must know it is confidential and a breach of this confidence must have occurred resulting in detriment to the owner who disclosed the confidential information.
Patents protect inventions. A patent is effectively a government-granted monopoly over an invention, which allows the owner to have the sole right to exploit that invention during the period of the monopoly, typically 20 years. It is a powerful and easy form of intellectual property protection. For mining and oil & gas companies, patentable inventions may arise out of specified research and development projects or may be developed over time in the course of running the day-to-day business. It may be the mining or oil & gas company itself that develops inventions, or supply and service companies who then sell the product of their invention on.
Typically mining and oil & gas companies might apply for patents relating to methods and processes, as well as machinery. For example BP has filed a number of patents in Australia, including “Reduced RVP oxygenated gasoline composition and method”. Woodside has acquired a patent for “Dehydration of a natural gas in an underwater environment”, and Chevron recently acquired a patent for “Molecular sieve SSZ-74 composition of matter and synthesis thereof”.
Patents must be applied for before commercial use commences. It is therefore important to have a process in place to identify patentable inventions when they are created, and to take steps to protect them before they are commercialised.
A trade mark is a badge of origin. It is a sign which his used to distinguish your goods and services from the goods and services of others – such signs can be brand names, logos, numbers, tag lines, packaging, shapes, sounds, scents and colours. It is possible to protect a trade mark without registration, but proof is required that reputation has been built up in the trade mark to such an extent that use of the trade mark by someone else would be misleading.
Benefits of registering a trade mark with IP Australia include:
- It’s not necessary to show that you have reputation in the registered trade mark to prove infringement. In fact, it is preferable to register a trade mark before time and effort is spent establishing reputation in it
- A registered trade mark is infringed without having to show that consumers are likely to be misled or deceived; only that the mark is substantially identical or deceptively similar and is being used in respect of the same or similar goods and services
- Having a trade mark on the Trade Marks Register is an important part of trade mark protection because most people and companies will check the register before they choose their own trade mark
- Registered trade marks can be sold or transferred without having to sell the whole business. This means that the registered trade mark has some value and a company that has a portfolio of registered trade marks can point to that fact as a sign of its value.
Registered trade marks typically range from standard logos to new product names or lines. For example, Santos Limited has the following registered trade marks in its extensive portfolio:
Click here to view diagram.
and the words “MOOMBA CARBON STORAGE”.
Registration of trade marks only has effect within the country of registration. Mining companies working in a foreign country should check the Trade Marks Register in that country to make sure that it is not infringing registered trade marks of others. It should also register its own trade marks in that country, to prevent others from doing so.
In addition to the above forms of intellectual property a company may also have copyright in any original work or other subject matter that has been reduced to a material form.
Reports it produces in relation to its operations, safety and training manuals, product specifications, instructions, working papers describing inventions, reports to clients, and precedent contracts, can all attract copyright protection. The company’s logo, diagrams and drawings, videos, DVDs, websites and social media sites can also attract protection. Software source code is also the subject of copyright.
These tools may not form the core business of a mining or oil & gas company, but they still have value.
Ownership of copyright is often an issue. In the absence of prior agreement to the contrary, a contractor will own copyright in works created for a customer, but where an employee creates a work, copyright is owned by the employer.
As a consequence many mining companies do not own, and therefore cannot enforce, copyright in the source code, logos, reports and drawings, which are created by contractors.
Intellectual Property in Joint Operating Agreements
When new intellectual property is created in the course of a joint operation, it can be difficult to determine who owns that IP and who has control over it. Therefore, as well as providing confidentiality clauses, Joint Operating Agreements will also often contain provision for intellectual property that has been created in the course of the Agreement. The AMPLA Model Petroleum Exploration Joint Operating Agreement, for example, includes provision for “JV Intellectual Property”, which includes business names, trademarks, copyright, patents, discoveries, inventions and similar rights developed by the Operator and paid for from the Joint Account. It also covers all information, data and records relating to the Title Area, including maps, surveys, photographs, and sampling reports.
Interestingly, the Agreement provides that each Participant may use any of the JV Intellectual Property outside the Title Area in activities other than the Joint Operations as long as the intended use is disclosed to the rest of the participants and is subject to the obligations of confidentiality in the agreement. These provisions prevent misuse of the information but allow its value to be maintained outside of the joint operation.
The joint ownership of intellectual property creates its own set of challenges and issues which are too many and varied for this article.
Intellectual property has value! Progressive companies appreciate that value, and know how to protect and exploit it.