Intellectual Property

What is Intellectual property?

 

Intellectual property represents the property of your mind or intellect.  In business terms, this also means your proprietary knowledge (or “know-how”).  As intellectual property is proprietary in nature, it is capable of being assigned the exclusive rights of ownership (ie to use at the exclusion of others).

Types of IP:

  • Patents for new or improved products or processes; 
  • Trade marks for letters, words, phrases, sounds, smells, shapes, logos, pictures, aspects of packaging or a combination of these, to distinguish the goods and services of one trader from those of another;
  • Designs for the shape or appearance of manufactured goods;
  • Copyright for original material in literary, artistic, dramatic or musical works, films, broadcasts, multimedia and computer programs;
  • Circuit layout rights for the three-dimensional configuration of electronic circuits in integrated circuit products or layout designs;
  • Plant breeders rights for new plant varieties; and
  • Confidentiality/ trade secrets including know-how and other confidential or proprietary information.

 

Of these types of IP we will look at Patents, Trade marks, designs, copyright and trade secrets.

Patents

A patent is a right granted for any device, substance, method or process which is new, inventive and useful.

A patent is legally enforceable and gives the owner the exclusive right to commercially exploit the invention for the life of the patent. This is not automatic-you must apply for a patent to obtain exclusive rights to exploit your invention.

Case study:

In 1972, Frank Bannigan, Managing Director of Kambrook, developed the electrical power-board. The product was hugely successful and was the basis for Kambrook’s growth to become a major producer of electrical appliances.

However, the power-board was not patented and Kambrook ended up sharing the market with many other manufacturers.

According to Mr Bannigan,

‘I’ve probably lost millions of dollars in royalties alone. Whenever I go into a department store and see the wide range of power-boards on offer, it always comes back to haunt me.’

There are two types of patents in Australia;

  • a standard patent gives long-term protection and control over an invention for up to 20 years.
  • an innovation patent is a relatively fast, inexpensive protection option, lasting a maximum of 8 years.

Patents give effective protection if you have invented new technology that will lead to a product, composition or process with significant long-term commercial gain.

In return, patent applicants must share their know-how by providing a full description of how their invention works. This information becomes public and can provide the basis for further research by others.

You cannot patent artistic creations, mathematical models, plans, schemes or other purely mental processes.

Australian patents are administered by the Patent Office of IP Australia, a Federal Government organisation.

Some examples of patents that have been granted in Australia are:

Bishop’s Steering Gear
Cochlear’s Bionic Ear
Dynamic Lifter
Orbital Engine
Hills Hoist
Victa Lawn Mower
Shepherd Castors
Hume Pipes
Automatic Totalizator
Sunshine Stripper Harvester
Refrigeration in 1868

Trade Mark

What is a trade mark?

A trade mark can be a letter, number, word, phrase, sound, smell, shape, logo, picture, aspect of packaging or any combination of these.

Letter:

Number: 3 for Hutchinson’s mobile phone network

Word: Apple

Phrase: “Where Do you Want to Go Today?”

Sound: Harley Davidson motorcycles/ Intel start up

Smell: Chanel No 5

Shape: BHP logo

Logo: Golden arches

Picture:

Packaging: Coke bottle/ Toblerone chocolate.

It is used to distinguish goods and services of one trade from those of another. This means you can’t register a trade mark that directly describes your goods (e.g. radios) and services (e.g. electrician).

While it is difficult to register a geographic name or surname, someone who has used one extensively in the marketplace for a considerable period of time may be able to achieve registration.

You don’t have to register your trade mark to use it

However, registration is advisable because it can be an expensive and time consuming exercise to take action under common law.

A registered trade mark gives you the exclusive legal right to use, license or sell it within Australia for the goods and services for which it is registered.

Time limit

Initial registration of a trade mark lasts for 10 years. After that time you can continue to renew your registration for successive periods of 10 years on payment of the appropriate fee.

A trade mark can therefore have an infinite life representing significant business value. You must, however, use your mark in a bona fide way to avoid it becoming vulnerable to removal on the grounds of non-use.

Who administers trade marks?

Applications should be filed with the Trade Marks Office of IP Australia. They will examine your application to see if it meets legislative requirements.

Also, there is protection against misrepresentation under the trade practices or fair trading legislation and it is also possible to take action under common law.

Designs

 

A design is the overall appearance of a product. The visual features that form the design include the shape, configuration, pattern and ornamentation which, when applied to the product, give it a unique appearance. A registered design can be a valuable commercial asset – registration of a design gives the owner protection for the visual appearance of the product but not the feel of the product, what it is made from or how it works.

To be registrable, a design must be new and distinctive. ‘New’ means the identical design has not been publicly used in Australia nor has it been published in a document within or outside Australia.

A design is ‘distinctive’ unless it is substantially similar in overall appearance to other designs already in the public domain.

For example, a design would not be considered new if it had been ‘published’ on the Internet before the date it was filed (or its priority date, whichever is earlier). Prior publication may be exempt in limited circumstances.

Please note:

Design registration is intended to protect designs which have an industrial or commercial use. Designs which are essentially ARTISTIC WORKS are covered by copyright legislation and ARE NOT ELIGIBLE for design registration. The protection you receive is only for the visual appearance of manufactured products, not how it works.

Duration of protection

Registration initially protects your design for five years. You can then renew the registration for a further five years.

Who administers designs?

Applications should be filed with the designs section of IP Australia. They will assess whether your invention is new and if it meets the legislative requirements.

To help you understand designs more, we also have a number of design examples:

Electric Jug
Ken Done Bedlinen
Sebel Metal Frame Chair
A Folding Chair
A Dunlop Tyre
Speedo’s
Canvas Chair
Metal Fencing
Portable Cooler
Squatters Chair
Tap Sealing
A Toy Building Block
A Rocking Kangaroo

Copyright

What is copyright?

Copyright protects the original expression of ideas, not the ideas themselves. It is free and automatically safeguards your original works of art and literature, music, films, sound recording, broadcasts and computer programs from copying and certain other uses. Copyright is not registered in Australia.

Material is protected from the time it is first written down, painted or drawn, filmed or taped. Copyright material will also enjoy protection under the laws of other countries who are signatories to the international treaties, of which Australia is a member.

Copyright protection is provided under the Copyright Act 1968 and gives exclusive rights to license others in regard to copying the work, performing it in public, broadcasting it, publishing it and making an adaptation of the work. Rights vary according to the nature of the work. Those for artistic works, for instance, are different to those for literary and musical works.

Although making copies of copyright material can infringe exclusive rights, a certain amount of copying is permissible under the fair dealing provisions of the legislation.

Copyright doesn’t protect you against independent creation of a similar work. Legal actions against infringement are complicated by the fact that a number of different copyrights may exist in some works – particularly films, broadcasts and multimedia products.

Consider using a copyright notice

Although a copyright notice with the owner’s name and date is not necessary in Australia, it can help prove your ownership of the copyright, and is necessary to establish copyright in a few overseas countries. It can also act as a deterrent to potential infringers.

Copyright is lost if the owner applies a three-dimensional artistic work industrially. In such a case, it is necessary to register the design if protection is required.

Duration of copyright

This varies according to the nature of the work and whether or not it has been published.

Depending on the material, copyright for literary, dramatic, musical and artistic works generally lasts 70 years from the year of the author’s death or from the year of first publication after the author’s death.

Copyright for films and sound recordings lasts 70 years from their publication and for broadcasts, 70 years from the year in which they were made.

 

Trade Secrets

 

What is confidentiality/trade secrets?

A trade secret is both a type of IP and a strategy for protecting your IP. It can provide effective protection for some technologies, proprietary knowledge (know-how), confidential information and other forms of IP. Examples may be;

  • client lists;
  • supplier lists;
  • possesses; etc

A confidentiality agreement is often used to stop employees from revealing your secret or proprietary knowledge during and after their employment or association with your business.

  • Make sure you back up your trade secret with signed confidentiality agreements with every person who has knowledge of the secret.

If an agreement is breached, you will have evidence of what was agreed and protection through the law.

When is a trade secret strategy appropriate?

Perhaps your IP is unlikely to result in a registrable right, or maybe you want to retain exclusive use beyond the term of a patent.

A trade secret strategy is appropriate when it’s difficult to copy the construction, manufacturing process or formulation from the product itself; that is when reverse engineering is unlikely.

Be aware

Secrecy does not stop anyone else from inventing the same product or process independently and exploiting it commercially. It does not give you exclusive rights and you are vulnerable when employees with this knowledge leave your firm.

Trade secrets are difficult to maintain over longer periods or when a larger number of people are made privy to the secret.

Proving a breach of confidentiality under common law can be complex and is potentially more costly than defending registered rights.

  • Ask contractors and employees to provide written undertakings not to compete with your business after they leave in addition to signing a confidentiality agreement. It is often much easier to prove this than to prove breach of confidentiality. These undertakings, however, are difficult to enforce and need to be prepared by your legal adviser, as you need to be careful that the undertaking does not restrict the contractor’s or employee’s right to earn a living.

What if someone infringes my trade secret?

Common law provides protection for infringement of trade secrets, breach of confidentiality agreements and passing off trade marks.

Who owns intellectual property?

 

Just because you created it does not mean you own it.  Rights at contract/ commonlaw.

Contract:

What does this say?

Legislation

Patent:

(a)    the inventor; or

(b)   would, on the grant of a patent for the invention, be entitled to have the patent assigned to the person; or

(c)    derives title to the invention from the inventor or a person mentioned in para (b).

Design

(a)    The person who created the design; or

(b)   If the designer created the design in the course of employment, or under a contract, with another person – the other person, unless the designer and the other person have agreed to the contrary.

Copyright

 

Literary works:

(a)    the author;

(b)   If the work is written for a magazine or a newspaper under a contract of service, then the author only owns copyright for reproduction of the work for inclusion in a book – otherwise the proprietor owns copyright.

Sound recordings and film:

The creator owns the copyright subject to any agreement to the contrary.

Commonlaw:

Spencer Industries, Donoghue  and UWA.

Copy right – Moral Rights.

 

How do you protect your intellectual property?

 

With the exception of copyright and circuit layout rights, which are automatic, you must take formal steps to register your IP and obtain the legal rights of ownership. Otherwise, you will have to rely on common law to prove ownership and prior use for non-registered IP.