In the second in this series on intellectual property, Kathryn Robinson explores protection, exploitation and dealing with disputes.
This article looks at protection for the main types of intellectual property: trade marks, copyright, patents and designs. We also look at how to exploit products or services that are protected by these types of intellectual property and what to do in the event of a dispute involving the unauthorised use of your intellectual property, or your unauthorised use of someone else’s intellectual property.
Protection of intellectual property
If you have been producing a product or offering a service for some time, or create a new one, that product or service may attract intellectual property rights automatically (unregistered trade mark, copyright or unregistered design). Alternatively you may wish to protect the product or service by applying for a trade mark, patent or registered design protection.
A detailed assessment of which intellectual property rights might attach to the product or service should be made as soon as possible, as this will help prevent the theft or dilution of any potentially valuable work and ideas.
If an employee creates a work during employment, the employer will own the intellectual property rights
The default position is that, if an employee creates a work or design, or invents something during the course of his or her employment, the employer will own the intellectual property rights arising in the work, design or invention. If you set out to deliberately create intellectual property, you should take care to ensure that, if people who are not your employees help to create the intellectual property, an agreement that addresses ownership of the work done is in place at the outset. Without this, you may find other people have ownership rights of the work done and your organisation cannot claim any resulting intellectual property for itself alone.
If an organisation identifies new intellectual property, there may be an opportunity to exploit it by selling it (which involves an outright transfer of the intellectual property for value) or licensing it in return for a royalty (which involves keeping ownership but granting a permission for others to use it in return for, typically, a sum of money). When successful, licensing can generate a regular income stream.
Having identified intellectual property and any exploitation possibilities, there are a few things to consider. Licensing can involve some legal expense when setting up a suitable scheme. You also needs to consider the risks of exploitation, which depend to a large extent on what you will be doing. For example, if you hope to manufacture and sell a product, there may be product liability and insurance issues to consider. Clearly the manufacture and sale of medical devices or drugs requires significant insurance backing, not to mention product recall and other regulatory compliance issues.
Another example is the liability that can result from training if the training is not done properly. Although your organisation will have in place insurance for internal staff training, the insurance and liability issues of offering training or services to external customers needs to be thought through.
If NHS insurance schemes do not cover the risks, top-up insurance is one way of dealing with these. Another possibility is to partner with a commercial organisation that is willing to bear the risks of commercial exploitation, not least as they can often bring other much needed skills and expertise to the partnership.
The most common intellectual property disputes relate to ownership and unauthorised use.
Often, from the start, there is no agreement in place between organisations that have collaborated to produce a product or service, such that, when the economic value of the product or service becomes apparent, a dispute ensues relating to ownership of the underlying intellectual property rights. Sometimes the rights are jointly owned and, if this is the case, the product or service cannot be exploited without the consent of both owners. Sometimes the organisation that paid for the work to be created is not the owner; if there was no agreement to transfer the rights, they stay with the creator of the work.
Sometimes an organisation uses someone else’s intellectual property, be it innocently or deliberately. In this regard, the most common NHS scenarios involve using someone else’s software or tapping into someone else’s database without a licence, or copying someone else’s training materials or other copyright work.
The costs of going to court to resolve a dispute can outweigh the value of the intellectual property
There is an incentive to resolve disputes by negotiation or mediation, not least as the legal costs of going to court to resolve a dispute can often outweigh the value of the intellectual property. Negotiation or mediation may lead to one party agreeing to pay the intellectual property owner a lump sum or an ongoing licence fee, usually by way of settlement of the issues.
The UK Intellectual Property Office offers cost effective ways of resolving some disputes in a forum. For example, it offers cheaper methods of resolving disputes relating to patent infringement because court proceedings for such disputes are often expensive.
What are the main types of intellectual property?
A trade mark is a sign that can distinguish your organisation’s products and services from those of competitors. Trade marks can be unregistered and protected by the law of passing off (if your organisation can show sufficient goodwill and reputation existing in the mark and sufficient use of it) or, alternatively, registered and protected by Act of Parliament.
Registration gives better protection than relying on unregistered rights because a granted trade mark is a monopoly right to use a particular word, words or logo for particular products or services, whereas several different people may lawfully be able to build up a reputation in an unregistered name in different parts of the UK. As such, if you are looking to build brand power in a unique product or service, a registered trade mark is the best way to go about this.
An organisation can obtain a registered trade mark if it is distinctive for the products and services that it provides, that is, a registered trade mark must be able to distinguish your products and services from those of a different organisation.
Some things are not registrable as trade marks, including signs that:
- describe your organisation’s products or services or any characteristics of them, for example, signs that show the quality, quantity, purpose, value or geographical origin of your organisation’s products or services (in the main this prevents registration of what are merely descriptive signs);
- have become customary in your organisation’s line of trade;
- are not distinctive.
A registered trade mark must be renewed every 10 years to keep it in force.
A patent protects new inventions including what they do, how they do it, what they are made of and how they are made. It gives the owner the right to prevent others from making, using, importing or selling the invention without permission. To obtain a patent, your invention must:
- be new;
- have an inventive step (meaning that is not obvious to someone who has knowledge and experience in the subject area of the invention);
- be capable of industrial application.
By virtue of public policy, some things are not patentable, including:
- a scientific or mathematical discovery, theory or method;
- a literary, dramatic, musical or artistic work;
- a way of performing a mental act, playing a game or doing business;
- the presentation of information, and some computer programs;
- a method of medical treatment or diagnosis.
If your organisation is successful in obtaining a patent, it must renew it every year after the fifth year in order to obtain up to 20 years of protection.
Copyright exists in “literary” (that is, written), dramatic, musical and “artistic works”.
In any organisation, there will be a wide variety of written works that have been created by employees and attract copyright, including software (composed as it is of written “code”), training materials, reports, records, procedures, methods and processes. “Artistic” works encompass charts, graphs, maps and photographs.
The key is that to attract copyright:
- the creator(s) of the work must have expended sufficient skill, labour or judgement in its creation – although the threshold is traditionally low so that even a very small amount of effort is enough to generate a copyright work;
- the work must be original (meaning that it has not been copied from anyone else);
- the work must be more than “de minimis”, meaning that it is not trivial (again, the threshold is traditionally low in this regard).
Where copyright exists in a work, it arises automatically and, in the UK, copyright does not need to be registered in order to be protected.
Copyright gives its owner the right to prevent others from copying the whole, or substantially the whole, of the work without permission. What is a substantial copy of a work is a subjective assessment made by considering the quality and quantity of work taken. It is usually obvious if someone has copied a work; one or two identical sentences are enough to give things away, however hard the copier has worked to make his own work different.
Where copyright exists, it endures after the death of the creator for up to 70 years. This is a long time, and makes it one of the longest lived intellectual property rights. Some argue this is too long a period as it prevents works from being adapted and recirculated within society.
A registered design is “the appearance of the whole or part of a product resulting from the features of, in particular, the lines, contours, colours, shape, texture or materials of the product or ornamentation”. This means a registered design protects how a product or part of it looks, but cannot (unlike a patent) protect how it works, or the idea or concept behind it.
An organisation can register a three-dimensional product, such as a medical device, or a two-dimensional decoration, for example, a pattern or logo intended for display on a product. To obtain registered design protection, a design must:
- be “new”;
- have “individual character”.
A design is considered “new” if no identical design has been publicly disclosed in the UK or the European Economic Area. For example, a design would not be considered new if it had appeared on a website in the EEA before the date of application. The term “identical” covers designs whose features differ only in “immaterial details”.
“Individual character” means the appearance of the design (known as the overall impression) is different from the appearance of other designs that are already known.
The following designs cannot be registered:
- those that are not “new” and that do not have “individual character”;
- those the shape of which are dictated solely by technical function (the rationale behind this being that a registered design protects how something looks and does not constitute monopoly protection for how it works).
Once granted, a registered design can help you prevent third parties from creating designs that are too similar for up to 25 years.
An unregistered design enables you to stop anyone from copying the shape or configuration of a product but does not give any protection for any two-dimensional decoration on its surface. Protection lasts either 10 years after the first marketing of a product or 15 years after the creation of the design, whichever is earlier. If protection exists, it arises automatically and does not need to be registered (like copyright, but unlike registered design).
An owner of an unregistered design can prevent others from making copies of the whole or substantially the whole of the design (which is similar to the test in copyright). It is more difficult to prove infringement of an unregistered design because an organisation must prove that the design has been copied or that the opportunity to copy existed; a registered design, on the other hand, gives protection from someone else making similar copies of what is registered, whether the opportunity to copy existed or not.
Kathryn Robinson is a senior solicitor at Hempsons