Intellectual Property Rights
There is a wide variety of intellectual property rights that may be relevant to the protection of your work and investment. These include copyright, database rights, trademarks, patents and design rights. In the context of IT law, copyright, trademarks and database rights are to the most relevant.
This can exist at all levels in all sorts of creations. There is no need to register copyright – it comes into existence by virtue of the act of creation and generally lasts up to 70 years after the death of the author. It can be in written words, software, photos, sound recordings, films, graphics and other forms.
Copyright protects the expression of an idea, not the idea itself. It does not protect against independent development of the same idea, only against copying of another’s work.
Ownership of copyright in a work will allow the owner to prevent unauthorised use of the work, such as the making of copies or placing the work on the internet.
Trade marks are signs or symbols used by a business (or trader) to distinguish its products or services from those of other traders and generally becomes the identifier of a business by the general public.
These can be registered or unregistered. If you use a brand name then, after a certain amount of time, goodwill starts to attach to the name and this can be protected through the courts by means of an action for “passing off” if someone else uses your brand.
However, far better protection can be obtained by way of registration of the trademark at the UK Intellectual Property Office. Such registration gives you an effective monopoly of use. If one wishes for wider geographic protection, a Community Trademark can be applied for through OHIM in Alicante in Spain.
Defined in the legislation as “a collection of independent works, data or other materials which are arranged in a systematic or methodical way and are individually accessible by electronic or other means”, database rights cover a wide variety of valuable business assets including customer lists and mailing lists and card indexes, customer feedback, usage information.
Increasingly, businesses are now understanding the value ascribed to data. Where a business has collected data that can be compiled in a useful manner, it may hold significant value to third parties such as research companies and can be licensed at a full price creating a separate source of revenue for businesses.
Assignments of Intellectual Property Rights
An intellectual property assignment is a transfer of an owner’s rights, title and interest in certain intellectual property rights.
Given the value ascribed to intellectual property rights, it is important that your intellectual property portfolio is protected. One key component of protecting these rights is ensuring that you are the legal owner of the intellectual property you believe to be yours.
It is essential that when another person is doing work for your business that there is an assignment of intellectual property rights from that person to your business to ensure that you have rights over the work.
If your business hires an employee, any work completed during the course of their employment automatically becomes the property of the employer. However, this is not the case for consultants or other contractors engaged by you. Unless there is an assignment of intellectual property rights in favour of the business in your engagement terms with them, then your business will not own the intellectual property rights in the work or deliverables produced by that consultant or contractor, even though you have paid for them. This could lead to several costly legal issues down the line and could even jeopardise investment in or sale of your business.
Therefore, having in place a valid and effective assignment is essential.
Licence of Intellectual Property Rights
A licence is an agreement where the licensor grants the licensee permission to use the licensor’s intellectual property.
Businesses often license their intellectual property rights to their customers or other businesses. For example, if you are providing a software as a service, or you are allowing a third party to host an event using your brand.
Owners of intellectual property, however, need to be careful that the licence includes appropriate restrictions and controls which protect your business and its intellectual property.
Well written and thought out licence agreements can provide you with the required legal protection and comfort when licensing out your intellectual property rights.
Intellectual Property Rights Warranties and Indemnities
When a business grants another party permission to use its intellectual property rights, it is expected that use of those intellectual property rights is legitimate and will not breach another third party’s intellectual property rights. If you breach a third party’s intellectual property rights, there is a risk of facing legal action and incurring significant losses.
As such, it has become accepted practice that licences will include a warranty from the licensor that use of the licensed intellectual property rights will not infringe another’s intellectual property rights. Such agreements may also include an indemnity from the licensor (which is a contractual promise to provide a pound for pound reimbursement) against any losses suffered by the licensee if that warranty proves to be unfounded. There are however many permutations of the warranty and indemnity which can significantly alter their scope and effect. The provision of an indemnity is quite a serious undertaking and therefore it is important always to obtain legal advice when offering or receiving one to ensure that is sufficient and does not expose you to any unnecessary risks.
Matters are further complicated where the developer of software has integrated or otherwise deployed or relied upon open source software. This may well have implications in respect of the ownership of the intellectual property rights in the software and the exposure to third party intellectual property right infringement claims. For more information on open source, please see Open Source Software and Associated Intellectual Property Right Issues.
Please click here to email Simon Halberstam, Head of Technology Law, or call 020 3206 2781.