LegalWatch Updates

Home / News

Intellectual property (IP) is one of those concepts whose content is largely familiar (copyright, patents etc) but which is exceedingly difficult to define. Broadly speaking, IP is a generic term for the various rights or bundles of rights which the law accords for the protection of creative effort – or, more especially, for the protection of economic investment in creative effort. Intellectual property is important because it confers exclusive legal rights which can be very valuable. It converts knowledge into identifiable assets which can be transferred, licensed and sold.

Management issues

There are steps you can take to understand the different types of IP protection available, and the best strategies for your circumstances. IP rights are like tools in a toolbox – each right has different features and uses, and is suited to different circumstances and objectives. It is important for your organisation to effectively protect and value its IP assets to gain maximum benefit.

Beware the publicity trap – protect before you publicise

Each type of IP has a range of criteria that must be met for a right to be granted. For example, to obtain patent protection, the item you want protection for has to have an inventive step, i.e. no one else in the world, now or in history has invented what you have. However, most registered IP rights also have eligibility criteria that state the IP must be ‘new’ and has never been disclosed or revealed in public. If you have publicly disclosed your design, new invention or plant variety before applying for registration, you may have lost your ability to protect it. This means that you cannot have disclosed or shown the invention in public prior to seeking registration. The ‘public’ does not need to be a significant number of people – even one could be too many. You should be aware of this before you include a new design or invention in your latest catalogue or exhibition stand, as such a move can severely limit your ability to secure a registered IP right.This also applies to the internet – many organisations fall into the trap of promoting their new design and invention online before securing registration.

If you don’t intend to register your design, public disclosure can be a strategic move to prevent others from obtaining registration of a similar design. While this doesn’t give you any rights to the design, it prevents others from obtaining registration.  IP Australia has a formal publication option available for those wanting to pursue this strategy.

Trade secrets and confidentiality agreements

Trade secrets are most effective in cases where the product or process is difficult to reverse engineer – that is, difficult to recreate. One disadvantage is that trade secrets do not provide any legal security against an independent competitor inventing an identical object. By choosing to keep certain information about your business a secret, you can keep your organisation’s IP options open (as discussed previously, designs and patents can only be registered if they are new and have not been made public).

In Australia, the protection of trade secrets and confidential information is prescribed by common law. Using this method of protection therefore needs to be managed by the organisation wishing to keep something a secret. Protection is usually maintained by not disclosing the secret information at all, or by disclosing it to only a very limited number of people. When disclosure is unavoidable, confidentiality agreements should be used between the IP owner and those to whom the information will be disclosed. The purpose of these agreements is to contractually agree to the terms of the use and disclosure of the confidential information and provide written evidence of such an agreement.

Confidentially agreements can be made with anyone you wish to impose an obligation of confidence on in relation to the use and disclosure of your confidential information, including employees, business partners, business associates or research academics.

When drafting confidentiality clauses and undertakings, consider the following:

If you wish to impose an obligation of confidence on an employee, be sure it does not amount to an unreasonable restraint on that person’s right to earn a living. The courts will not enforce an unreasonable restraint. Before disclosing confidential information to a joint venture partner or financier ask that person to sign a confidentiality agreement.

Below is a checklist of key aspects to include in confidentiality agreements:

·         Identify each person who has access to the information

·         Be very clear about what information is to be treated as confidential

·         Identify the use to which the information can be put (e.g. evaluating a proposal)

·         Specify the number of copies that may be made of the confidential information

·         Specify when to return originals, and when to return or destroy any copies

·         Set a time limit for considering the information, or a date for its return.

If agreement is reached on a proposal, any confidentiality agreement is usually superseded by that agreement. As the relationship moves forward, ensure that the level of confidentiality required is reconsidered and, if necessary, establish revised confidentiality obligations.

Review your IP

A regular review of IP is part of good management practice but is commonly overlooked by many organisations. Whilst you may regularly undertake a stock take of your tangible assets to help you make commercial decisions, the same process should apply when accounting for your intangible (IP) assets. Good practice would see a review of IP included in the half yearly management sign-off. In the same way that management confirm the safe keeping of physical fixed assets, they also confirm the ongoing registration, ownership and control of IP assets.

LegalWatch - Digital Age Lawyers

Join LegalWatch For Free

Join LegalWatch for free to stay in touch with the latest legal issues that affect your business.

 

We'll keep you up to date with regular emails and content in our LegalWatch Portal!

You've subscribed to LegalWatch. Keep an eye on your inbox!