5 Facts Everyone Should Know About Intellectual Property

Table of content

Story time

Let’s start with a small story –

Sandy Fowler invented the tea bag, however he did not file a patent for his invention. It is reported that he sold his idea to a tea merchant for £150. This later got patented bringing millions in revenue. Reports indicates that “had he patented the tea bag and licensed his invention for a royalty of only 1%, he would have earned millions” (Ref: Bristows, IP Licensing Handbook, 2011)

The above is what could happened when IP is not considered as part of business development. Many people do not benefit from their intellectual property because they lack the knowledge and understanding of what it entails.

To avoid being in Fowler’s situation, below are 5 key fact about IP you should know.

What is IP?

Intellectual property (IP) refers to creations of the mind. They are abstract and intangible properties.

IP is EVERYWHERE

IP is everywhere. Look around you and you’ll see IP everywhere. Your shoes, clothes, cars… name it! The device you are using to read this post likely has a patent to make it function. The skincare products you use may have a trademarked logo assigned to it and a trade secret to protect the formulation ingredients. The books you buy has copyright attached to protect the writer’s effort. IP is around us and having an awareness of this makes us appreciate the creativity of others.

IPs are INTANGIBLE ASSETS

2. IPs are intangible assets. The richest people made their money through IP. IPs are non-physical properties and they cannot be touched. Their value is derived from how it is used and requires reputation building i.e. valid for as long as it operates/used. An example is a brand name. The name will be a valid IP – (trademark, registered or unregistered) for as long as the company/business is still in operation. Ever wondered why brands invest in adverts? Another example is the creation of a basic mailing list – this falls under trade secrets as it is not known by others and can be used by the owner to generate income, such as through subscriptions and any other marketing medium to generate money.

Intangible properties can be valued, bought and sold. To make an intangible asset valuable it is essential to build a reputational goodwill for brand recognition.

Despite the intangible nature of intangible assets they can be as valuable and are afforded the same level of protection similar to physical properties.

A key medium to protect intangible assets is to have a contract in place to define the right.

There are 4 main kinds of IP/ broad categories of IP

3. There are 4 main kinds of IP: patent, trade mark, copyright, and trade secrets.

PATENT – Achieving the mark of a patent is quite a heavy feet. A patent is an invention with a technical effect – criteria includes novelty, inventive step and capable of industrial application. A patent is a national right and lasts for 20 years. Patent are not restricted to high-tech. But not all patent are valuable. An patent was granted for a banana case, but how useful is that considering that a banana comes wrapped?

TRADE MARK – This covers brand names, it can also cover slogans, tagline and wordings protected by the brand. Registered brand names will have the ® sign while unregistered have the ™ sign. A trade mark (mark that is used to identify a trade/business) must be a sign that is representative and distinctive. Having a brand name is not sufficient to gain trade mark protection. A generic name will not qualify for trademark. A trademark can be lost if the name becomes generic – such as elevator, aspirin and many other names were once a trademark.

COPYRIGHT – Copyright is a unique form of right as it does not require registration. It is a right afforded to literary and artistic work. The key criterion is the element of originality. Copyright works includes literary works such as books, database, software, computer programms, apps, paintings, images and so on. It has a broad range of protection and the right to a copyright works arises automatically.

TRADE SECRETS – Every intellectual property right started life as a trade secret. Trade secrets is regarded as the “secret sauce” of a product. Data is a huge form of trade secrets provided it meets the criteria. This covers confidential information. A trade secret is an information that is of confidential nature and not known to many people, has commercial value because it is secret, and reasonable steps have been taken to maintain the secrecy of the information. Examples of trade secrets are manufacturing procedures, unpatentable inventions, recipes, formulae, pricing process, customer list, business strategies etc. Similar to copyright a trade secret is an unregistered right as it is secret – don’t tell anyone! (I’m quite biased to say that trade secret is the strongest form of IP, as this is my specialism through my thesis)

IP operates as a NEGATIVE Right

4. IP operates as a negative right. Intellectual property are rights to exclude and stop others, not right to use. When you have an IP, you have an exclusive right (varies dependent on the means of acquisition) and with this you are able to restrict others.

The starting point is that IP is a negative right. So, with a trade mark the owner has an exclusive right to use the sign on their product/services. A course will fall under copyright protection and others are restricted from having access, the moment access is granted, the negative right has become a positive right via commercialisation.

The negative right includes right to exclude, and restrict access. What this means is that having an IP will not automatically result in commercialisation/money, unless it is actually commercialised. By turning the negative right to a positive right, income is realised.

Key point here: the positive right of IP is about commercialisation whereby you allow others to benefit from your IP.

There can be more than one IP in a product/service.

5. There can be more than one IP in a product/service. Take your phone for an example: the phone has a brand name which is trademarked, example Samsung/ Apple. The phone will also have components to make it function which could be a patent/ trade secret. The software used to develop the phone will be copyright protected and lastly the design of the phone could be protected by design rights!

BONUS

IP can be protected.

Trade mark – Formal registration of trade mark guarantees protection. A trade mark can also be protected via passing off, if it is a renowned brand it can claim for anti-dilution.

Patent – Patent registration last 20 yeaars.

Copyright – Copyright arises automatically and no registration required.

Trade Secrets – Trade Secrets does not require formal registration, but adequate steps must be taken to maintain the secrecy of the information.

Protecting your IP allows you to control what happens to your creations after they have been made.

Till next time…

Share your learnings or questions below!