Like any specialist, I live in a world peppered with jargon. Some of it has wended itself into everyday language and I can pretty much guarantee that when I mention the word “patent” the first thing that springs to mind for most people is a mousetrap (no pun intended) or a lightbulb. Or sometimes a picture of a creepy dude in a lab coat.
I’ve been in the field of Intellectual Property ("IP") for the past 18 years and I’m always struck by the fact that so many people are aware of, or have heard of, the basic building blocks of IP. Unhelpfully, many businesses and their leadership teams still get them mixed up with rather tragic consequences for their fledgling startups or corporations.
Most traditional businesses have physical assets - the stuff that we all know and that can be seen - in the form of buildings, stock, plants, machinery and IT infrastructure. But there are also intangible assets, things that cannot be seen, such as goodwill, customer lists, business processes, business strategies, and the like that have been captured and implemented to make the business more profitable. However, intangible assets by themselves aren’t worth much if they’re not captured and protected in the right way.
Enter “Intellectual Property”, a rather vague umbrella term that refers to proprietary creations of the mind that can be protected as a legal right. Yawn. Yes, yawnworthy indeed, until you realise that in most corporations, IP is the most valuable part of the business and materially alters the way companies do business in the 21st century. Such IP rights refer to the various types of protected monopoly rights that creations of the mind can take. These are: patents for original inventions, trademarks for original brands and logos, design rights for original industrial designs, and copyright for original literary or artistic work (this can include product manuals, website layouts, tech drawings, and other creations not necessarily seen as “artistic”, but hey, I didn’t make the rules). Trade secrets don't strictly fall into the statutory description of IP, but I've included it in here because it's a form of protection used to protect original proprietary information, client lists, databases, and ways of doing business that you want to keep to yourself. Your intangible assets, when protected correctly by way of Intellectual Property Rights, are the propellant that you need to start up your startup in the strongest, most confidence-inspiring way possible, kill competitors, and increase the value of your company nearly instantaneously. However, the wrong steps in the wrong order or the right steps in the wrong order will lead to catastrophic, irreparable failure, so, best you get it right then. Let's take a brief look at each of these Barbarellas of the business world.
The first thing most people think of when the concept of obtaining protection for an idea comes up is patent protection. Patents are no longer just for mousetraps and cover pharmaceuticals, electronic gadgets, communication systems, chemical processes, software, or (gulp) business methods. Patents are sole rights, or monopolies, granted to an inventor by the government of a country. In most countries, patents last for a period of 20 years. Does that sounds unfair? Some people think it is, but I can guarantee you that if you come up with a ground breaking new invention you’ll be the first one knocking on the government’s door to get the 20-year lifetime extended so that you can make back the money you had to spend on research & development, marketing it, and getting the product out there. Patents may be used to protect technical inventions that are (i) new and (ii) inventive. WTH does that even mean? Generally, these requirements means that it must be your own original work. And by original, I don’t mean that you just came up with it independently while sitting in your mother’s basement. I mean that no-one else must have come up with the same idea anywhere else on earth. Whatever the case, a patentable idea must also have some sort of application or use in trade, industry, or agriculture and must conform generally to the rules of physics - this means your time machine ain’t patentable (and if you’re contemplating writing me an email about how I’m wrong then you’re exactly the type of subscriber that must not keep reading these columns of mine).
To get protection, you need to file a patent specification at IP Australia and in whichever countries you're interested in protecting your idea. A patent specification is a document, usually written by a patent attorney geek like me, that describes the details of an invention using words and drawings. It’s a pretty contrived piece of literature and each one, in theory at least, is supposed to be completely unique because - remember - you can only get a patent on an invention that is unique. A patent specification must provide an inventor or group of inventors working together with the widest possible coverage for the invention, captured in a series of numbered paragraphs at the end of the patent specification, called ‘claims’, while simultaneously steering clear of previous inventions in the field of the invention. This is a delicate art, which is why patent attorneys charge what they do - they've trained for many years under pretty harsh circumstances to learn how to get this right and a recent article showed that only about 0.14% of inventors that write and file their inventions themselves end up with registered patents.
Moving right along to the rather more glamarous side of IP, a trade mark is a protected brand, mark, sign, logo, emblem or name that is used to distinguish your products or services from other similar products or services. Good examples of brands or names are ‘Kodak’, ‘Adidas’, ‘Coca Cola’. Examples of logos protected by way of trade mark registrations are the Nike ‘swish’, the ‘shell’ motif owned by the Royal Dutch Shell company, and the lowercase ‘f’ symbol of Facebook. A trade mark is visual sign of distinction, but can also be in the form of a unique sound (think of the Apple sound when starting up), scent (this is not a joke; an Asian tire manufacturer has a trade mark on a make strawberry-scented tires), or colours (think of the Tiffany blue, or the red soles of Christian Louboutin shoes, recently successfully defended in court against Yves Saint Laurent).
Here's an important point that trips up MANY startups an even seasoned businesses: trade marks are not the same as company names. A company may trade under a certain name – which may also be registered as a trade mark - but that company could eventually sell numerous products, each with their own name, logo or get-up which could be registered as trade marks in and of themselves. While many business owners think that they have secured the rights to their name when they register a business, this is in fact not the case. The trade mark and business name registers are completely separate. A trade mark is the only legal monopoly you can get for a word, logo, or brand. Trade marks are renewable every ten years, and are renewable in perpetuity, which can give you a massive advantage in the market. In one of my future articles dedicated to trade marks and brand integrity management, I'll tell you the story of how VW cocked up a deal with Rolls Royce which nearly ended up costing them the company.
Registering a trademark is the most important and cheapest step to stopping counterfeiters from passing off their inferior products or services, or of trying to imply a connection between their business and a legitimate one.
Registered Design Rights
While patents protect new technical innovations or the way a product works, a registered design protects the way a product looks. These oft-neglected rights are used to protect new industrial designs - maybe a new pattern, bottle, or music stand that has an aesthetically pleasing shape. Design rights typically last for a shorter period of time than patents: in some countries such as Australia it’s 10 years (two terms of 5 years each) while in others it's slightly londer. For an illustration of the importance of registered designs, take a look at the ‘look’ of Apple’s products. It’s one of the few companies that grasps the tremendous value that good industrial design can bring to the table, provided that it’s protected. In fact, one of the infamous mobile phone wars took place based upon Apple’s design rights that they obtained for the look of the iPad, iPhone and the design of the screen icons. It’s about the shape – and that’s what a design registration protects.
Apple did it right, but companies also do it wrong. When Procter & Gamble brought their new Head & Shoulders anti-dandruff shampoo to market, they designed a bottle with a characteristically long neck, which was combined with auspicious colouring. P&G, as they do, spent a huge amount of money on advertising, and the product was met with great success. A few months down the line, a lower-priced anti-dandruff shampoo made its way on to the market, manufactured by a competitor. How was it packaged? You guessed it - in a bottle with the same colour combination as Head & Shoulders and sporting the same long-necked bottle design. P&G took action and managed to make the competitor change its colouring, but they had neglected to file a design registration for the shape of the bottle and were thus unable to stop the rival bottle from occupying shelf-space next to theirs. They lost the exclusivity which they could have built up in a unique product design. A very costly oversight and one that ensured that P&G now file design applications for every single product shape or design that they come up with.
Copyright refers to the rights of an author or creator to stop the unauthorised reproduction of any part of his or her original artistic, literary, dramatic or musical works. Copyright is the mainstay of the publishing, film, choreography, graphic design, art, and music industries. Interestingly, software code is also protectable in terms of copyright (the code being deemed to be a “literary work”), although increasing numbers of patent applications are also being filed in the USA, Europe, and elsewhere for software-based systems to protect the overarching methods in which these software systems are applied.
In most countries it is not necessary or even possible to register copyright in any work – it vests in the author by virtue of his or her original work having been reduced to a ‘material form’. In other words, copyright vests automatically in the author (i.e. creator) of the work, once he or she has taken it out of their mind and committed it to some sort of material form, such as by writing it down or sketching it out. Who the author is differs for each type of copyrighted field, so that the person responsible for composing a shot may be deemed to be the author (and thus owner) of a photograph to the exclusion of the person who triggered the camera or the person being photographed. Unlike patents, trade marks and design registrations, there is no central register in which one can apply to register copyright in a book (except in the USA, where there is a Copyright Office, which is helpful in providing you with a date-stamped certificate showing when your work was lodged with them) or a piece of music. The mere act of creating it is enough, provided that creation is a product of original thinking and creativity that went into the creation thereof. This doesn’t mean that it isn’t enforceable against copycats or infringers – it just means that a record of the creation of a is helpful in a court of law if it turns out that someone is infringing upon copyrighted work.
Now that I've given my little treatise above, I would hasten to add that in the hurly-burly of the business world and the creative industries, things are never clear-cut. A patentable invention might also qualify for design protection for the way it looks, the accompanying product manual and the writing and drawings therein are subject to copyright, while the name under which the product is to be sold could be trade marked, while, of course, the artwork in the logo itself can also be subject to copyright. If this sounds confusing, it is, but I hope to bring a bit more clarity over the next few months to the world of IP with this column. My aim is to make Australia the most IP-savvy nation on earth and this is my attempt to help make that happen. As always, this isn't legal advice, so rather go and see an expert when it comes to these types of things.