As a general counsel of a growing business, you will be used to managing a wide range of legal matters. Intellectual property is one area where an effective strategy can have a significant impact on the success of the business. Understanding the options available and processes to manage them will help you develop a strategy that strengthens your intellectual property protection, address gaps in existing rights, and maximises the value of your company’s intellectual property portfolio.
To help you build a strategy aligned with your company’s goals, this guide highlights some of the key issues and priorities you should consider to successfully manage your company’s intellectual property portfolio.
If you are reading this guide because you are looking to simplify the management of your intellectual property portfolio or you need hands on support with overflow work, our team of experienced intellectual property lawyers can help. We will act as your trusted advisor, offering expert guidance on the most effective registration strategies, assessing potential risks and opportunities, and ensuring you adapt and comply with local and international intellectual property laws. We will also make sure you are always ahead of the curve by keeping you up to date with the latest changes in intellectual property law or technological developments that could impact your business.
Contents:
- What intellectual property do you have within your business?
- Have you identified any gaps in your intellectual property protection?
- Do you have a system in place for tracking the lifecycle of your intellectual property?
- How do I determine if we own all the intellectual property being used in our business?
- What is the status of any intellectual property related agreements?
- Summary
What intellectual property do you have within your business?
Before you can consider how to deal with your business’s intellectual property, you must identify what intellectual property it owns. Often, a business’s intellectual property portfolio is far larger in scope than its owners realise. Conducting an intellectual property audit will give you a comprehensive overview of all the intellectual property the business owns and uses, including its trade marks, patents, designs, copyright, and trade secrets.
You should begin by considering the nature of your commercial operations and the types of intellectual property the business creates. You should then locate and review all relevant information and documentation, which might include trade mark registrations, licensing agreements, supplier agreements, and employment contracts. The next step in this process will be to check that all intellectual property created within the business is properly documented. This documentation should show how the intellectual property was developed and establish that it belongs to the business.
The intellectual property audit will allow you to assess the extent, value, and strength of the business’s intellectual property and highlight any vulnerabilities. Effective intellectual property audits are the bedrock of a successful intellectual property strategy.
If you have a limited amount of intellectual property in the business, you may have the resources to review and audit the intellectual property in-house. Alternatively, if the business operates in a sector where intellectual property plays a fundamental role, such as manufacturing, technology, or fashion, you may need to get external support to help you make sure that all applicable intellectual property is identified and properly protected.
Remember, too, that many businesses create intellectual property without realising it. For example, the business’s processes and methods might be capable of protection as trade secrets, provided the business takes certain steps to secure that protection. Even if intellectual property does not appear intrinsic to the business’s commercial operations, it can still be incredibly valuable.
Strategic priorities
- Conduct intellectual property audits on a regular basis (e.g., annually or bi-annually), ensuring they align with the business's fiscal calendar or product cycles. You should work with an intellectual property lawyer to develop a checklist that covers all types of intellectual property that are generated within your business to make sure that nothing is overlooked.
- Document and record all intellectual property that is generated in the business. You can either use a spreadsheet or work with an intellectual property lawyer to keep a comprehensive record of intellectual property rights generated within the business. You should regularly update the document by including updates to applications or changes in licensing arrangements. You should also make sure that the records are easy to access for compliance or enforcement purposes.
Have you identified any gaps in your intellectual property protection?
More often than not, an audit highlights gaps in the business’s intellectual property protection, which you must address. For example, your intellectual property audit may reveal that the business’s logo is not a registered trade mark. The logo is often central to the business’s branding, so you may need to take urgent steps to establish the reasons why it has no registration. If it's just an oversight, you should go ahead and apply for the trade mark. If other factors are at play, such as an existing rights owner opposing a previous application, you may need to consider other options. For example, there may be scope to approach the rights owner who opposed your application and seek to negotiate a co-existence agreement.
Before investing time and money in remedying gaps in the business’s intellectual property protection, it’s important that you identify the value of that intellectual property to the business. You may not always be privy to the strategic directions that other departments intend to take. If that direction will make intellectual property obsolete, there would be little point in using the business’s resources to secure its ownership.
Some forms of intellectual property protection come at a cost. The relatively minor initial outlay is a small price to pay for the benefits the business will gain from its protection, any investment in protection must be factored into the business’s budget.
Where funds are limited, you should run a cost-benefit analysis and develop a strategy that prioritises the business’s most valuable intellectual property while implementing low-cost measures to protect other types of intellectual property if possible.
Examples of the steps you should take when prioritising what intellectual property to protect and how include:
- Obtain the input of key stakeholders to draw up a list of business-critical assets.
- Consider the intellectual property rights applicable to those business-critical assets. For example, your business name and branding should be protected as trade marks.
- Consider the business’s expansion plans. If the leadership team plans to expand into different products or countries, the business’s intellectual property portfolio must reflect those plans. This may require securing trade marks in classes of goods and services it doesn’t currently need but will require in the future, and obtaining international trade marks to ensure any global expansion plans aren’t scuppered by a competitor registering similar branding before the business launches.
- Consider the intellectual property rights applicable to the business’s other assets. If protecting business-critical assets is costly, relying on intellectual property rights that don’t require an initial outlay to protect those other rights may be enough. For example, you may be able to rely on unregistered design rights or copyright, which are free, rather than paying to register a design.
- If you intend to rely on unregistered intellectual property rights to protect some assets, you must implement processes to ensure those employees involved in its creation understand how to document their work and do so effectively.
Strategic priorities
- Use a spreadsheet or a more formal tracking system to note all unprotected intellectual property that needs attention. This list will serve as a roadmap for future action.
- Meet with teams from marketing, R&D, and finance to identify which intellectual property they consider crucial to the company’s operations. This will help you prioritise the order in which to protect your intellectual property.
- Obtain the relevant registrations, such as registering a trade mark, for business-critical assets.
- Ensure the business takes all necessary steps to ensure non-registered intellectual property benefits from protection.
Do you have a system in place for tracking the lifecycle of your intellectual property?
Most intellectual property rights don’t last forever. Some, like copyright, expire after a specific period, while others, like trade marks, need to be renewed. Your business’s intellectual property portfolio must be actively managed to remain intact. This involves implementing an effective system to track the lifecycle of all applicable intellectual property rights and take the appropriate action when necessary.
Examples of the issues you need to consider when implementing a system for tracking the lifecycle of your intellectual property include:
- What is the current status of the business’s intellectual property rights? Are they registered or unregistered?
- If the rights are registered, the business will lose protection if you fail to renew them on time. You will need a system that alerts you when the renewals are due so you can take the appropriate steps.
- When a registration comes up for renewal, consider whether to pay to maintain it or allow it to expire. Generally speaking, you should never allow a trade mark to expire unless the business has decided to discontinue the brand associated with it permanently. If there is any suggestion that the business intends to use the trade mark going forward, you should usually renew it. If you don’t, a third party may register the same or similar branding and any future use by the business may result in infringement.
You should consider if managing the business’s intellectual property is something you can do in-house or if it would make more sense to outsource it. The larger the intellectual property portfolio the businesses has the more cumbersome and time consuming it will be to manage renewals on an ongoing basis. Specialist intellectual property lawyers will have advanced brand monitoring software along with the resources required to efficiently manage the portfolio on your behalf. They will alert you to any upcoming renewal dates or other issues, advise you on the steps required to maintain the registrations and take any action required.
Strategic priorities
- Confirm the expiry dates of the business’s existing intellectual property rights.
- Set up a centralised system that tracks all key renewal deadlines. You can either outsource this task to an intellectual property law firm or you can use a shared calendar with automated reminders set at pre-determined intervals (e.g., six, three, and one month before expiry).
How do I determine if we own all the intellectual property being used in our business?
Businesses sometimes mistakenly assume they own intellectual property when they don’t, the consequences of which can be disastrous.
Intellectual property ownership varies depending on the intellectual property right in question and how it arose. For example, intellectual property created by employees will be owned by the employer, whereas ownership of work produced by a freelancer will remain with the freelancer unless it is expressly assigned to the business.
To determine if the business owns all the intellectual property it uses, you should:
- Review all relevant contracts, including Employment Contracts, Director Service Agreements, and Consultancy Agreements, to ensure they effectively assign all intellectual property rights to the business. If they don’t, any use by the business will infringe the owner’s rights.
- Check that all registrations are in the name of the correct entity. If the business has several trading names, any registrations should be in the name of the entity that uses the intellectual property the most.
- Confirm that the business’s Employment Contracts contain continuing obligations concerning sensitive information such as intellectual property. When an employee leaves, the business should ensure the return of any sensitive material held by the employee and remind the employee of their ongoing obligations.
If there are any doubts over who owns specific intellectual property, you should take steps to ensure it is assigned to the business as soon as possible. For example, if a supplier created work for you which was not expressly assigned in the original contract, you should secure a standalone assignment of all relevant rights.
Strategic priorities
- Review employment contracts. While the business will own any intellectual property an employee creates during the course of their employment, it’s a good idea to include an express assignment in the contract to avoid any uncertainty or disputes. You should also make sure the employee’s obligations continue when their employment ends.
- Review agreements with third parties, such as suppliers and freelancers.
- Create new agreements expressly assigning all intellectual property to the business if ownership is uncertain.
What is the status of any intellectual property related agreements?
Some businesses’ commercial operations, such as those in the licensing industry, hinge on intellectual property related agreements. For others, intellectual property may be a small but important aspect of their commercial relationships.
To ensure all intellectual property related agreements reflect the commercial reality of the deal and align with the business’s needs, you will need to:
- Confirm that the terms of all relevant contracts mirror the parties’ agreement and allow the business to deal with the intellectual property as it needs to.
- Check whether any intellectual property licences are exclusive or non-exclusive and advising the business on the implications of the arrangement. For example, if the business grants an exclusive licence of its intellectual property, it cannot use the asset for the duration of the agreement.
- Ensure the business complies with its obligations under the contract. For instance, if it has taken a licence of a third party’s intellectual property, the business must ensure it acts within the scope of the rights granted in terms of use, geographical area, and product type. Any use outside of the scope of the agreement exposes the business not only to claims for breach of contract but may also constitute intellectual property infringement.
- Check for any reporting requirements. For example, if the licence fees are linked to the business’s sales figures, the agreement will typically require the licensee to report on its sales to the licensor. The agreement may grant the licensor the right to inspect and audit those records.
- Confirm that the termination clauses are fit for purpose. Where the business is the licensee, unexpectedly losing the right to exploit the intellectual property may remove its ability to sell a key product or service, so ensuring the fairness of any termination provisions is important. For example, you should look for any rights the business has to use its existing inventory post-termination. Where the business is a licensor, you will need to make sure that the business has the right to terminate in specific situations, such as a material breach by the licensee, and confirming that your intellectual property is adequately protected following termination.
Strategic priorities
- Audit the business’s existing intellectual property related agreements to ensure they are fit for purpose.
- Ensure all staff are aware of their obligations under any intellectual property related agreements.
- Determine whether any staff are in breach of any existing agreements. For example, have they failed to adhere to any record-keeping or reporting requirements?
- Identify if staff are inadvertently infringing intellectual property rights. For example, have they used the intellectual property in connection with product lines not covered by the licence?
Summary
Proper intellectual property protection will allow the organisation to commercially exploit its assets and prevent others from using the intellectual property without permission. Where the business uses intellectual property owned by third parties, you must ensure it does so in accordance with the relevant licence. Failing to do so exposes the business to breach of contract and infringement claims.
You can bring tremendous value to the leadership team by understanding the value of the business’s intellectual property and devising creative and effective strategies that open up new revenue streams, boost profitability, and help the business achieve its commercial goals. Your insight can assist the business in obtaining the broadest possible protection for its intellectual property in the most cost-efficient way.
Whether you simply need a trusted sounding board to run through your ideas with or in-depth help with critical intellectual property issues our intellectual property lawyers are on hand to help.
