Intellectual Property strategy for tech businesses
Whatever stage your business has reached, be it an early-stage start-up or an established player in your industry, it is important not to underestimate the importance of protecting your valuable IP.
A solid IP strategy can be key to the development of your business and to attracting investment, customers, suppliers and other commercial partners. It can also be crucial to keeping at bay competitors who may have designs on profiting from gaps in your IP protection.
Evaluate your IP portfolio
Identifying your assets
Consider IP early and review regularly to ensure that you safeguard your core assets, such as your innovations, devices, code and branding. Available protections include:
Patents
Patents protect new and innovative products, processes and methods of doing something, such as technical elements of new hardware devices or algorithm-based innovations. A patent confers a monopoly right which prevents competitors from reproducing items which fall within the scope of the patent claims. Patents must be registered and endure for 20 years (subject to payment of renewal fees).
Copyright
Copyright protects original, creative works. In a tech context, this includes software code and databases. Copyright subsists automatically in original, recorded works. No registration is required, but it is important to keep records to help evidence the work’s creation and ownership. Copyright durations can vary, but the basic position for “literary” works (which would include code) is author’s life plus 70 years.
Designs
Different types of design rights exist. The appearance of features of functional products can benefit from protection, provided they are not commonplace, such as the shape of a device (not registrable and protection endures for up to 15 years). There are also registrable rights for aesthetic designs.
Confidential information
Trade secrets can provide your business with a competitive edge. They may encompass source code, processes, programs and financial and proprietary information concerning dealings with clients and suppliers. Confidential information may be protected through internal and IT security measures and contractual obligations imposed on staff and those with whom you deal.
Trade marks
The distinctive words, logos and trade getup which form your brand provide the foundation on which you develop vital brand recognition. Registering a trade mark is advisable (rights can arise in marks which are not registered, but may be more difficult to enforce). Registration can permit the trade mark owner to prevent others from using an identical or similar mark in relation to identical, similar and sometimes (in the case of very well-known marks) dissimilar goods and services. Trade marks must be renewed every 10 years.
Check ownership
Make sure you own the IP which forms the bedrock of your business.
On incorporation, founders may need to assign to the business rights in IP they have developed beforehand.
In the UK, rights in inventions, designs and copyrights created by employees during the course of their employment will generally be owned by the employer, unless there is agreement to the contrary. Be aware that the same may not be true in other countries. Ensure your contracts with employees who may have a role in developing IP spell out ownership rights clearly.
Care needs to be taken with works commissioned from third parties. For example, the default position for copyright works and designs is that they are owned by the author/designer, not the commissioning party, unless agreed otherwise. Ensure your contracts provide for an effective assignment of IP rights which your company expects to own.
IP registrations and management strategy
Careful planning and regular review of your registrations and management strategy is particularly important in the fast-paced tech industry.
Most businesses will need support to implement registrations. Many businesses may benefit from a “health check” to help assess potential gaps in their IP portfolio and to help develop an effective strategy.
Exploiting your IP portfolio
Seeking investment, entering into joint ventures and other commercial collaborations may require disclosure of sensitive aspects of your IP. Make a point of procuring agreement to a suitable non-disclosure agreement before disclosures are made.
Your downstream supply arrangements may need to permit commercial partners (such as distributors) to make use of aspects of your IP.
Similarly, your contracts with customers may rely on licences which set out the parameters of how they may use the product or service supplied.
Your contracts should state clearly the extent of and limitations on use of your IP and what happens in relation to the use of IP when those contracts end.
Protecting your IP Portfolio against infringement
This starts with implementing an effective registrations and management strategy, as above.
The next phase is monitoring competitors’ offerings. Monitoring starts with educating staff on the importance of your IP and encouraging a positive culture amongst staff to act as the eyes and ears of the business and report activity they perceive to be detrimental. Some businesses may engage specialist agents to search out potentially infringing activity.
Where potentially infringing activity is identified, action may range from a robust cease and desist letter to contested court proceedings to achieving a negotiated outcome (sometimes through alternative dispute resolution processes). Commitment to court proceedings will require careful risk assessment balanced against strategic objectives, with professional input.
Litigation is generally a last resort and can entail significant cost and risk. It may also be essential to limit the risk of serious damage to your valuable assets. Where potential infringement is identified, in all but the simplest cases, early involvement of a specialist IP dispute resolution lawyer can help limit damage and ensure efficient use of resources.
Key take home points
In the drive to push forward your business, it is important that an effective IP strategy is not left behind. It is always necessary to balance to the deployment of resources, but deferring implementation of strategically oriented protections may hurt the business down the line. An effective IP strategy will assist your business to deliver its products and services to market, achieve investment and growth and defend itself against the actions of competitors. Success may pivot on it.
For more information, do contact: russell.beard@bakerskelly.com
The above is intended as general commentary only and is not intended as a substitute for specific legal advice. It also relates to the law of England and Wales only and no other jurisdictions.
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