Essential IP Advice For Small Businesses
Back in 2014, a commentator for Forbes highlighted that more than 80% of a business’ value is derived from intangibles. That means that the vast majority of a company’s value is derived from its intellectual property (IP). IP is any form of creation/innovation, artistic or technical, that an individual and/or business produces. It covers everything from website content to pharmaceuticals, databases to new technology and everything in between, even an individual’s name.
As technology has advanced, IP has only become more integral to a business’ success. According to the Federation for Small Business, approximately 30% of small businesses with intellectual property are reliant on it for 75% of their turnover. The effective protection of those rights is key to the survival of those companies.
There are four principal areas of IP protection: Trademark, Patent, Registered Design and Copyright. Most, if not all, businesses will have more than one form of intellectual property (IP). To help you protect your products and services, here is some essential IP advice for small businesses, along with a brief overview of the relevant IP protections.
Don’t Underestimate The Value Of Your IP
With the ever-increasing importance placed on brand development and identity, establishing a recognisable brand is essential. A huge part of this is developing a name, logo and perhaps a slogan that calls to mind your company. A perfect example would be McDonald’s ‘I’m lovin’ it’ slogan, which has become as recognisable as those giant golden arches.
Consider how much value can and is routinely placed on a successful brand: Apple, Google and Coca-Cola led Interbrand’s 2016 rankings at $178 billion, $133 billion and $73 billion respectively, and those numbers reflect the value of the brand alone, not the company as a whole.
Search For Existing Trademarks Before Getting Too Attached To A Name, Logo Or Slogan
Trademarks can be signs, logos, words, sounds or any combination of those things. As mentioned above, Coca-Cola, Google and Apple are all trademarks. However, they must not contain words that describe your product or are misleading. Similarly, a logo can’t be a 3D shape associated with your trademark (eg: a cube for a box company). They must also be unique.
When you are considering a name, logo or slogan for your company it’s a good idea to run a search for existing trademarks to establish whether it is in use or too similar to an existing company’s trademark. That way you avoid being faced with a situation where you are challenging someone else’s trademark (or vice versa) or having to completely rebrand.
A registered trademark must be renewed every 10 years, which can be done in the 6 months prior to its expiry and up to 6 months after it expires. Trademarks can be registered with the Intellectual Property Office (UK IPO).
There is a degree of common law protection for trademarks that are not registered. For example, you can contend that another company using your logo is attempting to ‘pass off’ their goods as yours, trading on your product or company’s reputation.
Be Very Careful To Keep Any Invention That You Want To Patent Out Of The Public Domain
Patent law protects inventions. A patent effectively gives the inventor a monopoly over their invention for up to 20 years (renewals every year after the first 5 year period) provided that it is in use. They are the most concrete form of protection but are also the most difficult and expensive to get. In order for an invention to qualify for patent protection, it must be new, involve an innovative step (cannot be simply a change or make a minor modification, it must be a material change), and be something that can be made or used.
It must not be available to the public prior to patenting. This can’t be stressed enough — you will not be able to get a patent if your invention is considered to already be in the public domain. For this reason, we would suggest that you require anyone you seek advice from to sign a Non-Disclosure Agreement (NDA).
There Is More Than One Way To Protect Your Product
When you seek business legal advice, if you find that your product that doesn’t achieve patent protection, it may still be eligible for design protection. Design rights apply only to the appearance, physical shape, configuration or decoration of a product. The UK does have a design right which doesn’t require registration. This protection lasts for 10 years from the date of the first sale. The 10-year term is split up into two 5 year periods: for the first period, the designer has exclusive rights. Thereafter, other parties are allowed to request licenses to the product which must be granted.
Registering the design grants you a longer period of protection (up to 25 years, renewing every 5) and gives you exclusive rights to the design for the duration of protection. That being said, the recent Supreme Court loss for Magmatic, the manufacturers of Trunki children’s suitcases, demonstrates the limits of the protections granted to even a registered design.
Copyright law automatically applies to literary, dramatic, and artistic works (including photography and illustrations); non-literary works such as software, web content and databases; sound and music recordings; and film, Television and broadcasts. The works must be original.
Copyright makes it illegal for anyone to copy, distribute, adapt, display the work without your consent. There are a limited number of exceptions but they don’t apply to commercial exploitation. Effectively, copyright protects every piece of content on your website, marketing materials and any database that you develop. Placing a copyright notice on your website can help identify it as proprietary content and deter any kind of casual infringement.
Many small businesses choose to forego proper IP protections because legal advice is expensive. You can’t find room in the budget for intellectual property consultation, especially given the costs of starting a business, and don’t really see the need. But, consider the cost of the initial investment in establishing proper IP protections for your business compared with the cost of attempting to fend off a legal challenge by a competitor. IP Protections won’t necessarily prevent your business from facing legal challenges but they certainly make it easier to establish ownership in the event of an infringement.
Final Words: Essential IP Advice For Small Businesses
So there you have it! The essential IP advice for small businesses you must know. Follow this advice as we’ve outlined and you’ll be on the way to ensuring your intellectual property is protected.
If you need some expert legal IP advice for small businesses specific to your business and situation then get in touch for a free Startup Legal Session. You will get free advice on what you must do immediately to protect your business’ intellectual property and it’s 100% free advice.
Book your Startup Legal Session below.