Businesses operating in the digital, creative and technology sectors could be exposing themselves to the risk of their rights being infringed, products copied and even costly rebrands if they fail to protect and register their intellectual property (IP) rights.
Only 9% of small to medium-sized businesses (SMEs) have registered IP rights, compared to 40% of large companies, according to GovGrant — which could significantly impact growth and competitiveness if they end up in a dispute.
As a Gather partner, Brabners plays a key role in supporting businesses to navigate these challenges. Here, Sara Ludlam — a Partner in the commercial and intellectual property team at Brabners — outlines what businesses in the tech sector can do to protect their IP.
Why should businesses register their IP?
Small businesses might put off registering their intellectual property due to a lack of awareness around the potential benefits. However, this leaves them open to expensive consequences if they end up in a dispute and need to pay for litigation proceedings.
Though you don’t need to register all your IP — as some ‘free’ protection exists automatically — defending unregistered trade marks will be more challenging (and expensive) than defending registered ones. If you end up in a dispute managed at the UK Intellectual Property Office, you can expect to pay at least £10k with solicitors — and in the courts, costs are even higher (over £85k).
However, the cost of filing a trade mark in the UK can be as low as £170.
Therefore, it makes sense for businesses to assess the strengths and weakness of their IP portfolios to understand where protections are needed and identify potential new income streams that would only be possible by having this protection.
What should you protect?
1. Brand identity and market recognition
Your business’s name, brand, logos and slogans are a part of what makes you stand out, so they should all be protected through trade marks.
You don’t necessarily have to pay for trade marks — if you meet certain criteria, you could benefit from free trade mark rights in the UK (known as passing-off rights). If you’re able to prove that you’ve established goodwill and a reputation by using a mark, this could allow you to prevent a competitor from using the same mark for similar goods or services in the UK if such use would damage your business.
However, your names, logos and slogans can increase your business’ value and interest from investors — so it’s sensible to secure a registered trade mark to boost this further and make it easier to stop your competitors from taking advantage of your brands. Registrations will also reduce legal costs in the event of an infringement and help to avoid the risk of being accused of infringement too.
Remember to use the ™ symbol when using an unregistered trade mark and ® when using a registered trade mark. However, you should not use the symbol ® if you do not have a registered trade mark as that is a criminal offence.
Filing for a trade mark online starts at around £170, but preventing a third party from using your unregistered trade mark will cost you significantly more. Registering is a straightforward process if a third party isn’t already using your mark.
Before applying to use a new mark, you’ll need to perform three checks:
Is it already registered at the UK IPO under the relevant goods/services classification?
Is it already in use as a company name on Companies House?
Is it in use on a competitor’s website?
2. Creative works and content
Creative works and content such as software, website content and images can be protected through copyright. You’ll be automatically protected when an original work is created, and registration isn’t required in the UK.
However, if your business has global reach, you should check if the other markets you operate in have a copyright register. You’ll need to register in the US and China, for example.
Though copyright prevents others from copying, reproducing or distributing your work without asking for permission, for this right to be fully enforceable you should ensure that the content is marked with the copyright symbol ©, the date it was created and the name of the copyright owner. If you fail to use the copyright symbol, your competitors may be able to use the material without being liable to pay damages for infringement.
If you’ve paid an external supplier to develop your software, take photos or draft copy for your website, this doesn’t mean that you own the copyright for this content. In this instance, ownership of copyright would have to be transferred to you — and intellectual property rights can only be transferred if there’s a written agreement signed by the party transferring the work to you usually for valuable consideration.
You should obtain written transfers (assignments) of any copyright works to you or your business before you start making money from the materials, as the cost of the transfer is likely to increase with your success in selling those materials.
3. Developments with a technical effect
Creative and digital businesses may also want to consider protecting novel products or processes (including in some cases, software) with a patent, to avoid losing out to competitors who could otherwise copy your creations for free. When you invent something new, you must keep it confidential or you lose the right to get patent protection. Make sure to use confidentiality agreements (also known as NDAs) where disclosure is required.
Once you have filed a patent application and it has been published, you can disclose your invention and once it is registered you will have a monopoly right to use that invention for up to 20 years.
4. Trade secrets and proprietary information
A survey by the UK Intellectual Property Office found that just 15% of small businesses think that secrecy is important in protecting revenue generated through IP.
However, NDAs (non-disclosure agreements) should be used more often than you might think — particularly if you’re providing consultancy services. We recommend that confidentiality agreements are signed before you enter into business or conversations where important commercial information is being discussed. Your ideas, contacts and expertise are your selling points, so you need to ensure that you’re taking reasonable steps to protect and prevent them from being copied and used without payment or landing in competitors’ hands.
When it comes to drafting an effective NDA, the right definitions need to be included, so legal assistance is advised. However, there are templates available both online and at the Post Office. You should also be cautious with safeguarding your own confidential information, including not sending confidential information by email, only sharing such information with those who need to see it and ensuring those people are bound by confidentiality obligations.
Keep records when using unregistered rights
If you’re using an unregistered IP right, you must collect, keep and update the following records:
Date of creation.
Details of who created the work.
The creator’s contract of employment, subcontract or an assignment that confirms the transfer of the IP right to you or your business.
Details (including dates, if possible) of how the work was created (early design drawings, prototypes, etc.).
Copies of dated invoices, orders and dated webpages that show the mark being used.
Be strategic with your IP
Always take legal advice before trying to secure registered rights. Timing is key and usually identifying and relying on a number of forms of IP, not just one, will provide stronger protection for longer.
We can advise on what IP you have that may be worth protecting — and the optimal route to gaining that protection and adding value to your business. Find out more about Brabners' specialist IP team.