In this vlog/blog we are delving into the fundamentals of Intellectual Property (IP) to provide our audience with a short summary of this (often) misunderstood and somewhat (depending on who you are) dry topic. Believe it or not, there is more to IP than just patents and trademarks! Our very own Alex (Sr. Associate) and Elliot (Jr. Analyst) launch into the A, B, Cs of IP, focusing on the various IP assets and IP rights organisations may generate in their day-to-day operations, and looking at some of the benefits and limitations of these IP assets.
Before we get into the thick of it, it should be noted that this vlog/blog does not constitute legal advice and is merely a compilation of information to help familiarise you with intellectual property assets and rights.
IP Assets vs IP Rights
It is common to hear people use the terms IP Assets and IP Rights interchangeably yet this is not technically correct as the two are actually very different things.
- IP Assets refer to the “thing” that has been created, whether it’s an invention, a story, a process or some computer code. These assets often carry contextual value and have a strategic advantage.
- IP Rights refer to the legal rights that the owner of the IP asset gains (whether through registration or otherwise). These IP Rights are intended to benefit the owners of IP assets by preventing others from using, selling or copying the IP assets without the necessary permissions. Examples of IP rights include copyright and patents.
A trademark (or trade mark in British English) is used to show a claim of ownership and control over a word, sign, symbol, sound (think of the very recognisable Intel® chime) and scent, that differentiates an organisation, product or service on the market. This means that a trademark could essentially be almost anything, provided it distinctly distinguishes a brand and is not generic (Bainbridge and Howell, 2011). Obviously, the most common trademark would be an organisational logo. Two symbols, ™ and ® are associated with trademarks. The former means that the owner claims the mark as their intellectual property, however, has not officially registered it (trademark rights are automatically accrued upon use). The latter means that the mark has been officially registered. Registration provides additional legal protection and security.
Copyright, Databases and Software
Copyright protection is obtained automatically, as soon as an original idea is expressed and recorded. That said, copyright may be registered in the US through the US Copyright Office. Copyright prevents others from copying (plagiarising), distributing or showing your work without your permission. Copyright is most commonly used in fields such as music, theatre, marketing, films, graphic design and web design. In recent years, it has become more prominent as it also protects software and databases (UK Copyright, Design and Patents Act, 1988).
Software such as apps and computer programmes, including the underlying source code and associated object code (and sometimes the GUI (graphical user interface) where this is not a mere consequence of the software’s intended functionality), are generally protected through copyright, or an extension of copyright. Software can also be protected through patents, provided it satisfies all patenting requirements (see the section on patents below). This is however rare and one interesting trend to be observed is the protection of artificial intelligence through patent rights, as such innovation becomes more commonplace.
A database is a collection of independent works, data or other materials arranged in a systematic or methodical manner and are individually accessible by electronic or other means. Databases are protected by copyright if their data is original. Alternatively, if there has been a substantial investment put into creating the database, that database can be protected through database rights. These rights prevent people from using the contents of the database without permission. That said, database rights are not recognised in all countries.
Copyright protection last for 70 years after the death of the author (Copyright, Design and Patents Act, 1988).
There are two kinds of rights associated with copyrights. Firstly, the economic rights ensure that the owner (or controller of the copyright) can make commercial gain from the success of their work. Secondly, the author gains a moral right to his/her work. Moral rights protect the creator’s non-commercial interests such as the right to be recognised as the author of the work.
Trade Secrets and Know-How
Trade secrets and know-how refer to the confidential information or processes that give an organisation operational and/or commercial advantage. While these assets are not registerable, they can be just as valuable as inventions which are protected by way of patents.
It is important to note that trade secrets and know-how are not the same thing. A trade secret can be defined as any sensitive information, which provides a commercial advantage, that would cause real commercial harm (to its owner) if disclosed to a competitor. It is essential that a trade secret be acknowledged as such and that the associated organisation show that it has taken all reasonable steps to protect it (UK Gov, 2019). Some examples of trade secrets include the Google® search algorithm, the method for ranking the New York Times® bestseller list and the Coca Cola® recipe (VLF, 2016). Trade secrets are a common alternative to patents, as they provide some of the same benefits (primarily giving the owner a monopoly) while keeping the invention secret, potentially forever. It should be noted however, that trade secrets do not work quite as well for innovation which can be easily reverse-engineered. Trade secrets, in so far as they are maintained responsibly, are a great alternative to patents and are practically free!
Know-how, on the other hand, refers mostly to the organisation’s ability to create value, specifically with regard to its workforce. Employees carry and build knowledge, skills and experience, which can be one of the most important and valuable intangible assets of a company. Good know-how provides significant competitive advantage, while attracting potential customers and investors. It is not uncommon for know-how to complement an organisation’s patent portfolio. Companies utilise a combination of HR practices, and contract law to minimise the amount of know-how that leaks from the organisation. Some examples of this are contractual stipulations asking employees not to leave to work for a competitor, or preventing workers from leaving soon after they finish a training course. It is often in the interest of organisations to ensure that know-how is recorded securely so that a worker’s departure does not result in the loss of know-how.
Patents are perhaps the most well-known type of IP rights. They are rights granted by the government to protect technical inventions. While the application process can be lengthy and costly, patenting an invention has many benefits. Patents can:
- Improve market power, and provide an organisation with a competitive advantage;
- Serve as collateral;
- Be licensed (or sold) thereby creating a new source of revenue.
Patents are a territorial right, meaning they only apply in the region where they are granted. So, one invention could have multiple patents across different countries or regions. If you ever hear the term “worldwide patent” – take this with a grain of salt, as it’s probably referring to a patent application filed with the World IP Organization and which must be reviewed at national level in territories selected by the applicant. The term often used to describe clusters of patents which cover the same invention in various territories is a “Patent Family”. To be granted a patent, the invention needs to satisfy three main criteria or ‘The Three Ns’.
- It must be novel. It has to be new, and original, and not within the public domain.
- It must be necessary, or have a prospect of commercial application.
- It must be non-trivial, meaning it can’t be obvious.
It is worth noting that some things are not patentable. This includes artistic works (this accrues copyright), ways of doing business, medical treatments, scientific discoveries such as naturally occurring biological phenomenon and processes (Patents Act, 1977).
Additionally, while patents can provide commercial and strategic benefits, the process to get them is lengthy and can be costly. Applications will often take a number of years to be granted and can cost a small fortune. In the UK, patents are valid for 20 years. In the time period between the initial application and when it’s granted, the invention is classed as “patent pending” and third parties are unable to apply for a patent covering the same invention (Patents Act, 1977). If the patent is granted the owner maintains the right to claim the profits of any other companies who sold the invention.
If you are looking for examples of heavily protected products and devices you do not have to look much further than your smartphone. Apple alone has more than 75,000 patents and has filed for over 2,200 more since the beginning of 2017. As of January 2018, Samsung had filed for more than 10,000 patents in the 18 months prior and reportedly holds over 1.2 million in total (Stokel-Walker, 2018). These patents include inventions like Face-ID and 3D Touch. On the other hand, if you visit your local supermarket most of the products will have been invented more than twenty years ago making it unlikely that they are still patent protected. This is often why supermarkets are able to sell generic alternatives.
Some Parting Words
Adopting a strategic plan that incorporates IP, and its strategic management, is crucial for ensuring that an organisation can maintain its competitive advantage in today’s world. It is ultimately through the creation and management of such IP assets that an organisation (whether commercial or academic) can achieve impact.
We hope that this short(ish) vlog/blog sparked your interest in IP and perhaps even opened up your mind to the lesser-known IP assets and rights. Ingentium has worked with both public and private sector clients to develop policies and strategies for managing and commercialising IP (some of which have been regarded as best practice within their sector). If you want to discuss IP management or strategy any further – please feel free to get in touch with us. Also, if you liked this blog or the accompanying vlog – you can subscribe to our quarterly newsletter to stay IN THE KNOW w/ Ingentium.
Bainbridge and Howell, 2011. Intellectual Property Law, 2nd ed. Pearson: Harlow, England.
Copyright, Design and Patents Act, 1988. Available at: http://www.legislation.gov.uk/ukpga/1988/48/contents
Guardian, 2007. Apple proclaims its revolution: a camera, an iPod … oh, and a phone. Available at: https://www.theguardian.com/technology/2007/jan/10/news.business
Patents Act, 1977. Available at: https://www.gov.uk/guidance/the-patent-act-1977
Stockel-Walker, 2019. Forget Apple vs Samsung, an even bigger patent war has just begun. WiredUK. Available at: https://www.wired.co.uk/article/apple-samsung-iphone-patents
UK Gov, 2019. IP Basics. Available at: https://www.gov.uk/government/publications/ip-basics/ip-basics
Vethan Law Firm (‘VLF’), 2016. Trade Secrets: 10 of the Most Famous Examples. Available at: https://info.vethanlaw.com/blog/trade-secrets-10-of-the-most-famous-examples
WIPO, 2019. About IP. Available at: https://www.wipo.int/about-ip/en/