Understanding IP

The phrase ‘intellectual property’ is actually a shorthand, catch-all term.  Intellectual property refers to many types of intangible, creative assets or output that have value because they are protected legally, as described below. IP can take many forms, from books, artwork, logos, packaging designs, and secret recipes, to complex technology inventions such as computer chips and network software.  Broadly, IP law is designed to encourage and protect creativity and maximise the value that can be obtained from intellectual assets.

Why is IP relevant in Business?

Intellectual property (IP) falls within the category of intangible assets—those that cannot be physically held or seen but still carry significant value. Examples of such assets include artwork, symbols, logos, brands, and designs. Companies place a high priority on protecting intellectual property because it is crucial in a knowledge-based economy. Creating developing and protecting intellectual property requires considerable investment, focus and expertise.  As a result, IP assets should be safeguarded just as valuable real estate or personal property would be.

 Formalising IP Rights in the UK Legal System

For most of the key IP assets discussed here, the UK Intellectual Property Office is the first point of call for UK businesses. The role of the IPO is to oversee and manage the UK’s intellectual property system.  By granting patents that protect inventions, registering trade marks to defend brand names, logos, and slogans to registering designs that protect the appearance of products.

Finally, while copyrights are automatically granted, the UK IPO offers guidance and services to help solidify these rights.  The steps needed for legalising each type of IP are described below.

Four Key Types of IP

This guide will cover four broad types of IP: patents, trade marks, trade secrets and copyright. Other types of IP are recognised in some countries, such as database rights, and/or other intellectual assets can be identified as subcategories of the above four areas.

Real World IP Scenarios

To clearly describe how the IP system works, provided below are examples below involving four entrepreneurs.  These scenarios will be used to describe how the different types of intellectual property law interact and apply to UK small businesses. They all involve chocolate brownies and some are inspired by actual businesses in the UK.

Business Number 1 – Speciality Brownie Oven

Charu has a background in electrical engineering and is a keen baker. She has always been interested in oven technology, which is notoriously unreliable in ensuring an even bake for the home cook.  Charu has custom-designed and fabricated her oven, which uses a unique type of heating element that she researched during her time at school and provides significantly more consistent results than standard convection ovens. After about a year of running tests, she is contemplating the launch of the ‘Brownie Baker,’ a mini-oven marketed to home bakers. She’s done a demo for John Hollywood and Molly Berry who were both blown away by the potential of the oven and have never seen a similar product before.

Business Number 2 – Brownie Experience

In the second business, Linda makes amazing brownies using a recipe that she pulled off of BBC Food and tweaked on her own. She has a thriving online business selling ‘Brownie Experiences’ designed to create an elegant dessert option at a fraction of the cost of high-end catering. Her ‘Brownie Experiences’ are beautifully packaged with her logo and colour scheme and come with a special Brownie Basket that she designed herself and looks great on a buffet table. Linda doesn’t have a lot of money to spare for solicitors, but she’d like to understand what she should do to maximise her brand as she scales up.

Business Number 3 – New and Improved Brownie Tastes

In the third business, owner Wanda makes killer brownies that have a sweet-salty but creamy taste and amazing melt-in-the-mouth texture. She uses a recipe that her great-grandmother developed during World War II which has special plant-based ingredients, plus she has a unique double-cooking method at two different temperatures. Wanda is pretty sure there is no one else in the market, at least in this country, making brownies this way and there is great demand for her brownies at the local village market.  Two high-end grocery chains have approached Wanda to put her brownies on their shelves, and a large plant-based food company has approached her about a supply agreement under their brand.

Business Number 4 – Brownie Media

In the last business, Evan is a food photographer and content creator, with a reputation for unique and quirky presentations. He did a photo series on brownies over the weekend and posted it on his Instagram. Seeing the series, a major gourmet foodie website contacted Evan to see if he’d like to work with them on their upcoming dessert-focused issue.

All four entrepreneurs have intellectual property assets that they can protect and leverage to grow their businesses.

Charu would seek a patent for the oven and take steps to protect it even before its patent is awarded.  Linda will register her logo as a trade mark and consider other protections she can get for her unique designs such as her brownie basket.  Wanda treats her recipe and methods as trade secrets and carefully shares details only under controlled conditions, ensuring that people she partners with do not unfairly duplicate her recipe. Evan’s digital media work is largely covered by the realm of copyright.

Below is an overview of each area of IP Law.  For ease of reading, these are general descriptions. Be aware that specific circumstances will need a custom analysis preferably by a solicitor or other qualified professional.

Patents

A patent is a grant of the right to exclude others from making, using or selling an invention for a specified time period. The inventor gets a legal monopoly over the invention, in exchange for filing the details of the invention with the government. After the legal monopoly expires (patent term) the invention is freely available to the public.

Making a UK Patent Application

In the Brownie Oven example, depending on which components are most novel or innovative, Charu can apply for patent protection for the whole oven, plus novel parts of the oven, and other inventive engineering approaches that comprise the oven (such as knobs, controls, etc).  A specialist patent law firm would evaluate the invention, review the public filings for ‘prior art’ e.g. existing technology that might deem her oven not innovative, and provide a strategy for drafting the patent claims (both in the UK and internationally).

The patent is then submitted to the IPO and evaluated, which is a fairly long procedure.  Once the patent is granted, Charu enjoys the exclusive right to manufacture and commercialise the Brownie Oven and is deemed the owner of the patent(s).

A patent significantly increases the commercial value of the Brownie Oven.  Venture capitalists and other business partners will carefully review technology companies’ patent portfolios to determine the value of their IP before investing.

Furthermore, while Charu is waiting for the patents to be awarded, she will need to be careful about disclosing the inventions to third parties, because public disclosure will impede or nullify her ability to get a patent. This is why the NDA is a key contract template, available for free here.

 Copyright

When thinking about copyright, think about the creative industries: literary, dramatic, musical, and artistic works, as well as film, sound recordings, broadcasts, and typographical arrangements. Copyright protection arises automatically upon the creation of a work, provided it is original and fixed in a tangible medium. The copyright owner holds the exclusive rights to reproduce, distribute, perform, and display the work, and to create derivative works based on it.

Software deserves a specific call-out under copyright.  Since the development of the first computer programs and early operating system technology, IP in software has largely been protected by copyright asserted on the source code that runs the software.  Other types of IP can also be associated with software-enabled products or computer programs, depending on the technology and implementation, such as database rights, patents and trade secrets. This is a complicated area and not part of the Beginner’s Guide, but is a core focus of the Digital Legal Forum.

Digital Media and Copyright

In addition to software, Evan’s brownie photography business will largely leverage copyright law to commercialise his creative output.  With digital content, images, videos, music, software, or written works are copyrighted automatically as long as the content is original and fixed in a tangible form, such as a digital file. However, to ‘perfect’ the copyright, best practices should be followed, such as marking, archiving or escrow, licensing and otherwise ensuring documented ownership rights.

Copyright protection in digital media grants the owner exclusive rights to control how their artwork is used, including the rights to reproduce, distribute, display, perform, and create derivative works based on the original content. Any unauthorized use of the protected digital media, such as copying, sharing, or modifying without permission, constitutes copyright infringement, which can result in legal action against the infringer (with some exceptions).  Copyright law ensures that creators and rights holders can maintain control over their digital media and seek remedies if their rights are violated.

Copyright Infringement

Copyright infringement occurs when someone uses a protected work without the copyright owner’s permission, thereby violating the exclusive rights granted by law. The copyright owner can take legal action to address such infringement, which may result in damages or injunctions to prevent further unauthorized use. The duration of copyright protection varies by the type of work but generally lasts for the lifetime of the creator plus 70 years for most literary, dramatic, musical, and artistic works.

Trade Secrets

Trade secrets are the category that lawyers and contract professionals both love and hate.  Love because broad sets of information can be put into the trade secrets ‘bucket’ and protected by contract documentation such as NDAs.  However, enforcement of trade secret rights can be difficult if a dispute goes before the courts.  Briefly, trade secrets are confidential business information, practices, methods or processes that provide a competitive advantage to a company. Unlike patents or trademarks, trade secrets are not registered with any government agency. Instead, they are protected through secrecy and contracts. To qualify as a trade secret, the information must be genuinely secret, provide economic value because it is not generally known, and be subject to reasonable efforts by the owner to maintain its secrecy. Common examples of trade secrets include formulas, manufacturing processes, customer lists, and proprietary algorithms.

In the UK, the protection of trade secrets is primarily governed by common law / case law principles and refined by the Trade Secrets (Enforcement, etc.) Regulations 2018.   If a trade secret is unlawfully disclosed or misappropriated, the owner may seek legal remedies such as injunctions or damages. However, the owner has a much higher burden of showing the existence of the trade secret than a patent owner would, for example. In addition, others can independently develop the information, formula or practice and as long as there is no reference to the trade secret at issue or other IP infringed, they are permitted to do so.

Sometimes, after performing an IP audit of the asset or technology in question, it is determined that under the various IP law structures and rules of admission, the item is ONLY protectable as a trade secret.  This is often the case with recipes and formulas.  Looking at our four entrepreneurs, Wanda’s New and Improved Brownie Recipe likely can be protected as a trade secret, in which case the legal means of protecting it need to be implemented early in her journey.

Trade mark and brand-related IP

Branding and marketing are a ubiquitous presence in daily life globally.  So, it is fair to say that all businesses need to consider their trademarks and other brand-related IP.  However, some industries will have brand strategy as their primary legal focus prioritised over other IP issues. Good examples are the fashion industry, a massive contributor to the UK economy, and the food industry.  Businesses in these industries need to establish their brand recognition, reliability and reputation to differentiate in a competitive space.  Brand-related IP comprises a few different ‘buckets’ of legal subject areas.

Trade marks

A trade mark is a distinctive word or logo that is registered with the UK Intellectual Property Office and enables a company to differentiate its business in the market. Trade mark law provides for legal remedies (damages, injunctions) when trademark infringement has taken place.  Trade marks can be words, colours, sounds, symbols, or combinations of these that create a brand identity.

To obtain trade mark protection, it is necessary to register the requested logo or name and prove that the mark is not generic, offensive, or already used by someone else in the same market.  Trade mark registration is a typical speciality within a trade mark practice. These are specialist analyses that are often supported by trade mark law firms.

The Digital Legal Forum is not a trade mark registration website but we can provide general guidance on what to watch for in trade mark protection issues and help businesses identify issues or advise on trade mark infringement.

Design Rights

Industrial design rights legal protection for the visual appearance of products, including their shape, pattern, or ornamentation. This form of intellectual property focuses on the aesthetic aspects of a product rather than its functional features. To obtain an industrial design patent, the design must be original and possess individual character, meaning it should not closely resemble any existing designs. Once granted, the owner has the exclusive right to use the design, preventing others from manufacturing, selling, or importing products that incorporate the protected design without permission. This protection typically lasts for up to 25 years, subject to renewal fees.

Intellectual property in industrial designs is crucial for businesses as it allows them to protect their unique product designs from being copied or imitated by competitors.

This not only preserves the distinctiveness of a brand but also ensures that companies can capitalize on their investments in design and innovation. Design rights not only differentiate the product and therefore attract customers, but also can potentially generate additional revenue through licensing or selling the rights to their designs. In a marketplace where appearance can significantly influence consumer choice, safeguarding industrial designs is a vital aspect of a company’s intellectual property strategy.

Hopefully, this description points to Linda, with her Brownie Experience business. She will want to consider to what extent she can obtain IP protection for her innovative basket and other packaging!

Other Brand-related Legal Protections

Beyond trademark and patent protection, businesses should be aware of other fundamental brand-related legal issues that can impact their operations and public image:

• Domain Name Creation and Protection: Securing a domain name that reflects your brand is a fundamental step in establishing your online presence. This process involves ensuring the selected domain does not infringe upon existing trademarks and is protected from potential cybersquatting.
• Company Name Searches and Registration: Before launching your business, conducting thorough searches to ensure your chosen company name is unique and not in conflict with existing trademarks or company names is essential. Proper registration further safeguards your brand’s identity.
• Personal and Celebrity Brand-related Issues: Protecting the use of personal likeness, names, and other identifying features is fundamental, especially for individuals or businesses leveraging personal or celebrity brands. Unauthorized use of these elements can lead to significant legal disputes and damage to reputation.

Specialist Protections for Other Intangible Assets – Examples

Other types of intellectual property laws or quasi-IP can also be leveraged depending on the product or service and the country at issue. A few are described below.

Plant breeders’ rights

Intellectual property rights over plant varieties in the UK are known as plant breeders’ rights (PBRs).  IP rights in new plant cultivars are awarded in light of the significant investment of time and resources it takes to develop them – in many cases over ten years.  This type of IPR enables the owner to prevent the sale of the cultivar by others.  The Animal and Plant Health Agency (not the UK Intellectual Property Office) awards PBRs for the UK.

Moral rights

The concept of ‘moral rights’ under intellectual property law refers to the personal rights of creators and authors.  The law protects their connection or ‘attribution,’ among other things. Unlike economic rights, moral rights focus on preserving the integrity of the authorship to the creator.  Caution though: there is significant variability from country to country in the law of moral rights.   For example, France’s treatment of moral rights is different from that of the United States, with the UK offering a further variant.  In fact, often US contracts will seek to exclude or obtain waivers of moral rights in media and other transactions.  When working internationally, this is an important nuance to understand.

Database Rights

Database rights are another type of IP rights that have varying legal treatment depending on the country involved.  For businesses that create or rely on databases, understanding and utilizing database rights can be crucial for protecting their investments in data compilation. These rights can prevent unauthorised use or reproduction of databases, offering legal recourse if infringements occur.

IP Transactions and Contracts

When thinking about intellectual property, other peoples’ inventions, trade secrets, data or other ‘soft’ assets are important to consider.  Here are some examples using the brownie entrepreneur scenarios:

• Charu may need to use third-party manufacturer components for her oven.  These components will likely have various intellectual property protections registered by the third party.
• Either Evan or his employer will likely incorporate other people’s work into their spreads and feeds, to come up with a complete visual storyboard.
• In marketing the Brownie Experience, Linda may use other company certifications or logos to boost her brand, such as an organic ingredient certification.  Or she may look to get a partner from the catering industry to co-market the brownie experience.
• As she’s scaling her business to supply brownies to large food companies, Wanda may want to hire people who have experience with high volume baking and will potentially look to ‘poach’ someone from a similar company which has developed an efficient manufacturing process without compromising quality.

In each of the above examples, contracts will need to be concluded to address third-party intellectual property cleanly.  Licensing transactions play a critical role in business by enabling the lawful use of protected intellectual property. These transactions involve a formal agreement where the owner of a particular invention, design, or product grants permission to another party, often a client or business partner, to use their protected assets. Intellectual property law is structured so that it is best to have licensing and permissions granted explicitly in writing (eg, through a written contract) to ensure that all parties have consented to the terms. This process preserves the owner’s rights while allowing the client to utilise the invention for commercial purposes.

Technology and IP licensing is a strategic effort that can lead to significant commercial opportunities. By obtaining usage rights from the intellectual property owner, a company can legally incorporate protected inventions into its operations or products. This not only helps avoid potential disputes but also adds value to the business. Understanding the legal nuances of licensing transactions is essential to ensuring that the business arrangement is both legally sound and commercially advantageous.

Technology transactions

Regardless of the form of intellectual property involved, data and technology contracts enable companies to document important alliances, develop secure and compliant platforms and products, and realize the maximum value of their data and IP assets.

Investing in data, media and technology contract templates up front simplifies the negotiation process.  Then, ensuring you have the right contract template guidance is an educational tool for sales, business development and procurement, further speeding up the contracting.  Examples of these types of transactions include:

• Licensing and tech transfer agreements
• Distribution agreements (hardware, software or both)
• Managed IT service agreements
• Services-based or Development Transactions (Web, applications, medical device, IoT, etc.)
• Cloud-related agreements, SaaS
• Privacy and cybersecurity-related documentation

IP-Related Training and Templates

The Digital Legal Forum empowers small businesses and entrepreneurs by providing training, templates, and services focused on intellectual property (IP) management. Resources are designed to help you navigate the complexities of IP law, ensuring that you can protect your innovations, brands, and creations effectively.

Whether you want to understand the fundamentals of trademark registration, avoid patent infringement, or enforce your IP rights, our mission is to equip you with the knowledge and resources to confidently manage IP-related issues, safeguarding your business’s valuable assets.

Conclusion

In conclusion, understanding intellectual property (IP) is vital for protecting your business assets and innovation. Trademark infringement occurs when a company uses a brand name or symbol that is confusingly similar to an existing trademark, which can lead to legal disputes and significant financial losses.

Similarly, patent infringement happens when someone unlawfully uses, sells, or manufactures a patented invention without the patent owner’s permission. Both trademark and patent infringements can have serious consequences, making it essential to be aware of your rights and the necessary legal protections. By safeguarding your intellectual property, you can ensure your business’s long-term success and integrity.