Most business people are unaware of the intellectual property in their midst. Earl Gray and Lianne Young of Simpson Grierson explain how to recognise it and how to protect it

All businesses deal with some form of intellectual property ("IP") rights in their day-to-day operation. While most product-based businesses are very aware of the IP relating to their products (for instance, product designs and brand names), many use and rely on IP every day without realising it.

It is crucial that businesses know what IP they use and what their rights for that IP are. Effective management, protection, and use of IP are vital to a smooth-running business and a prerequisite for a business seeking to maximise its profits. Of course, it is also important to ensure businesses identify and do not infringe anyone else's IP rights.

IP is in many ways just like other assets. A story often told is that if all the physical assets of Coca-Cola were destroyed, it could still raise many billions of dollars in funding on the strength of its rights in its name. Like other assets, businesses need to have appropriate strategies to protect and leverage off the value of their IP.

Recognise your IP

IP does not only cover copyright works, trade marks, patents, and designs. There is valuable IP in unregistered brand and business names, a corporate style or image, confidential information, staff training manuals, and operating procedures. Seemingly uncreative documents like reports and internal memoranda are protectable copyright works. Copyright exists in the software that businesses are licensed to use and possibly also in enhancements made to that software. There is also copyright in the content and the format of annual reports or advertising flyers. Additional rights in well-known persona or images may exist.

Steps to protect and exploit your IP

Identify and record your IP
Identify potentially valuable IP and separate it into categories, such as:
- trade marks, brands, logos;
- copyright works;
- patents;
- designs; and
- trade secrets and know how.

Keep registers of these assets, which hold vital details for the category. For example, a copyright register could list details of:
- owner;
- author/creator;
- date created;
- date first used/published;
- where copies of the work (including any preparatory notes, diagrams, drawings) are kept;
- improvements and adaptations (and when and by whom these were made); and
- users and licences relating to the work.

Protect your IP
Make others aware that you value your IP and guard your rights jealousy. For example:
- use a ? legend on all copyright works even if it is a new logo or newsletter;
- use the ? symbol with all unregistered brand names and logos and other unregistered marks; and
- use the ? symbol with all registered trade marks.

Review your IP registers and decide if you have any potentially registrable items (trade marks, designs, and patents). Decide if existing common law rights or other legislation such as the Copyright Act 1994 and Fair Trading Act 1986 adequately protects them, or if you should formally register certain IP.

Make your employees and business associates aware of your rights. Consider whether your employment and trade contracts adequately protect your IP, and whether you have taken measures to physically and legally secure your IP against theft by competitors or employees.

Ensure you are not putting your rights at risk by improper use, or allowing others to use them without your authorisation. If you are a licensee, ensure that you are not inadvertently breaching your licence terms.

Let New Technology Work for You

The Internet and e-commerce have opened barriers in trade and the exchange of information. You may consider reserving a domain name and creating a web site for information and/or trading purposes.

IP accessible on the Internet generally has the same protection as that recorded on more traditional media such as on paper or a compact disc. Similarly, using a work on the Internet is similar to using it in a newsletter or advertising flyer. There are, though, international and specific technological considerations.

Expand your horizons

If your IP relates to a product or process that is marketable overseas, consider how best to market it while protecting your IP.

Entering new markets means new opportunities, but also new risks if you do not look into protecting your intellectual property in those markets. You could also be infringing rights of another trader (for example, a company already operating in an overseas market using an identical trade mark for similar goods).

Consider if there are opportunities to register relevant trade marks, patents, or designs in overseas jurisdictions. If so, which jurisdictions should you consider applying in for such protection?

Your business's IP is a valuable asset if managed effectively.

This is a general summary only and should not be taken as a substitute for specific advice.

Earl Gray is a Simpson Grierson intellectual property group partner and Lianne Young is a senior associate in the firm. Both are in the Auckland office.

Web site: Simpson Grierson
Earl Gray email: earl.gray@simpsongrierson.com

March 2001