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Business Succession Factsheet: Protecting your intellectual property

Many business owners invest significant amounts in developing intellectual property that they use in their business. However, they often give very little consideration to how this valuable asset should be protected.

In this factsheet, senior associate Hayden Delaney and solicitor Michele Davis outline the key things that business owners should consider to protect the intellectual property they develop in their business.

What type of IP do you have?

One of the keys to effectively protecting your intellectual property is taking the time to identify what intellectual property you and your business own.

Legislation in Australia protects the different types of intellectual property that exist. Some rights arise automatically, while others require registration and examination in accordance with applicable legislation or regulations.

The definition of intellectual property is broad and encompasses things such as know-how, confidential information, business names, domain names, current and future registered and unregistered rights related to copyright, circuit layouts, designs, trade marks, moral rights, patents, inventions and discoveries.

While 'intellectual property' is all these things, it will usually fall into one (or more) of the following categories:

  • Copyright
  • Moral rights
  • Trade marks
  • Designs
  • Patents
  • Plant breeders' rights

Copyright

Key characteristics

  • Copyright protects the original expression of an idea, not the idea itself.
  • Copyright applies to original works of art, literature, music, films, broadcasts and computer programs.
  • Copyright protection automatically arises at the time of creation.
  • Copyright generally last 70 years from the author's death or first publication or broadcast.

Copyright is protected under the Copyright Act 1968 (Cth). The creator/author of the copyright is generally considered to be the owner of the copyright. However, there are exclusions. For example, if the copyright is created during the course of employment by an employee, the employer is the owner. However, a contractor will own the copyright in any work it undertakes, unless the copyright has been assigned in writing.

Copyright owners have exclusive rights to do certain acts with an original work or other subject matter, including publishing, making adaptations of the work, broadcasting and licensing others to use the work. The Copyright Act also provides for a number of 'fair dealing' provisions that exempt certain uses of copyright work from being an infringement of copyright, such as for education purposes or news reporting.

As with all intellectual property rights, for an assignment or transfer of copyright to be effective, it must be in writing.

Moral rights are a neighbouring right to that of copyright, although you do not need to be the owner of copyright in order to hold moral rights. Moral rights are the right to be attributed as the author/creator of the work and to take action if someone else claims they are the author/creator of the work or if the work is altered, distorted or treated in a derogatory manner. Moral rights cannot be assigned, although they can be waived by the rights holder.

Trade marks

Key characteristics

  • A trade mark is used to distinguish goods and services of one trader from those of another trader.
  • A trade mark can be a word, logo/picture, sound, smell, shape, aspect of packaging, or any combination of these.
  • There may be common law rights in unregistered trade marks.
  • The initial registration of a trade mark lasts for 10 years.

The Trade Marks Act 1995 (Cth) provides the framework for the protection of trade marks. IP Australia administers the application, examination, registration and renewal of trade marks in Australia. However, it is up to the owner (or in some cases the licensee) of the trade mark to maintain and enforce trade mark registrations.

Australia is a signatory of the Madrid Protocol, which enables international trade mark applications to be made in up to 81 countries on the basis of an originating Australian trade mark registration.

Domain and business names

It is important to note that the registration of a domain name or a company name does not give a company or an individual rights to a registered business name (as provided under the Business Names Registration Act 2011 (Cth)), nor does it mean that the domain name or company name are not infringing any trade marks which may be registered with IP Australia. A registered business name does not give the owner of the name a registered trade mark.

Therefore, while businesses need to register a business name in order to be able to lawfully trade under that name, business owners need to consider the extent of the protection that that registration provides, and whether they should also register a trade mark for that name.

Designs

Key characteristics

  • A design can include the features of shape, configuration, pattern or ornamentation.
  • To be registrable, a design must be new and distinctive.
  • The initial period of design registration is five years, renewable for an additional period of five years.

The Designs Act 2003 (Cth) regulates the protection of designs. IP Australia administers the application, examination, registration and renewal of designs in Australia. The design right holder is responsible for maintaining and enforcing its rights in the design.

Design registration is intended to protect designs that are to be applied industrially. Unlike patents, design rights only cover the appearance of an item, not how it works.

Patents

Key characteristics

  • Patents generally cover any device, substance, method or process which is new, inventive and useful.
  • Australia offers two type of patents: standard and innovative.
  • Depending on the type of patent, a patent holder has protection for eight to 20 years.
  • A patent application is to have a maximum of five claims.

Patents are regulated by the Patents Act 1990. Patents are administered by IP Australia. The individual holder is responsible for maintaining and enforcing its rights in its patent.

There are two types of patents in Australia: standard and innovative.

A standard patent, once granted, gives long term protection over an invention for a period of 20 years. The threshold for applying for a standard patent is an 'inventive step'.

Innovative patents grant protection for a period of eight years and are designed to protect inventions that may not sufficiently satisfy the inventive threshold required for standard patents. The threshold for applying for an innovative patent is an 'innovative step'.

Plant breeders' rights

Key characteristics

  • The new plant variety must be distinct, uniform and stable.
  • Protection can last up to 25 years, depending on the variety of the plant being registered.

The protection and administration of plant breeders' rights are covered by the Plant Breeder's Rights Act 1994 (Cth). In order to be registered, the plant variety must be new or recently exploited. The period for 'recent exploitation' ranges from a year to six years of commercial sale of the plant variety before registration, depending on the plant variety and whether it has been sold overseas or only in Australia.

In order to obtain protection, the applicant must verify the claims that the plant variety is distinct from all other varieties of common knowledge; this is usually done by conducting a comparative growing test.

IP Australia is responsible for the administration and registration of plant breeders' rights. The maintenance and enforcement of plant breeders' rights are the responsibility of the rights holder.

International protection

Importantly, it is also possible to register designs, patents, plant breeders' rights and trade marks internationally, and to obtain protection on a wider basis in many countries throughout the world. Because Australia is a party to various international treaties, most applications internationally can be made through IP Australia (at a cost).

For more information on the protection of intellectual property in Australia and internationally, please contact HopgoodGanim's Intellectual Property and Technology team.