There are various forms of Intellectual Property (“IP”) protection and the main forms being patent, design, trade mark and copyright protection. Depending on the nature of your product and/or service one or more of these forms of IP may apply.
Of course, you cannot blow your entire budget before you even know if your business idea has commercial application and so it is at this point where you work with your IP attorney in determining which protection is absolutely required immediately and which can be delayed (and at what risk).
Legal protection must fall within, and align with, your overall business plan.
It is highly advisable that the moment your idea is conceptualized (in whichever form), you need to immediately contact an IP attorney to ensure that all aspects of your business that are eligible for IP protection are considered properly. That is, before seeking investment, pitching your business or idea or introducing your product/service to the market (even if it is simply for conducting market research), your IP protection needs to be secured prior to disclosing your product/service in any way.
When looking for investment, without having the necessary IP protection there are simply too many risk factors involved and investors could very well withdraw from the opportunity on this basis alone. However, with proper IP protection in place, it offers you and your potential investors, security and more opportunities in that you will be able to protect your product against infringement and defend your exclusive right to use, make, sell or import it. You will also be able to negotiate royalty deals (which are very attractive to investors), exploit it through strategic alliances and obviously, when the time is right, make money by selling it.
The reality for most SME’s
However, the reality is that for most SMEs, investment isn’t really relevant but IP protection still is. As will be discussed below, some forms of IP protection require that applications are lodged before the product reaches the market. Therefore, in order to avoid destroying your opportunity in secure as much IP protection as possible, a visit to your IP attorney is still very important.
Protecting and ensuring your IP portfolio is relevant and active consideration is vital to the success of any business. Doing a regular IP spring cleaning exercise, and ensuring you have the right legal partner in aligning your IP and business strategy, will lead to this success.
TYPES OF IP PROTECTION:
Patent protection can be the strongest form of IP protection. It protects the underlying concept or invention and because it can grant such a wide monopoly, there are strict requirements necessary to be eligible for such protection.
One such requirement is that the subject product (i.e. the invention) needs to be new and in other words, it must not exist anywhere else in the world. Accordingly, before the patent or provisional patent application is lodged, the invention cannot be disclosed to any third party. However, there are instances where this cannot be avoided such as the case where a third party manufacturer needs to produce a prototype. One way of keeping the core components of your invention secret is to insist that all third parties sign a non-disclosure agreement (NDA). However, NDAs have serious shortcomings and you need to be aware of these risks before disclosing your invention to any third party.
Another implication of the “new” requirement, is that the invention cannot be a replication of a competitor’s or third party’s product – even if that product is only available in another country.
While there may be a lot of hurdles to jump through for patent protection, because of the scope of the monopoly is so wide, the mere registration of a patent can exponentially increase the value of one’s business as it will effectively keep out all competition for the lifespan of the registration, namely 20 years.
Registered designs protect the appearance and can be protected as either aesthetic designs or as functional designs. Aesthetic designs are registered exclusively for the aesthetic appearance of articles, whereas functional designs are registered for features that are, at least to a certain extent, dictated by their function. Both aesthetic and functional designs provide a monopoly right for a limited period of 15 and 10 years, respectively.
In the case of an aesthetic design, the article needs to be new and original, and in the case of a functional design, the article needs to be new and not commonplace. While the requirement for the design to be new is similar to that of patent protection, for design protection in South Africa, there is a 6-month grace period. What this means is that if the product was commercialised (or otherwise disclosed to third parties) less than 6 months ago, it may still be possible to register a design.
The protection given by a registered design is in any design applied to any article, whether for the shape, configuration, pattern and/or the ornamentation, and not for the underlying concept. Therefore, a competitor can apply a different design to a product which produces the same result and thereby avoid infringement. That said, design protection is just another barrier for competitors to copy one’s products.
If you want to build a brand, one of the most important steps in doing so is to protect all your marks eligible for trade mark protection. Ultimately, this asset will be the most valuable asset in your business and therefore it is imperative that you protect it properly.
An important principle in trade mark law that determines whether a mark is registrable is considering if it is distinctive. A further important aspect is to determine what category / categories in which the application must be filed. This should be done before you file a trade mark application and your IP attorney can advise you further on this aspect.
The protection of a trade mark will provide is to prevent third parties from using the identical or similar name or trade mark in relation to the goods or services to which the mark is applied. Therefore, while competitors will be able to sell the same goods or render the identical services, they will need to do so under a different name. Again, this adds yet another barrier preventing competitors from copying one’s products or business.
Copyright is an exclusive right which protects original works of authorship, including musical, literary and artistic creations. While this is very important for artists and creatives, it has substantial application to all businesses in the sense that it helps protects logos (artistic works); websites, brochures and catalogues (literary and artistic works, including photographs); product packaging (literary and artistic works); mobile apps (software, literary and artistic works); etc.
Where copyright differs from patent, design and trade mark protection, copyright arises as you express your ideas on the page and there is (in general terms) no registration required for protection.
Therefore, your work is automatically protected provided certain requirements are met.
Another significant benefit in copyright protection is that it can be enforced in most first world and industrialised countries outside of South Africa. Whereas, patent, design and trade mark protection are only protectable in those countries in which registration is sought.
A vitally important aspect regarding copyright protection is to ensure that the ownership properly subsists in your name. If a company contracts an external designer to design a logo, software, a website, etc, the design agency would be deemed the author and owner of the copyright. Therefore, companies need to ensure that a (very simple) agreement is concluded ensuring transfer of the copyright.
It is important to note that copyright does not exist in the underlying idea or concept. For example, the idea of requesting a taxi by way of using a mobile app does not qualify for copyright protection. However, the layout of the mobile app, the terms and conditions, images, etc. are all protected to some extent – and so no one can copy the material or a substantial part of it. Accordingly, copyright can be a very powerful tool in preventing third parties from copying one’s business.
As you can see, IP protection does not provide bullet proof protection in preventing third parties from copying your business or products and, in fact, fair competition is important for any thriving economy.
To stand apart from one’s competitors requires innovation and it is that innovation or novel idea or product which needs to be protected (so as to encourage further innovation). This is where IP protection has its place.
The various forms of IP protection are the barriers surrounding the business which prevents competitors from simply applying a copy-and-paste approach. The more barriers, the harder it is for competitors to copy and it forces them to innovate and come up with their own identity.
Intellectual property is the life blood of every business and if dealt with properly, will serve to enrich and nurture the business throughout its existence.