Types of intellectual property (IP): Does your small business own any?
Posted: Tue 9th Mar 2021
I was speaking to an audience of 300 entrepreneurs at a Google Labs event before the pandemic. All those young bright faces looking at me waiting to reveal the 'secrets' of IP. I started with a question: "Who here owns any IP?__" In that packed room only three to four people confidently put up their hands.
Then I dropped my quiet bombshell. Without exception, everyone in the audience owned IP. And if you're a business owner reading this, you own IP too. So what exactly is IP and how can you use it to help your business grow?
Intellectual property largely refers to the intangible assets within your business, and is covered by a set of international rules protected by law. Some IP is automatic, other IP requires registration. Let's take a look at the different kinds to see how it can help your business growth.
This is the simplest form of IP.
It is an automatic right. If you create something original using your own skill, you own it – provided of course you have not copied it.
It is a property right – if you own the copyright, you can license it and sell it just as you would any other piece of property.
You can't copyright an idea – only the expression of that idea, whether as a book, a design or film, an image, a pitch presentation, a computer programme, a methodology or instruction manual.
Any copyright you own is, in general, protected for 70 years after your death.
Most companies don't audit what copyright they own or produce. What a waste! It's a really interesting – and valuable – exercise. Much of the copyright will only be of value internally, but some can be turned into new products or services.
Some companies earn revenue from licensing their copyright. A photographer will license an image for a certain use. Or you can develop a methodology to train other practitioners – under your licence.
A licence is basically a set of permissions allowing the licensee to use your copyright under a set of agreed conditions, such as in which geographical area, over what time, to what audience. You, the licensor, can earn revenue in a variety of ways through a licence fee, a share of revenue, a royalty payment.
During the pandemic, we saw countless examples of businesses using their copyright to pivot into new areas – reframing their existing copyright in fresh ways to find different audiences, charging for their services in additional ways. This is why doing a copyright audit can be so useful – are you missing out on potential business or revenue models?
Unlike copyright, trademarks are not an automatic right. They must be registered through the government's Intellectual Property Office based in Newport.
A trademark can be words, an illustrated mark, or a combination of both. And the purpose of the trademark is to help customers differentiate one company's product or service from another – and to stop other companies 'passing off' your goods as theirs.
That helps make sure the goodwill and reputation you've built up stays with you and isn't commercialised by someone else. You can trademark both your company name and the products it offers.
We're all more familiar with trademarks than other forms of IP. We come across them every day – the icons on your smartphone are all individual trademarks, as are all the brands we have in our store cupboards. Trademarks can be both 2D and 3D.
Registering a trademark
When you register a trademark, that registration generally lasts for 10 years and can be extended indefinitely.
There are 45 internationally registered trademark classes. When you register, you have to decide which you want your trademark to be applied to. Classes 1–34 relate to goods and 35–45 to services. You can choose as many as you want when you first register.
There are various restrictions on what you can and cannot register, such as internationally recognised symbols like flags or hallmarks, common names, or if someone else has already registered a trademark similar to the one you want to register for the goods/services you want to provide.
Registering a trademark is only worth doing if there is a sound commercial reason underpinning your decision. It isn't expensive and is easy to do via the government website. However, if you have a more complex or international registration, I recommend you consult a trademark attorney.
This is another type of IP you can register. Design rights protect the 2D and 3D look and feel of a product. That includes the shape, colours, decoration, materials and configuration.
If you've launched a product, you have unregistered design right protecting your design for 10 years after it's first sold. However, if you register the design right, it will be protected for up to 25 years (provided you renew every five years).
Obviously, any registered design needs to be original with its own characteristics. And you must submit the designs to the Intellectual Property Office. You also need to keep the original dated drawings.
It can be useful to join ACID (Anti Copying in Design), a lobbying organisation that allows members to store their designs in their design library.
Iconic furniture and lighting designs are protected by design rights. But so too are packaging elements. For example, Mars has many design rights registered for its Mars Bar, including the typography. Both Dairy Milk and jeweller Tiffany have registered colours as part of their design rights.
Most companies I work with don't need to register design rights. But if how something looks, feels and is configured is important to your business, look into this to make sure no-one can profit from your design.
Patents seem to be one of the most frequently talked about areas of IP, but one most companies will never need!
A patent protects the concept behind an idea – be that a process, a formula, a computer programme or system. The really key points underpinning a patent include the following:
It has to be new – and never have been disclosed to the public before
It must involve an inventive step
It must be capable of being made or used in some kind of industry
To register a patent is a lengthy and expensive process, but if successful can add real value to your company through exploitation and licensing. You'll need to approach a patent attorney to help you work your way through the system.