INTELLECTUAL PROPERTY RIGHTS
(A check list for the careful )

"A review of your rights"

1. Introduction

When we talk about your "rights" in an intellectual property sense, we are referring to any or all of:

• your name
• your major Trade Mark as distinct from your name
• your Logo as distinct from your Trade Mark
• Protection of your logo by Trade mark registration
• your "get up"
• your goodwill
• all your data
• supplier contracts
• software
• Employee Agreements
• Patents
• customer contracts
• all of your trade secrets - confidentiality
• all of your drawings
• the appearance of your major product

In most cases, I have provided some background for each topic that defines each topic in an intellectual property sense. I have then gone on to pose a number of questions to set you thinking about the adequacy of your intellectual property protection.

The aim of the exercise is to give you some food for thought in respect of your intellectual property and encourage you to seek professional advise if there is any area of concern. The comments are given from an Australian perspective but in most cases they will be relevant to those located in other countries.

Howard Schulze, Collison & Co (8212 3133)
August 1999

2. Your name

Background

Your name, whether a personal name, a business or company name, is not protected simply because you register it as you must as a business name or company name. The rules that are useful in Australia to "protect your name" are the common law of passing off and sec 52 of the Trade Practice legislation as well as the Trade Mark registration system. These are all laws that need special understanding and care in using, so the following questions are directed to some of these problems.

These are generally applicable to those who have a distinctive name that is not also their main Trade Mark. If this does not apply, proceed directly to the next section.

Questions

• Have you any registered protection of your name by separate protection of the "distinctive" part in a Trade mark sense?
• For instance, do you have your name registered as a Trade Mark as being different from a business name registration or company name registration?
• If so, what of the 42 different classes of goods and services applicable in Australia have you protected the name in?
• Which countries other than Australia can you for certainty have the right to use and continue to have the right to use (as distinct from protect) your name? (This needs to be considered with consideration of what range of goods and what range of services are of interest.)
• If you intend in the future to expand your range of goods or services in Australia can you do so without being blocked by someone blocking you in those other fields by having blocking registrations in those areas?
• Have you considered expanding your rights by registration of your name as a defensive registration which allows the registration to be kept alive in areas that you do not actually use the name?

Background

Your name or at least the distinctive portion may be the same as your trade mark and the same questions should apply. However, because a trade mark can be even more important there are some further questions that can be considered.

Questions

• Have you established defensive or aggressive strategies for protection of your Trade Marks?
• Have you separated important marks from less important marks so that investment in protection can be targeted for efficiency?
• What monitoring of registrations by others of Business names, Trade Marks in at least the most relevant of the 42 classes, entries in journals and telephone books etc, have you in place?
• It is useful to have a strategy in place that anyone of your staff can follow if an infringement letter is received. Have you any guidance for staff in place if a legal crisis arises?
• These can often threaten injunctions within 1 or 2 days. This may well be to immediately ring Howard at Collisons but may require immediate notification to your customers with indemnities being offered to stop trade being immediately lost,
• Have you a direction in place if someone arrives on your door step with an Anton Pillar order (a civil search and seize order offered by the court on the basis of a private complaint). (I had one client ring me at 1 o’clock in the morning with a scream for help. His factory was completing urgent orders when this order for instant search and seize was received)
• If you are looking at new Trade Marks to be adopted do you follow the following strategy:

1. A preliminary search in major countries of interest eg Australia, USA, Europe
2. If generally clear an intensive search in Australia
3. If clear a first filing (probably Australia to establish a first priority date which can be used for filing in other countries within 6 months.
4. Intensive search in other major countries.
5. Filing strategy depending on the search results within the six month time.

Hold general usage of the Trade Mark until filings in place and follow up search completed at the eight month from filing date to establish clear access.

4. Your Logo as distinct from your Trade Mark

Background

Your logo can be protected by a number of laws including Trade Mark registration and common law rights which are considered in other parts of this questionnaire. However, one area that is unique to logos is copyright and this needs a special understanding.

Copyright

Copyright is a powerful right that is created the instant any artistic or literary work comes into existence around the world and at no cost or any registration . It is then owned by the artist for the whole of the artists life plus 50 to 70 years. It is a criminal offence to infringe the copyright of others.(One artist in Adelaide is currently selling his copyright on labels produced many years ago by him for the individuals on commission)

Questions

• Who is the artist of your logo?
• When was the work (your logo) created?
• Is the artist still alive? If dead then do we know the date of death for assessment of the length of protection (50 years after death in most cases).
• Can he or she be contacted (presumably only while alive!)?
• Have you an agreement with the artist to not have the artists name on the artist work- that is - your logo? (attribution which may be compulsory under the current moral rights legislation before parliament now)
• Do you own the copyright of each of the rights including changes of any of the following:
  • The artists
  • The copyrighters in the advertising agency
  • The type setters
  • The printers
• Have you an assignment in writing from each of these persons or entities of all their interest in the copyright in the logo for all countries of the world? Or do you simply have "a verbal agreement to use" these? If so, have you any record of who offered this "licence", when this offer was made and between who? What are the terms of this licence? Can it be revoked at will.

Our questions here are not intended to be impossible to answer but simply to point out that if these matters have not been considered in the past we should start to record matters before people die, forget or disappear. A folder that is a record of these types of matters (an asset register) could be a convenient technique to use.

• Have amendments been made to the logo.
• If so who made the alterations and who owns the copyright in these amendments.

Distinctiveness of the logo.

• Have you rules as to how your logo can be used (a specification for all users and printers) by:
  • Your company.
  • Your suppliers
  • Your customers

• Do you insist that its use is always "as a Trade mark owned by your company" as in Another Philmac* product (*Philmac is a Trade Mark of xyz company.)?
• Do you mark on every piece of literature with your claim to copyright and your claim that the material is your Trade Mark (as well as a claim to confidentiality)?
• Do you have subsidiary companies in Australia or elsewhere using your mark? If so, are they licensed (in a formal written documentation sense with control of quality) to do so? There is value in doing so if this has not been done in the past.
• Do you know how to do this for Australia and other countries?

5. Protection of your logo by Trade Mark registration

Background

Logos as well as names are eminently protectable.

Here is a check list for Logo registration protection:

There are four categories of protection

1 Defensive heart land
Register only for precise goods or services of interest. No active monitoring of the actions or registrations of others and no attempt to attack any use in associated areas. (Advantages are that costs are kept to a minimum)

2 Defensive extended
Register for extended ranges of goods and services to anticipate future expansion. Register in associated areas of interest as defensive marks. No active monitoring of the actions or registrations of others and no attempt to attack any use in associated areas except by indirect reliance on Register entries.

3 Aggressive heart land
Register for extended ranges of goods and services to anticipate future expansion. Register in associated areas of interest as defensive marks.
Maintain watching searches in respect of registration in heart land areas and enforce these including actively opposing registrations of others and threatening infringement as necessary but in restricted areas of main interest.

4 Aggressive extended
Register for extended ranges of goods and services to anticipate future expansion. Register in associated areas of interest as defensive marks.
Maintain watching searches in respect of registration in all areas and enforce rights only these including actively opposing registrations of others and threatening infringement as necessary in all areas of possible interest.

Can you rate your category for each country?

6. Your Get Up

Background

This is normally a retail asset as in the get up of the KFC chicken takeaway place.

However, if you use trade dress to identify your products, set patterns of advertising then it is worth checking the protection that might be available.

Questions

• Have you a consistent Trade Dress policy as far as your marketing is concerned?
• If so, have you considered protection of this as distinct from names or logos? (example The shop front get up of Solver paint outlets)

7. Your goodwill

Background

Goodwill in its broadest sense is your reputation converted to a legal asset. It is the asset of your Trade marks, your recognition in the market place as a good performer and your abilities and your employees skills to provide product when and where and at a price that the market wants and so on. Ownership is a major problem.

Because goodwill is a legal asset it can be transferred by legal process such as contract. There are however some constraints to do with public interest of not having the public deceived.

Questions

• If your trading company is not the owner of its trade images then there may need to be an internal controlled relationship established to keep the rights protected. This not an academic question because for trademark registrations at least we have to have the registration ownership matching the ownership of the goodwill. If it does not then all of the value of the registrations may be lost and possibly the value of the goodwill will be severely prejudiced.
• If there are two or more companies forming a group, which company owns the goodwill?
• Can you check each Trade mark registration to establish if it is owned by the entity that effectively owns the goodwill? If not, do we have strong in house agreements to rectify this?
• Have you considered having all of the rights including goodwill owned by a separate non trading entity that licenses these back to the trading entity in order to protect these in the case of a trading failure?
• Have you isolated the distinctive icons that people recognise as identifying your goodwill? Have you considered additional protection eg the identity, reputation and appearance of the CEO, the location of each of the major sites, the overall efficiency experienced by customers when using your services, your promotional literature, the appearance of your building etc?
• Have you insurance covering protection for your goodwill.
• Have you assignments of copyright (check the general notes on copyright) in plans for your building from each and every author if this is one of the icons or signs?

8. All your Data

Background

Data is protected by laws of secrecy, copyright, and also through contracts with others such as subcontractors and employees.

Questions

• Are you aware of the different ownership rules applying as between subcontractors and employees for copyright?
• Have you agreements in place between yourselves and any supplier of services as to ownership of the material both in respect of copyright and the physical property of the documents?
• Have you signed assignments from subcontractors of their interest this would be both possession of the physical documents as well as copyright in the data? Your external accountant for instance is usually a contractor.
• What happens if your accountant refuses to hand back your books? (This happened to us with an accountant when challenged for fraud.)
• Have you an agreement with your service providers as to these matters?

9. Supplier contracts

Background

Unwitting possession of goods can bring you into a position of having to defend actions through absolutely no fault of your own.

Questions

• What happens if you take delivery of product then find these are alleged by a third party to be infringing a patent , are infringing a Trade Mark or copyright?
• Can you seek redress against the supplier before the court decides there is infringement (This could take a year or so)?
• How long is this likely to take and who is going to pay the costs? Would you simply expect to return the goods to your supplier? Do you have a contract that is bullet proof as far as:

1. your rights against the supplier as in an indemnity,
2. insurance covering this situation,
3. (The supplier has disappeared or gone bankrupt) Any third party.

• Does your contract cover any or all of the following:
  • What happens if you have paid for the goods and your supplier has become inaccessible!!
  • What happens if your supplier says the allegation is simply hot air and you should simply ignore the claim? Can you on sell the products etc?
  • Can you usefully sue the supplier?
  • Can you get an indemnity for any damage or loss of profit caused to you including legal costs, any award of damages or loss of profit, loss of reputation etc?

10. Software

Background

Misuse of software is endemic. It is being policed very strongly however, and like drink driving, you may not get caught very often but when you do it can hurt. The results can be a criminal action against the responsible directors. This can be of huge consequence from a public relations point of view let alone the disruption and possible penalties .

Questions

• Have you a positive program in place to inspect and monitor all software programs on your companies computers to ensure that all of your software in house is properly licensed from the original supplier?
• Do you have a senior executive review your asset register of programs, the license giving rights to the use of the program (possible extent of copies, backups, etc) when it was purchased, the receipt and the details of its original purchase. (One nasty case in South Australia involved a disgruntled employee who was responsible for managing software in the firm. Upon dismissal he laid a complaint with a major software company for the reward of some $15000 that the firm had infringing software (which he was in fact responsible for when an employee.))
• Illegal copying of software can result in the equipment (the computers) being seized. Have you a clear and published policy that employees are not to use computers for purposes of copying other programs; casual game copying is fairly common? If you choose to allow this do you have a system of oversight so that if there is a challenge you can show reasonable diligence in stopping illegal use of the equipment.
• Have you a program in place for regular education of your staff that no infringement of software will be allowed? (This can be a cultural thing where people have become accustomed to misusing software )

11. Employee agreements

Background

Ownership of any rights developed by an employee is governed by the rules of contract. If you have a draftsman whose job is to draw but not clearly to invent, then if that person contributes to an invention he may have personal separate ownership of the rights independent of the employee.

Questions

• Have you a clear and specific job description for each employee?
• Have you a mechanism to upgrade the job descriptions on a regular basis?
• Have you a specific confidentiality agreement with each employee?

12. Patents

Background

Effective patent protection requires ongoing monitoring of the specification and claims even after the patent has been granted.

Questions

• How do you rate your attitude to patent protection in each country of interest:

1. Defensive heart land
2. Defensive extended
3. Aggressive heart land
4. Aggressive extended

There are four categories of protection:

1 Defensive heart land
Protect with design registration rather than patent. Protect only for precise goods or services of interest eg narrow claims are acceptable. No active monitoring of the actions or registrations of others and no attempt to attack any use in associated areas.

2 Defensive extended
Actively file for patents with descriptions that are extended to ensure that they anticipate your areas of future interest. Monitoring of the actions or patents of others to ensure that infringement is avoided but no attempt to enforce our patents against others.

3 Aggressive heart land
Register for extended ranges of goods and services to anticipate future expansion. Register in associated areas of interest as defensive marks.
Maintain watching searches in respect of registration in heart land areas and enforce these including actively opposing registrations of others and threatening infringement as necessary but in restricted areas of main interest.

4 Aggressive extended
Patent as extensively as possible.
Maintain watching searches in respect of registration in all areas and enforce rights only these including actively opposing registrations of others and threatening infringement as necessary in all areas of possible interest.

• Have you a policy in place that encourages people to come forward with ideas?
• Would you share any money made from an idea with one of your inventor employees?
• Does your employee contract cover patents and other new ideas?
• Are all your staff aware of the need for secrecy and the importance of not commercialising an idea before patent applications are commenced?
• Do you monitor the patent applications and granted patents of others as they are published to ensure they are not being unfairly granted, to see what your opposition is doing and what might interfere with your ongoing developments?
• Do you use the world literature in patents to scout for new ideas?
• If you receive an infringement challenge-that is, you are alleged to be infringing the rights of someone else-do you have a policy in place as to how to handle this in 1 hr, 2 hrs, 1 day, a week or other?
• Have you patent insurance to protect your company from damages or loss of profit or payouts and legal costs in the event of the following:
  • You are infringing the rights of others
  • Others are infringing your own patents or other rights.

Maintaining your patents in best shape is a constant challenge.

• If prior art is discovered that is especially relevant do you reassess all existing patents or applications in all relevant countries both to reassess claims and claim scope and vary these as necessary?
• Reassessment in South Africa is especially of continuing importance because acceptance is automatic in this country and there is no examination?
• If you have missed out on filing in some countries using the initial priority rights do you maintain interest in countries that offer revalidation patents and patents of importation?
• Do you maintain an in time watch of accepted patents in countries of main interest to enable negotiation or, if necessary, opposition to granted patents that otherwise could interfere with your trade in that country?
• Marking policy. Some companies have a policy of never advising anyone of their rights so as to leave maximum surprise. Legally there is advantage in warning by putting some information such as patent number on the product. Have you a policy on this?

13. Customer contracts

Questions

• What happens if you supply services to a client which are infringing copyright? This could be a criminal offence! Eg you are an advertising agent and carelessly use someone else's artwork and supply artwork incorporating some of this work.
• Do you know how close or far away you have to be to avoid copyright infringement? Your customer is sued for infringement and a complaint is laid with the Commonwealth police.
• Can you show that you acted in good faith through the process?
• What happens if your client is facing criminal charges for this offence?

14 All of your Trade secrets - Confidentiality

Background

Confidential information is protected in most countries of the world. It is a protection that is not a created right such as with patents but it does require that the information has to be kept secret to maintain its value as a secret. However if someone breaks the secret then this can result in huge loss. This loss can in some cases be recovered by suing the person breaking the secret or the organisation.

Questions

• To save you from being challenged by others for misuse:
• Do you have a policy as to how possible secret information is handled?
• Have you an arrangement to handle uninvited correspondence so that you are not caught by a complaint of misuse of confidential information?
• Do you isolate and recognise your secret information by recipient, nature of secret, who is authorised to receive the information?

To assist in protection of your rights:

• Do you mark all drawings and other information as secret?
• Do you keep a list of secret information such as those who are responsible?

15. All your Drawings

Background

There is physical possession of the paper on which the drawings are made, there is secrecy of the material and there is copyright in the artistic and literary works.

Questions

• What happens if your drawings are for a new harvester? Someone measures your machine in the field and then proceeds to make machines somewhat like yours. Is this an infringement of copyright in the original drawings that the third party never saw?
• Are you firstly marking all your drawings claiming copyright and secrecy? Are you educating your staff as to what copyright and secrecy in a legal and practical sense mean?
• Copyright lasts for from 50 to 70 years after the death of the author and exists in every drawing. Do you make sure that you do not infringe the copyright of drawings that you have never seen if you are going to develop a product based on an existing product in the market?

16. The appearance of your major product

Background

It is now possible in some cases that the appearance of a product can be protected as a Trade Mark. Three dimensional trade marks can now be registered provided some rules are observed which will restrict the functional aspects from being monopolised. Such protection is different from registration of the design which must be filed while the design is still new.

Questions

• Have any of your products sufficient distinctiveness to qualify for Trade Mark protection?
• When you design a new product do you take into account the need to avoid the "appearance" of your competitors products regardless of registrations?

The above are just some of the questions that can get asked.

Howard Schulze
Collison and Co

August 1999

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