Recognise the importance of intellectual property to your business and protect it

Past surveys by the Intellectual Property Office and Federation of Small Businesses have revealed that 74% of businesses were unsure who owned the intellectual property rights (IPR) to their website, logo, artworks and photos, that 30% of businesses in the UK who own some form of IPR are reliant on it for 75-100% of their revenue, and that 25% had suffered some form of infringement in the last 5 years.

Clearly, businesses need to take greater care to identify and protect their intellectual property.

Broadly, when it comes to copyright, design rights, and patents, the creator (whether it be a designer or inventor) will be the owner, unless created by an employee in the course of employment, subject to any agreement to the contrary.

Whether someone is acting as an employee is not always clear and if challenged it can be a matter of factual assessment. Businesses should ensure that they have employment contracts in place to help establish the status of the creator of any IP, and that existing employment contracts include clauses relating to IP ownership.

‘Catch all’ clauses like those saying all IP will vest in the employer may not be enforceable, but a more even-handed set which state that IP created in the course of employment will belong to the employer are likely to stand up if tested.

If you outsource to an independent contractor (such as an agency to design your logo) they may own any IP they create, subject to an agreement to the contrary. Therefore, ensure that agreements with external agencies state that any IP in work carried out on your behalf will belong to you. Businesses do not want to find out at a later date that they have paid a contractor to develop IP which the contractor can then take to competitors.

Paul Gordon is a litigation partner who specialises in intellectual property disputes. He believes that many of these can be avoided if businesses recognise the importance of their IP and take early steps to ensure that they own it. In doing so they will find it easier to protect their intellectual property rights from infringement.