Leveraging Your Intellectual Property

Leveraging Your Intellectual Property

One of the most burning legal questions all founders and business owners have is how to protect their intellectual property, and rightfully so. In this article, we are going to explain how you can do that, and, on top, how you can monetize your intellectual property for multiple revenue streams and profit generation.

But first, what is “Intellectual Property”?

Intellectual property (IP) refers to creations of the human mind, such as inventions, designs, literary and artistic works, symbols, slogans, names and images used in commerce, all of which are recognized in law as property, and can be owned by the creator or author, provided that certain specific conditions prescribed by law are met.

By their nature, these creations are intangible: we cannot touch, hold or always see the creations, but rather their expression onto a fixed, material, tangible medium.

Protecting and enforcing IP globally is a challenge for businesses because of their intangibility, which makes it difficult to track how they are used, once they’ve been shared publicly, but also because of the global, complex legal framework: international, european, and national laws become all relevant in this global context, due to the territoriality of the legal protection afforded by law, the cross-border legal aspects, and to the different interpretations and applications courts give to applicable laws in this area.

This article deals with the current European legal system for the protection of IP, as follows:

  1. Why intellectual property protection is important to your business?
  2. Types of intellectual property protected in Europe
  3. Effective tools available for IP protection
  4. When should you protect IP?
  5. The new approach: Monetization & Revenue Generation
  1. Why IP protection is important to your business?

Protecting your IP means your business is the real deal.

It builds trust & loyalty – your IP is what specifically distinguishes you from your competition in the market, by creating trust & loyalty with your customers or clients. 

Protecting your IP provides a major competitive advantage, by creating a natural economic monopoly in the market: your exclusive IP rights prevent others from commercialising or otherwise exploiting the same or similar IP in your market. You can therefore enforce your IP by taking legal action against anyone using your IP without your consent, by counterfeiting or fraud.

Monetization & Revenue Generation – by exploiting your IP you are able to generate revenue streams in your business (the possibilities are multiple) that increase margins, that lead to profits & growth.

Innovation – your IP is not fixed, but rather an ever-growing & developing arm of your business, where you constantly get to research, invest, innovate in order to better address your customers’ needs and stay ahead of the curve.

Attracting Investments – your IP is an essential reassurance for investors, who will not only require you to present the up-to-date status of all IP in your business, but also how you plan to develop it and constantly innovate.

You and your team may have a lot of great ideas, but at the end of the day, only those that are commercially viable and legally protected will matter.

There is also potentially a wide range of information in your company or business, that has commercial or economic value due to its confidential information and so, you want to protect it so that you have control over who, when & how exploits it.

2. Types of IP in Europe

  1. European Trademark

A European Union trade mark (EUTM) grants you exclusive rights in all current and future Member States through a single registration, filed online.

It is valid for 10 years and can be renewed indefinitely, for subsequent periods of 10 years. However, the law establishes that an EU trade mark must be put to genuine use in the European Union in the five years following its registration. If you don’t use it, third parties can challenge your trade mark for non-use. 

Your trade mark could also be cancelled if, because of the use you make of it, it becomes the common name for a good or service, or if it becomes misleading as to the nature, quality or geographical origin of the goods and services for which it is registered.

An EU trade mark can consist of any signs, in particular words (including personal names), including when grouped as slogans, or designs, letters, numerals, colours, the shape of goods, or of the packaging of goods or sounds.

B. Geographical Indications & Appellations of Origin

If your product has a specific geographical origin and a reputation – a given quality or other characteristics of a product essentially attributable to it – you can protect it with a geographical indication (GI).

Geographical indications protect:

  • agricultural products and foodstuffs
  • spirit drinks
  • wines
  • aromatised wines

Geographical indications protect your products against misuse or imitation of the registered name and guarantee the true origin of the product to your customers. These rules ensure you and all producers in the given geographical area have collective rights over the product, as long as certain requirements are met.

Under EU quality schemes, the names of products for which an intrinsic link exists between product qualities or characteristics and geographical origin are protected. There are:

  • Protected designations of origin (PDO) for agricultural products and foodstuffs, and wines
  • Protected geographical indications (PGI) for agricultural products and foodstuffs and wines
  • Geographical indications (GI) for spirit drinks and aromatised wines

C. European Design

A registered EU design (Registered Community Design or RCD) grants you exclusive rights in all EU Member States and is valid for a 5 year term, which is renewable up to 25 years.

An design constitutes the ornamental or aesthetic aspect of an article. A design may consist of three-dimensional features, such as the shape or surface of an article, or of two-dimensional features, such as patterns, lines or color.

A design protects the appearance of either the whole product or a part of it, that results from its features, in particular, the lines, contours, colours, shape, texture and/or materials of the product itself and/or its ornamentation.

The representation of your design is the most important part of the application. It defines the scope of protection. A design protects only the appearance of a product and not its function.

Your design must be novel and have individual character. This means it must be new and differ from the overall impression produced by previous designs.

D. Domain names

Domain names in and of themselves do not constitute separate, distinct intellectual property rights, but rather they identify a business’ website address and by acquiring a domain name through a domain name registrar, you are not “purchasing” the domain name in and of itself, but rather you are acquiring the right to use that specific domain name.

The Internet Corporation for Assigned Names and Numbers (ICANN) is responsible for technical management of the domain name system.

Domain names do have important business identifiers, because customers use them to find and review businesses and their products/offerings over the internet.

While no legal system for registration currently regulates the use of domain names, the Uniform Domain Name Dispute Resolution Policy has been designed by the World Intellectual Property Organization to address the bad faith registration and use of domain names, and globally, WIPO is the leading service provider accredited by ICANN to resolve domain name disputes.

To challenge a domain name registration, you must, in most cases, have a prior right to the domain name (e.g. trademark, trade name, company name, family name, etc.) and must show that the current domain name holder has registered it or uses it in bad faith, for speculative or abusive purposes.

E. European Patent

A patent is an exclusive right granted for an invention. Generally speaking, a patent provides the patent owner with the right to decide how – or whether – the invention can be used by others. In exchange for this right, the patent owner makes technical information about the invention publicly available in the published patent document.

European patents are granted for any inventions, in all fields of technology, provided that they are new, involve an inventive step and are susceptible of industrial application. Novelty is considered in relation to the current state of the art, which comprises everything made available to the public by means of a written or oral description, by use or in any other way, before the date of filling of the European patent application.

The European Patent Convention was established as a single system of law, common to the Contracting States, for the grant of patents for invention. The European Patent has the effect of and is subject to the same conditions as a national patent, in the respective Contracting State, and may be requested for one or more of the Contracting States.

F. Copyright

Copyright is a legal term used to describe the rights that creators have over their literary and artistic works. Works covered by copyright range from books, music, paintings, sculpture and films, to computer programs, databases, advertisements, maps and technical drawings.

In EU countries, copyright protects your intellectual property until 70 years after your death or 70 years after the death of the last surviving author in the case of a work of joint authorship.

Outside of the EU, in any country which signed the Berne Convention, the duration of copyright protection can vary but it lasts until at least 50 years after the author’s death.

Copyright protection grants you the following exclusive rights:

  • economic rights – guaranteeing you have control over your work and remuneration for its use through selling or licensing
  • moral rights – usually protecting your rights to claim authorship (right of attribution) and to refuse a modification of your work (right of integrity)
  • Trade secrets and know-how

Trade secrets are IP rights on confidential information which may be sold or licensed.

Trade secrets can include a vast amount of information and know-how that is not protectable or cannot be protected properly through patents or other registrable IP rights, such as:

  • early-stage inventions
  • manufacturing processes
  • lists of suppliers and clients

if the following conditions are met:

  • the information is not known either by the public at large or by the experts of the sector in question
  • the information has commercial value
  • you have taken steps to keep the information secret.

Information protected by trade secrets can be strategic for the long-term, like recipes, formulas or chemical compounds, or for shorter periods, such as the results of a marketing study, a brand name, price and date of launching of a new product or the price offered in a bidding procedure, a business strategy.

The unauthorized acquisition, use or disclosure of such secret information in a manner contrary to honest commercial practices by others is regarded as an unfair practice and a violation of the trade secret protection.

In situations of dishonest behaviour, you are entitled to damages and other legal remedies. For example, a court order can prohibit the use or further disclosure of the trade secret by the person who had acquired, used or disclosed it unlawfully.

3. Tools available for IP protection

  1. Legal tools
    • Registration – national vs. europe-wide? you can apply for registration at national level, and take a country-by-country approach, however the european IP legal framework currently allows you to register your IP and accomodates Europe-wide expansion plans.
    • NDAs – Confidentiality and non-disclosure agreements must be signed prior to divulging sensitive commercial information.
    • Legal notices – including legal notices in all your public assets (websites, staff policies, social media) is an essential method of legal protection.
    • Signed Contracts – all agreements with customers or clients, business partners must contain intellectual property, confidentiality clauses, with specific terms and wording for effective legal protection.

B. Practical

  • Watermarks – for images
  • “TM”, “R” symbols for registered trademarks
  • If you create literary, scientific and artistic work (including software, artificial intelligence, or other technology tools), you automatically have copyright protection, which starts from the moment you create your work, so you don’t need to go through any formal registration process. However, you need to advise other people that you are the author of that work. You can attach a copyright notice to your work – such as the “all rights reserved” text, the © symbol – together with the year the work was created.
  • You can also register your copyright via a dedicated service provider, which can be useful to prove the existence of your work at a certain point in time.
  • Use encryptions and technology to secure access to your IP.
  • Use a collective management of copyright & related rights organization.

4. When should you protect your IP?

Where your IP rights are registerable, the sooner you apply for registration, the better, because legal protection is available on a first-come, first-served basis (and priority can be claimed only under the strict conditions provided for in European laws), but also because IP is territorial in scope within the Europe.

In any case, and when in doubt, the rule of thumb is to protect your IP, through registration and/or other legal means available (use a combination of the tools in section 3 above, as appropriate), prior to making it publicly available (where “public” includes anyone besides the author/creator/s obtaining access to it through any means).

5. A new approach: Monetization & Revenue Generation

A well-crafted intellectual property strategy can help maximize the potential of your business. Using and understanding your IP rights, you can:

  • secure competitive advantage
  • generate revenue streams
  • reduce tax liability
  • serve as a source of competitive intelligence
  • facilitate access to financing
  • attract investors and partners
  • avoid and mitigate relevant risks

IP constitute important assets that you can put to strategic use in your business either by directly integrating the IP into your production or service offering, and marketing it, or by creating additional revenue streams, and increasing your overall company value.

Here are a few examples of how you can achieve that:

  • licensing
  • assignment (sale of IP)
  • access to finance/fundraising
  • securitization & collateralization
  • increase company valuation
  • attract partners & collaborators
  • create strategic partnerships & alliances

If you are committed to become a market leader and want to powerfully create your IP strategy book a discovery call.

Leave a Comment

Your email address will not be published. Required fields are marked *