Intellectual Property Considerations for New Ventures
It is undoubted that the recent “lockdown” measures that have been implemented by the UK government have placed significant financial pressures on businesses across all sectors. Despite such and in order to adapt during challenging and everchanging market conditions, over recent months, we have seen an increased number of small start-ups selling goods and services, most of which is taking place via online ecommerce platforms.
In the early stages of setting up their business, entrepreneurs are extremely busy and customer satisfaction would generally be the primary consideration. However, this initial start-up period is a crucial time for ensuring that intellectual property rights owned by third parties aren’t being infringed by the new business. Furthermore, if the business offers a unique product and/or service, this would also be the time to ensure that the intellectual property rights in that product and/or service are adequately protected. If such matters aren’t dealt with early on, a business could face legal action which could have a devastating impact on its future.
What Intellectual Property considerations should a start-up have?
Unregistered trade marks can be identified by including the ™ symbol next to the trade mark. Whilst this in itself does not provide any proprietary rights over the mark in question, in some instances it is possible for the owner of the unregistered trade mark to bring a passing off claim if it can be proven that competitors are taking unfair advantage of the goodwill and reputation built up in the goods or services provided under that unregistered trade mark. Further information regarding passing off claims can be found here.
Passing off claims are notoriously difficult to establish and costly for both parties. Therefore, a new start-up ought to always consider whether it is possible to protect their unique trading/brand names and logos via registration as a trade mark. Trade marks in the UK are governed by the Trade Marks Act 1994 (the “1994 Act”), and having in place a registered trade marks affords the owner an exclusive right to use that trade mark for the goods and services that it covers. This exclusive right may be infringed if a third party offers similar or identical goods/services under a similar or identical trade mark, with the 1994 Act setting out the remedies that will be available to the innocent party (including damages, an account for profits and also injunctive relief). Once registered trade mark status is obtained, the ® symbol can be used in order to indicate ownership and prevent any misuse.
When launching a new business, product or service, two questions must first be asked:
- Will the new business, product or service infringe any unregistered or registered trade mark?
- If not, is it possible to obtain protection for the new business, product or service under the 1994 Act?
Design rights protect the shape and configuration of objects and how parts of a design are arranged. Three-dimensional shapes are automatically protected via unregistered design rights for a fixed time period (in accordance with – and providing that such designs satisfy the requirements under – the Copyright, Designs and Patents Act 1988 (the “1988 Act”)). In order to succeed for an unregistered design infringement action, the rights-holder must be able to prove intentional copying on the part of the infringer.
On the other hand, designs may be registered (in accordance with the Registered Designs Act 1949, as amended). Owners of registered designs do not need to prove intentional copying when taking infringement action and rights can be enforced even where the third party did not know about the design, except where the use was for non-commercial, experimental, or teaching purposes. Again, the remedies available may include damages, an account for profits and injunctive relief.
Prior to launching any new product, businesses ought to be aware of the registered and unregistered design rights that may subsist in similar products that are already on the market, as this will avoid potentially costly infringement proceedings in due course.
Copyright protects inventions such as original writing and literary works, artistic works, films and music. Copyright in the UK is governed primarily by the 1988 Act and Copyright holders do not have to apply to register copyright or pay a fee; however, once a person or company has copyright protection in their original works, such works are often accompanied by the © symbol and the year of publish. Any third party that wishes to copy or use such work will require the owner’s permission. If such permission is not sought, the owner may take action to stop others exploiting their work and claim damages for the loss that has been caused.
Given the unregistered nature of copyright (and potential for overlap with, in particular, registered and unregistered designs), new start ups are advised to carry out extensive due diligence in order to ensure that any unintentional copying does not take place.
Patents in the UK are primarily governed by the Patents Act 1977 (as amended), and having in place a patent provides an inventor of a new product or process the right to prevent others from making and selling the same invention without permission for 20 years. When launching any new product, consideration needs to be given to whether such product will infringe any third-party patent; furthermore, if that product is novel and has not yet entered the market, specialist advise also ought to be sought as to whether it is possible to obtain a patent over that product.
The importance of taking Intellectual Property advice
Infringement of intellectual property owned by others can be costly, time consuming, damaging to a brand, and in some instances, is a criminal offence punishable by a fine or imprisonment, so it is advised to take proactive steps to avoid such taking place.
Before investing time, effort and money in developing a product, logo, brand name, or strap line, it is prudent to be aware of existing rights to ensure these won’t be infringed. Our intellectual property team at Forbes Solicitors are able to discuss your venture with you and carry out in-depth due diligence in order to advise you of potential risks with your venture and how to minimise such risks materialising.
Our intellectual property solicitors are also able to provide advice on how you may protect and exploit your intellectual property portfolio, for example by registering trade marks in the UK and other jurisdictions where your product or service may be offered for sale. Having appropriate registrations for your intellectual property not only prevents the likelihood of third parties copying goods and services, but also improves a business’ status as a reputable company and increases the value in that business.