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Busting IP Myths


“I don’t need to enforce my IP once I have it”
False. Obtaining an intellectual property right is only the beginning of creating an effective IP strategy. Your business should have a clear idea of the goals you intend to achieve by building an IP portfolio you can commercialise as opposed to merely having a collection of intellectual property rights on the shelf. Moreover, the registration of trademarks and the obtaining of a patent for example require significant resources and time, which should be recuperated in financial gain afterwards, e.g. by means of licensing, exploitation, assignment, etc. Official protection or registration by itself will not deter committed and even ignorant infringers.

“I automatically own a work I have commissioned.”
False. In the absence of an express written assignment, the default position is that the contractor owns the IP. It is true that use under an exclusive licence may be inferred and a court may order transfer, but this is not automatic and will depend upon the circumstances. Therefore, it is essential to have an effective consultancy agreement between you and freelancers to ensure the IP in the end product belongs to you. This can become especially relevant in due diligence exercises when someone is assessing your business and you need to give warranties about ownership. Uncertainty over the ownership of business critical IP can have a significant impact on the price that a prospective acquirer is prepared to pay or may deter investment.

“An invention made by my employee belongs to me.”
True. Under section 39 of the Patents Act 1977, generally any invention by your employee, made in the course of their employment and usual duties, belong to you as an employer. Bear in mind that such a situation is very much facts-based, and that your employee might be entitled to compensation if their invention made a significant difference to the business. However, the threshold for such a contribution is high.

“I need to register my copyright.”
False. Copyright arises automatically as and when a work is created. It requires no formal registration and can only be transferred to another party in writing. You could add © to show potential infringers that you know your rights, but the sign itself makes no legal difference.

“A registered trademark in the UK is valid globally.”
False. Trademarks are territorial rights and only protect your brand in the countries where you have registered them – thus, they can be national, Community (European), in addition to other options which can make the protection of your business more international. A trademark registered in the UK will hence not enjoy any protection in Germany unless you have completed further registrations. Get in touch to discuss your options.

“™ signifies a registered trademark.”
False. The sign for a registered trademark is ®; ™ stands for unregistered trademark. You can only use the former if you have gone through the process of registration and there is no obligation on you to use the latter. You can add ™ if you would like to show that you are treating your product as a trademark.

“I run only a small business and don’t need to register as a data controller.”
False. See our piece on why you must register with the ICO if you process any personal data regardless of the size of your organisation.

“I can add a restrictive covenant to my employment contracts, so that when an employee leaves with certain knowledge and skills I don’t enable competitors.”
The answer to this depends on the exact wording of such a clause. There is certain methodology, “know how” and skills which your leaving employee will have learnt while on the job – you cannot restrict them completely from using it in the new work place. This would constitute restriction of labour and a clause upholding it is unlikely to stand in court, especially if you have restricted them for more than six months. However, you can remind your leaving employee of the duties they owe you after they move on, also depending on the industry you operate in and what their employment contract says. Please contact us to discuss NDAs or other ways you can protect your trade secrets.

The information presented is not legal advice, is not to be acted on as such, may not be current and is subject to change without notice. Internet subscribers and online readers should not act upon this information without seeking professional counsel.