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Using Your Intellectual Property Assets to Combat the Recession

January 29th, 2011

A positive outlook and adaptability is key

In times such as these, companies need to do more with less and, therefore, it is essential for them to capitalise on all of their assets.

I am a firm believer that one of any company’s biggest assets is Intellectual Property (IP) – an asset that is often not very well utilised by companies, particularly small and medium-sized enterprises (SMEs).

Intellectual Property encompasses property and assets resulting from original creative thought such as patents, copyright material, designs and trade marks. Today, IP represents a staggering 90% of the total value of the world’s top 2000 companies. Be this as it may, less than 5% of innovations created in the United States are under licensing agreements, leaving billions of dollars worth of IP assets underutilised.

Globalisation and the growth of a knowledge economy have highlighted the importance of intellectual property rights, thereby putting the demand for effective IP management at the heart of all businesses.

Big multinationals regard IP as a strategic asset rather than merely a legal tool, and it follows that the most successful SMEs are also now seeing the need to manage, exploit and capitalise on their IP assets. This involves not merely protecting and administering the IP assets themselves, but also integrating IP into innovation, growth strategies and business models alike by using both the legal and economic functions of intellectual property.

IP management can be divided up into three task areas – innovation support, portfolio management and IP exploitation. Obviously, the exploitation of IP and related tasks has tax implications which must be addressed and optimised.

Tax implications

SMEs can use the same strategies that have already been employed for many years by multinational companies, which consist of localising their value-generating IP assets – such as brands, customer lists and patents – in low-tax jurisdictions.

If properly managed, locating or relocating assets offshore is a relatively simple process and can provide significant benefits.

Steps to take

When clients contact me regarding how best to adapt to the current economic climate, I look for ways for their companies to extract the maximum possible value from the business’s existing IP assets by leveraging those assets across their business models. We also work to identify opportunities for them to extract value from IP from outside their respective industry and support their efforts to find potential customers for their IP in unrelated business sectors.

The importance of protecting and registering trademarks, patents, designs and copyrights cannot be emphasised enough. Whether it be a trade mark registered with the Trade Marks and Designs Registration Office of the European Union (OHIM), with the Organisation Africaine de la Propri?t? Intellectuelle (OAPI) or with the US Department of Commerce, Patents and Trademark Office (USPTO), the protection and subsequent licensing of IP assets is key to any modern company’s survival and development.

I would encourage all of our clients and readers to analyse their own business to see if there are any undervalued existing IP assets that they could protect, sell and/or license from a tax-friendly jurisdiction. Jurisdictions such as Cyprus offer good solutions for precisely that purpose. No tax is withheld on royalties payable to a non-resident company when the right is granted to a Cyprus entity for use outside the Republic. Another solution would be to set up an appropriate Mauritius company.

Intellectual property rights play a crucial role in giving companies a lead in a market, and IP is definitely the business asset of the future.

Will companies be able to rise to challenge of turning knowledge into wealth? COBUS GROUP is here to ensure that you can!

I wish you all the best for a successful 2009.

PS: We shouldn’t forget that the hugely successful Microsoft was born during the recession of 1974; we saw the founding of Hewlett Packard during the Great Depression, and the genesis of the technology boom of the past decades began during the recession of the early 1980s – which just goes to show that every cloud has a silver lining and that business model restructuring during hard times really does pay off.

By: Felix Bagilishya

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Management of Intellectual Property – Finding Your Forgotten Business Asset

January 29th, 2011

For a service business it is particularly important to identify and manage Intellectual Property (IP). This article explains what IP is and how you can use it to benefit your business. Many people get confused about IP. In simple terms, Intellectual Property represents the property of your mind or intellect. In business terms, this also means your proprietary knowledge.

There are different types of IP, and a strategy should be developed to identify and protect relevant IP for your business.

The seven types of IP are:

1. Patents for new or improved products or processes.
2. Trade Marks for letters, words, phrases, sounds, smells, shapes, logos, pictures, aspects of packaging or a combination of these.
3. Designs for the shape or appearance of manufactured goods.
4. Copyright for original material in literary, artistic, dramatic or musical works, films, broadcasts, multimedia and computer programs.
5. Circuit layout rights for the three-dimensional configuration of electronic circuits in integrated circuit products or layout designs.
6. Plant breeder’s rights for new plant varieties.
7. Confidentiality/trade secrets including know-how and other confidential or proprietary information.

Copyright is Automatic

The only type of IP that applies automatically is Copyright. In Australia the Copyright Act provides rule on how Copyright applies. For example, with written works Copyright applies for 70 years from the year of the authors death.

Whilst in Australia you don’t need to include a copyright notice in your works, it can help to establish your rights in overseas countries and it may deter other people from using it incorrectly.

Trade Marks

A common IP issue for service businesses is the Trade Mark. The most obvious potential Trade Mark is the company name and logo.

For service businesses that rely on special services they have developed, or systems of delivering services (such as a proprietary training program or consultancy service), the name of the service may be suitable to be Trade Marked.

In this way the business can ensure the work they put into building a recognised name in their market does not get copied, abused, or stolen by another business.

Company and Business Names

Importantly it must be remembered that registering a company or business name does not give you ownership of the trade mark. The trade mark process is the source of IP ownership, not the business name registration process.

When you apply to register IP you will need to define exactly what it is you are protecting, select a class or multiple classes (categories) in which you want that protection to apply, and establish when you first starting using that IP.

This is where the services of an IP Laywer can be helpful. To ensure you get the protection you want from your IP it can be invaluable to engage an IP expert who knows the ‘inside’ of the IP approval process. There are often details that are easy to overlook that can have a dramatic impact on the protection you get from your IP.

Protecting your IP often comes down to having the correct procedures in place for sharing information. For example:

-Do you keep a register of your various types of IP?
-Do your employees have a non-disclosure clause as part of their employment contract?
-Do you have contractors sign confidentiality agreement when they are handling your sensitive information?
-Do you provide guidelines for how other parties can use your logo?
-Do you clearly mark your IP so others can recognise it.

Companies who develop something unique can benefit for many years if they can manage their IP correctly. Look at Coca Cola and KFC (Kentucky Fried Chicken), hiding their secret recipes for decades and maintaining their unique market position.

Microsoft and many other software companies have created various forms of IP such as copyright, trade marks, patented processes, and trade secrets. They often use licensing agreements to control how other parties use that IP.

Pay attention to identifying and protecting your IP to maximise your business success.

For further information on Intellectual Property in Australia visit the government website at IP Australia.

By: Stuart Ayling

About the Author:

Stuart Ayling runs Marketing Nous, an Australasian marketing consultancy that specialises in marketing for service businesses. He helps clients to improve their marketing tactics, attract more clients, and increase revenue. For additional marketing resources, including Stuart’s popular monthly newsletter, visit his web site at http://www.marketingnous.com.au

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Intellectual Property Law – European Trade Marks – Opposition to Registration of Trade Mark – Visual

January 26th, 2011

The case of Castellani SpA v Office for Harmonisation in the Internal Market (Trade Marks and Designs) (OHIM) (Case T-149/06) [2007], concerned an opposition of a European Community trade mark. On the 25th of September 2001, the applicant filed an application to register a Community Trade Mark. The application was made to the Office for Harmonisation in the Internal Market (Trade Marks and Designs) (OHIM), and was carried out under Council Regulation (EC) No 40/94 (on the Community Trade Mark).

The applicant sought registration for the figurative mark ‘CASTELLANI’. On the 4th of September 2002, a company called Markant filed a notice of opposition to registration of the trade mark on the grounds of a earlier registration. The company had registered the word ‘CASTELLUCA’.

The opposition referred to all the goods covered by the earlier registrations and was directed against all the goods in respect of which registration was sought – the likelihood of confusion on the part of the public due to the similarity between the earlier trade mark and the trade mark sought and the goods in question.

The Opposition Division of OHIM rejected the opposition in its entirety.

Once the mark was considered, it was decided that the trade mark applied for and the earlier mark were visually, as well as phonetically dissimilar. Furthermore, the relevant public would not perceive any conceptual similarity between the marks in dispute.

The opponent appealed against this decision to the Opposition Division. The First Board of Appeal of OHIM annulled this decision of the Opposition Division and rejected the application for registration, finding that there was a likelihood of confusion between the trade mark ‘CASTELLANI’ and the earlier trade mark ‘CASTELLUCA’. However, the applicant appealed, claiming that the Court of First Instance should annul the contested decision. The applicant alleged a single plea of infringement of Article 8(1)(b) of Regulation 40/94.

The Court held that when making an overall assessment of the marks at issue the visual, phonetic, and conceptual differences between the conflicting signs were sufficient, despite the identical nature of the goods covered, to preclude the resemblances between them giving rise to a likelihood of confusion on the part of the average German consumer.

If was decided that the likelihood of confusion had to be assessed globally. Such assessment had to be made according to the perception of the relevant public of the signs and the goods or services in question. Furthermore, the assessment had to take into account all factors relevant to the circumstances of the case, in particular, the interdependence of the similarity between the signs and between the goods and/or services designated.

The global assessment of the likelihood of confusion, as far as it concerned the visual, aural or conceptual similarity of the signs in question, had to be based on the overall impression given by the signs, taking into consideration their distinctive and dominant components.

In this case, the court found that it was clear that the figurative elements of the mark in question would be perceived as an illustration of a castle. In the overall visual assessment of the signs, the difference established between the word elements of ‘CASTELLANI’ and ‘CASTELLUCA’ was sufficient to rule out any visual similarity between the competing signs.

With regards to the phonetic comparison, the dissimilarities between the signs, due to the differences between the suffixes, were sufficient for them to be distinguished aurally in German despite the fact that the prefixes were the same.

With regards to the conceptual comparison, the court felt that the average German consumer was unlikely to associate the two marks in the same way as with the word ‘Kastell’, so that the competing signs were conceptually similar. However, the court also felt that the average German consumer was used to seeing a large number of trade marks for wine whose names had the prefix ‘castel’ which would mean that the average consumer would attach less significance to the prefix and closely examine the suffix.

Accordingly, the court decided that there was a conceptual difference between the two signs. As a result, the single plea raised by the applicant had to be upheld and the contested decision was annulled.

? RT COOPERS, 2007. This Briefing Note does not provide a comprehensive or complete statement of the law relating to the issues discussed nor does it constitute legal advice. It is intended only to highlight general issues. Specialist legal advice should always be sought in relation to particular circumstances.

By: Rosanna Cooper

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Intellectual property law, intellectual property licensing, intellectual property lawyers, intellectual property solicitors, IP law, IP lawyers, IP law firm, IP solicitors, copyright law, copyright, copyright infringement, Intellectual property infringement, copyright lawyers, copyright lawyer, copyright solicitors, copyright law firm, patent law, patents, patent lawyer, patent lawyers, patent solicitors, patent law firm, law, legal, law firm, lawyers, solicitors, solicitors in wapping, Solicitors in Docklands, Solicitors in E1, patent licensing, deposit copyright work, how to protect copyright work, copyright registration, trademark law, trademark searches, reademark licensing, trademark infringement, patent infringement, confidentiality agreements, know-how, registered designs, start up business, Internet law, website agreements, passing off.

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