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Creativebias Helpsheet: Understanding Intellectual Property

November 2006 (Creativebias)

Understanding Intellectual Property

A Guide for Creative Industries Entrepreneurs


Many companies rely on the exploitation of intellectual property (IP) and the legal protection provided by intellectual property rights (IPR). This is particularly true for businesses within the creative industries.

This helpsheet provides an outline to help you understand what kinds of IP exist in your business and how best to protect it and exploit it for commercial gain.

Note: The area of Intellectual Property is complex and mistakes could potentially be very costly. Use the links given in this helpsheet to begin researching your needs and always seek advice from a qualified person regarding the Intellectual Property issues relevant to your business. Although every effort has been made to ensure the accuracy of the information contained within this helpsheet, the authors accept no liability for inaccuracies or omissions.



What is intellectual property?


The World Intellectual Property Organization (WIPO) defines intellectual property as creations of the mind. This includes artistic and literary works, images and inventions, names and designs. So if you write a song or a novel, paint a picture or take a photograph, you have created intellectual property. Clearly these creations could have a commercial value. A novel you write could, in principle, sell many copies all over the world. IP is an asset which can be owned in the same way as physical property. The owner can control its use and benefit financially, if it is protected and exploited effectively. IP can be bought and sold, or licences to use it issued.

For example, if you owned a sound recording you could license its use to a record company for a specified period of time or for an agreed percentage of the income generated from its release. Of course it is extremely important that you do not break the law and use other people's IP without permission.

"Your creativity is also your livelihood. Make sure you protect it from other people, and make sure you don't infringe anyone else's rights."


Tania M C Lewis - Creativebias Personal Business Adviser



How do you ensure that you benefit from your creativity?


This is the area of intellectual property rights (IPR). These are the rights that attach to intellectual property providing legal protection for the owner. As you will see, some rights attach automatically (such as copyright) whilst others require the registration of your IP before protection is provided. IP is divided into two categories:

  • Industrial Property, which includes things like trade marks and inventions, and
  • Copyright, which includes artistic and literary works.


We will look first at Industrial Property, which can be just as important for a business in the creative industries as Copyright.

For a detailed introduction to intellectual property visit the WIPO website at www.wipo.int/about-ip/en and download a copy of the WIPO Intellectual Property Handbook.



Trade marks and business names

Trade marks are a way of ensuring that your business can be easily recognised by both customers and other businesses, and so build your brand identity. They include logos, symbols, signs or words, or a combination of these.

So, for example, the image of a dog listening to a gramophone recording is a trade mark of HMV. Trade marks can be registered with the Patent Office, and it is sensible to check that any names or images you intend to use do not infringe any existing rights.

This can be done through the website www.ipo.gov.uk which is also a good source of detailed information relating to IP.

The cost of applying to have a trade mark registered in the UK is currently £200 for one class of goods or services and a further £50 for each additional class.

Even if you have already registered your company name with Companies House this does not guarantee that the Patent Office will accept that name as a trade mark. Your application may be turned down, for example, if your mark is deceptive or identical to earlier marks for the same or similar goods and services. Your application fee will not be refunded. Registered trade marks can be enforced through the courts, and you may find yourself in trouble if you use one that belongs to someone else.


The initial registration of a trade mark lasts for ten years, and can be renewed every ten years from then on. Trade marks do not need to be registered, and if you build up a good reputation associated with a particular mark you have some protection under the law. However, if someone begins to use your mark, and it is not registered, you will have to prove that their use has damaged your business and confused the public. This can be a costly and time-consuming process.

Even if you have not been able to trade mark your business name, you could be protected by the common-law principle of "passing off". Passing off can occur after you have built up a good reputation in your sector. If you then find that a competitor is using the same or similar name under which they are supplying similar goods or services you can take legal action on the basis that this competitor is deceiving the public by passing off their products or services as yours. If you believe this is happening to you it is important to seek expert legal advice.

The same is true if you find that someone else has registered your business name or registered trade mark as a domain name (i.e. a web address). This may be due to a rival wishing to pass off their goods as yours, or it could be a case of cyber squatting. This is a term which refers to the act of reserving a recognised internet domain name with the intention of selling it on to the trade mark owner at a higher price, a practice which is illegal. Of course, any duplication of names or trade marks could be entirely coincidental. Don't jump to conclusions but seek professional advice!


Patents


A patent is a form of protection granted to an inventor which gives the right to prevent others from making, using or selling the invention without the inventor's permission. However, a UK patent will only protect the inventor's rights in the UK. Patents are concerned with how things work and what they do. In order to be patentable an invention must:

  • Be new - It must not have been made public in any way. You may even need to ensure anyone with whom you discuss your invention signs a non-disclosure agreement
  • Contain an inventive step - Your development would not be seen as obvious to someone with a good knowledge of the subject
  • Be capable of industrial application - It can't be a theory or a discovery, it must take a practical form that can be used in some kind of industry

Applying for a patent can be complicated, and you would benefit from speaking to a registered patent agent. The UK Patent Office provides information packs and advice through their website and their enquiry line 0845 950 0505.


Design right and registered designs


It is possible to protect your designs and prevent other people using them.

Design right occurs when the article in question is 'fixed' in some way, perhaps as a drawing or when it is first made. It protects an article's design in the UK for up to 15 years. It is wise to keep records relating to the development of a design, such as schematics and prototypes.

Design right is automatic but, as with trade marks, having a registered design removes the need to prove that infringement has occurred, and so provides more protection. Registered designs relate to the outward shape or configuration of products, as well as patterns or ornamentation.

It is necessary to apply to the Patent Office if you wish to register a design, a process which will take a number of months. A patent agent will be able to help you with the process. If your application is successful your design will be protected for up to 25 years, and becomes an asset with the potential for sale or license to other businesses.


Copyright


Copyright provides the creators of material such as literature, art, music or films with the right to control its use, and potentially benefit financially.

Copyright owners must give their permission before material can be copied, or copies can be issued to the public. Their permission must also be given before a work can be performed in public, broadcast or used on-line.

Copyright owners also have moral rights. These include the right to be identified as the creator of the material, the ability to object to derogatory treatment of a work, and the right not to have work that you did not create falsely attributed to you.

Copyright exists automatically when material such as a poem or a song is fixed in a physical form, such as a manuscript or on a CD.

There is no system in the UK for registering copyright; it is the owner's legal responsibility to prove that they have copyright. A common and low cost approach is to place the material in question into an envelope, seal it, and send it to yourself by recorded delivery or registered post. Although this does not prove beyond doubt that you are the owner, it does indicate a point at which the material can be shown to have existed. It is also good practice to state on copies of the material that you own the copyright, and that unauthorised use is prohibited.

"Many global artists have been successfully sued by musicians who claim they have infringed their copyright."

Olu Olaseinde - Creativebias Personal Business Adviser


It is generally understood that the creator of copyright material is also its owner. However, if an employee creates IP during the course of their employment the rights will usually belong to the employer. It is worth ensuring that your employees are aware of this fact so that they do not infringe your copyright.

In the case of contractors such as photographers and website designers the copyright in the work they produce remains with them unless you specify in the contract that it must be assigned to you. According to the Copyright Designs and Patents Act 1988, a contract to assign a copyright must be made in writing.

Although the duration of copyright varies depending on the country of origin and the type of work involved, in the UK protection lasts for 70 years after the death of the author in the case of musical, dramatic, literary and artistic works. Copyright in films also lasts 70 years. This is calculated from the death of either the principal director, the authors of the screenplay and dialogue, or the composer of any music specially created for the film, whichever is the later. Copyright in a sound recording or broadcast lasts for 50 years.



Licensing of Copyright


If you are a promoter and you intend to stage a live music event, or a record label hoping to release copyright material, you will probably need a licence.

The organisations you must deal with are the Performing Right Society (PRS) and the Mechanical Copyright Protection Society (MCPS). For more information on which licence you will need, see www.mcps-prs-alliance.co.uk and click on the Music Users link.

More information can also be found in the MDA publications, Sources of income: A Sound Guide for songwriters and copyright owners and What about royalties?: A Sound Guide for musicians available from Creativebias. When dealing with music it is worth noting that separate rights exist in both the sound recording and in the song itself (the music and lyrics).

The Design and Artists Copyright Society (DACS) is the UK's copyright and collecting society for artists and visual creators. DACS provides licensing services to copyright consumers wishing to use artistic creations including photographs and fine art.

It is important to be aware that from January 2006 the Artist's Resale Right entitles artists and visual creators to payment not only on the initial sale of a work but also when a work is resold by a dealer, gallery or auction house. Further details can be found on the DACS website www.dacs.org.uk.



Performers' rights


In addition to the copyright owners, another group of people who have rights in relation to artistic material are performers, be they musicians or actors, and whether their performance is live or recorded. The nature of these rights depends on whether the performance is live or recorded, but usually you will have to seek the performer's permission to:

  • Record and/or broadcast a performance
  • Make copies of that recording, and sell, rent or otherwise distribute it in any format

The performer may be entitled to a fee in return for your use of the performance, regardless of whether the performer holds the copyright for the material performed. It is also worth remembering that, if a musician has signed a recording contract with a third party (e.g. a record label), the third party may also have rights. For example, it might be necessary to state that a particular performer "appears courtesy of" the record label in question.

You should seek and obtain permission from a performer before doing anything that might infringe performers' rights. So if, for example, you are staging a theatre production and intend to record it and sell copies of the recording to the public, you should ensure that the contract you agree with the performers gives you the right to do so.


Software


In order to use software on your computer it is usually necessary to agree to conditions specified by the software publisher (the owner of the copyright). This licence will usually prohibit making copies of the software and specify the number of computers on which it may be installed. Software is subject to the same legal protection as other forms of IP, and you must ensure that neither you nor your employees infringe the rights of the copyright owner. This includes making sure that free or reduced-rate software intended for personal or academic use is not used for your business.


Protecting your IP around the world


The information in this helpsheet relates primarily to IP protection in the UK. It may be that, due to the nature of your business, you do not require protection overseas. If you do, however, the matter can be quite complex.

  • Design right provides protection for only 3 years within the European Union.
  • Trade marks and patents issued in the UK offer no protection in foreign markets, and there is no simple or inexpensive way to secure worldwide protection. It may be necessary to make individual applications in each of the countries in which you require protection. Fortunately, there are conventions in place to make this easier within the EU. Contact a patent agent for further advice.
  • Although there are international copyright treaties in place, copyright is not respected in some countries, where sales of illegally duplicated product can exceed legitimate sales.


Links


www.ipr-helpdesk.org - Free service supporting creativity and innovation in Europe

www.ipo.gov.uk - Government backed Intellectual Property resource, and Patent Office

www.businesslink.gov.uk - Impartial business advice including detailed Intellectual Property information (Tel: 0845 600 9006)

www.wipo.int - The World Intellectual Property Organization

www.cipa.org.uk - The Chartered Institute of Patent Agents (Tel: 020 7405 9450)



© 2006 MDA Ltd

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