There has been a revolution in the commercial perception of intellectual property rights (IPRs) in recent years. In a knowledge–based economy, IPRs can easily outstrip other corporate assets in terms of value, a point which is not lost on branded goods manufacturers, merchandisers and technology–orientated businesses.
What are IPRs?
IPRs are a system of connected but inconsistent legal rights. They derive from intangible property created or resulting from the exercise of the intellect. Like land and fixed plant, they can be bought, sold and charged. Owners of IPRs enjoy permissible monopolies in particular brand names, literary or artistic creations, designs or inventions. These they can exploit on their own terms for potentially considerable financial advantage.
Many people are familiar with the principal kinds of IPRs – patents, trade marks and copyright. Recognised IPRs of other kinds include registered and unregistered designs, database rights, moral rights, semiconductor topographies and plant breeders' rights. Many authorities treat confidential information and technical know-how as intellectual property as well. Whatever your business, there are IPRs for you!
The Usefulness of IPRs
Owners of IPRs enjoy many advantages:
- They have rights which the courts will enforce against imitators and other unlawful competitors. This enables, say, a trade mark owner to build a brand or a patentee to put a potential invention on the market in a legally safe environment.
IPRs can reserve part of the market to the exclusive control of a particular IPR owner.
- IPRs can create a valuable revenue stream and establish new markets through the licensing to third parties of the right to commercialise them. It may, for example, be desirable to outsource the manufacture of a particular product to a foreign company having access to local markets and distributors. The merchandising of valuable trade marks and copyright works – TELETUBBIES and POKÉMON have been good examples – is a highly lucrative global industry.
IPRs can leverage new cash flows and business opportunities when it is the subject of tax efficient transfers within groups of companies, outright sale to third parties or is charged as collateral for loans.
The Costs and Obligations of Acquiring IPRs
This question is best considered in relation to the value of the relevant IPRs to your business generally rather than just in terms of pure costs. By way of example, software copyright is of fundamental importance to a software-writing author and should be enforced and defended at almost any cost. Likewise, the value of a near-universal trade mark such as COCA-COLA or VISA can be estimated in the billions, given the considerable goodwill which these brands attract. Although very few of the 96,000 trade mark applications filed last year in the United Kingdom will translate into valuable brands, for those that do, the eventual brand valuation will represent a considerable return on the initial investment of legal and filing fees.
The initial costs of obtaining IPRs vary greatly depending upon the rights in question.
Certain IPRs such as copyright are not registerable in the UK, but the time and any expense of establishing a date on which a copyright work came into existence is always justified. It is also worth investigating whether you can claim unregistered design rights in functional three-dimensional designs or database rights in compilations and arrangements of data.
Decorative designs (having "eye-appeal") on the other hand may be registered as designs on payment of renewal fees every four years to a maxi term of 25 years.
The cost of trade mark applications are not great. In addition to the initial fees, there may however be further costs incurred in the resolution of any inherent registration difficulties or if the application is opposed by a third party. What will vary initial costs the most is the number of internationally-recognised goods and services classes and the list of countries in which trade mark protection is required. Fees for the renewal of registered trade marks are payable every ten years.
Under the Community Trade Mark system, it is possible to make a single application for a trade mark in all 15 European Union member states simultaneously. This is considerably cheaper than filing 15 separate national applications.
The patent process is a little more complex. The costs of drafting a technical specification and developing it beyond the stage required for a provisional application may vary greatly. In the event that the patent is granted, renewal fees are paid annually throughout the 20 year term of the patent.
Actual fees and expenses for acquisition of IPRs will vary depending on the nature of the IPRs and the scope of protection sought. Estimates can always be given.
As well as being valuable as commercially-exploitable assets, when you consider that IPRs help to prevent competitors from using your technology or imitating your brands, the costs of acquiring and maintaining them can be very good value indeed!
