What is intellectual property in Australia?

When operating a business, particularly in this digital age, intellectual property (IP) remains a crucial element that should be understood and appreciated. This is because IP is what distinguishes your version of a business from that of your competitors.

What is intellectual property?

IP is an asset, first and foremost. You can buy it, sell it, build it and destroy it. Unlike the company car or furniture however, you can’t touch it. In this way, it’s known as an intangible asset.

There is no conclusive definition of what IP is. The common characteristics tend to be:

• intangible value; and
• independent intellectual effort.

Some simple examples include:

• your logo, business name and anything else you use to distinguish your business;
• your standard operating procedures; or

the content of your product designs. Further below we explain what category of IP these examples fall into.

Why intellectual property is important?

When developing a strategy for your business, it is important to think about:

• which part of your business involves or relies upon intellectual property;
• how to protect your intellectual property; and
• how to maximise your intellectual property to give you the best outcome.

What common forms of intellectual property should you look out for?

The commonly recognised categories of IP are:

Trade Marks (aka Trademarks)

A ‘trade mark’ is exactly that, a mark, i.e. a sign, that represents your trade, i.e. your business. It is the concept that recognises your distinct branding used to distinguish your goods or services from those of another. [1]

In Australia, you can register a trade mark with the government department called “IP Australia”, which is the authority vested with powers under the Trade Marks Act 1995 (Cth). While registration is not necessary to claim rights over your brand, it certainly helps and ensures your brand’s protection is available for all to see and much easier to enforce if someone tries to misuse it.

For example, while one shoe manufacturer might have a tick shaped logo on its product, another might have three stripes down the side. Both are shoes but their respective logos and business names are their trade marks, and by those trade marks, customers can differentiate their product from that of their competitors.

Copyright

Copyright is a legal right, that cannot be registered in any database unlike trade marks but is able to be protected.

Generally, copyright arises automatically for: [2]

• works (including literary, dramatical, musical and artistic works); and
• other subject matters (including film, sound recording, broadcast or published editions).

For example, if you are the author of a published book, copyright of the literary work within that book almost always arises.

While our shoe example doesn’t really fit this category, if our ‘ticky’ manufacturer wanted to put out a guide on the best running style to use for their shoe, they could potentially claim copyright over the content of that guide. If ‘stripey’ copied the content of the guide and just put their logo on it, Mr Ticky could sue Mr Stripey for breach of copyright.

Patents

A patent is a legal right to a patentable invention that is disclosed to the public. Generally, for a patent to be obtained for a manufactured product or idea, the product or idea:[3]

• should be a ‘manner of manufacture’, that is, something that provides a material advantage in a field of economic endeavour;
• be novel;
• involve an inventive step;
• useful; and
• not be secretly used.

Registration of a patent is a complex process and, in Australia, can provide protection for between 8 and 25 years depending on the type of patent.

Carrying on the shoe analogy, the shoe is a concept that has been in vogue for thousands of years. As technology has improved, so have the shoes. Therefore it is unlikely an entire shoe is able to be patented, but parts of the shoe, such as the material used in the sole to create more traction with the ground, or the particular weave of the fabric, might be patentable if it is sufficiently inventive and novel. Mr Ticky secured 867 patents in 2018 alone.

If you think you have a patentable product or idea, you should be very careful with whom you share it and what obligations they have to you when they do. If you don’t have the right protections in place and someone else decides to copy your work, there’s little you can do.

Confidential Information

Confidential information is another category of IP that cannot be registered but is recognised at law. It also encompasses some of the other forms of IP, such as the details of a patent application are inherently confidential.

Generally, information takes a confidential character when: [4]

• the information has the necessary quality of confidence;
• the circumstances surrounding the information creates a duty of confidence; and
• the person who acquires that information.

Mr Ticky and Mr Stripey would both have significant confidential information in their business. While the name of their new shoe might not be confidential once launched, up until that point it absolutely would be. An employee that obtains that information would be obliged to keep it ‘confidential’ until authorised otherwise.

Therefore, part of your business planning should involve making sure any employees are aware of their confidentiality obligations to the business.

What you should also consider?

In addition to the above most prominent examples, you can register a design for a product packaging and for a new type of plant bred by you. There are also rights known as moral rights arising for those that created the intellectual property, whether it’s owned officially by them or not.

So now that you know IP is more than just a catchphrase used by smart people to describe their ideas, and that you have your own, what should you do?

When planning a new business, have a think about which part/s of your business might be considered intellectual property. If you have any doubts, research, and consider whether seeking legal advice is necessary to help you organise, plan and position your business’s intellectual assets.

Obtain advice as to an appropriate business structure that will protect your IP assets from the risks of trading.

If you’re buying someone else’s business, you should make sure you’re buying as many of their IP assets as possible and ensuring they commit not to use that IP moving forward.

How can DSA Law help?

If you have a commercial or intellectual property enquiry, please Contact Us via our Website or Call us on (03) 8595 9580 and one of our team will be able to assist you.

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[1] Trade Marks Act 1995 (Cth) s 17.

[2] Copyright Act 1968 (Cth) s 10.

[3] Patents Act 1990 (Cth) s 18.

[4] Coco. V A.N.Clark (Engineers) Ltd [1969] R.P.C 41

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