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Plain English Guide to Intellectual Property

Guide for Australian Businesses and Inventors looking to protect their great ideas
Alder IP
www.alderip.com.au 25 July 2012

Plain English Guide to Intellectual Property

Contents
Protecting Great Ideas ............................................................................................................................ 2 What is Intellectual Property? ............................................................................................................ 2 Types of IP ............................................................................................................................................... 3 Patents ................................................................................................................................................ 3 Protecting applications and concepts ............................................................................................. 3 Trade Secrets and Confidentiality ....................................................................................................... 6 Trade Marks ........................................................................................................................................ 7 Protecting Branding and Reputation .............................................................................................. 7 Registered Designs .............................................................................................................................. 9 Protecting the look of your product ............................................................................................... 9 Domain Names.................................................................................................................................. 10 Protecting online reputation......................................................................................................... 10 Copyright ........................................................................................................................................... 11 Circuit Layout Rights ......................................................................................................................... 12 Plant Breeders Rights ........................................................................................................................ 12 How to Protect Great Ideas .................................................................................................................. 13 Why Own and Register IP?................................................................................................................ 13 IP Commercialisation Strategies ....................................................................................................... 14 Further Information .............................................................................................................................. 15

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Plain English Guide to Intellectual Property


Protecting Great Ideas
What is Intellectual Property?
Intellectual Property (IP) is an intangible asset that represents a product of your mind or intellect. IP may include inventions, trade marks, designs or the application of a great idea. In relation to your business, IP represents the proprietary knowledge of your company or business and often generates a unique competitive advantage which will allow you to set your business apart from other traders. IP is becoming increasingly important to businesses as it allows for an asset to be generated from the intellectual effort that has been put into your business. IP generates tangible results for businesses by giving them a means to license, assign or use their rights to generate revenues. IP also encompasses copyright, trade secrets, confidential knowledge protection, plant breeders rights, and circuit layout rights. Businesses need to consider the opportunities made available by IP and form realistic strategies as to how IP can assist them to attain their business goals. Expert advisors are often helpful to formulate suitable strategies to protect and commercialise your businesss IP. This guide introduces the basic forms of IP and also introduces the simple strategies to maximise the value in your IP assets.

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Plain English Guide to Intellectual Property


Types of IP
Patents
Protecting applications and concepts

A granted Australian patent gives the owner the exclusive right to stop others from commercialising your invention in Australia. It effectively allows the owner to take legal action for unauthorised use of the invention in relation to manufacturing, importing or selling. A patent may also be used by your company to license (or authorise) someone else to commercialise your invention on terms that you have agreed with the other person. A patent is a legally enforceable right and forms part of effective asset strategies of most successful companies. Patent protection is not automatic and requires registration process with the Patent Office to be enforceable. To begin the patenting process, an application must be filed with the Australian Patent Office. If a complete patent application has been filed, an Examiner at the Patent Office will evaluate whether your invention meets to legal requirements for a patent to be granted. Specifically, the Examiner reviews your invention to confirm that it is new (novel) and inventive (not obvious) in light of information available at the time of filing. The Patent Office also reviews whether the subject of the patent application is suitable for registration as a patent. Patents may generally cover subject matter relating to any device, substance, method or process which is new, inventive and useful. Artistic creations, mathematical models, plans, schemes or other purely mental processes cannot generally be patented. However, a skilled patent attorney may be able to assist you in converting purely mental processes into a patentable device or system. It is important that you do not publicly disclose or sell your invention before you file a patent application (this may invalidate any subsequent patent as it will no longer be regarded as new). If a third party can show that you have used (for commercial interests), sold or disclosed your invention prior to filing the application, it may further invalidate your patent or patent application. You may talk to employees, business partners, advisors, patent attorneys about your invention but only on a confidential basis. Written confidentiality agreements are advisable and Alder IP can provide these agreements on request.

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Plain English Guide to Intellectual Property


Your patent application should describe broadly the characteristics of your invention and state the scope of your rights that you wish to claim. The application needs to describe the invention in sufficient detail as to allow a third party reading the application (who is skilled in your field) the capability of building or recreating the device or system. Because of this fact, careful drafting is the key to all successful patents/patent applications. You are strongly recommended to discuss your invention with a qualified patent attorney as soon as practicable to avoid possible problems with the patent application. Patenting also allows you to monitor and gather information on your competitors business activities and their inventions and research trends. There are numerous patent searching databases that can give you access to this information. Also they allow you to investigate the novelty and inventiveness of your own inventions. There is no such thing as a worldwide patent but rather your invention will need to be registered in each country which is relevant to your business. Most countries around the world have a patent system similar to Australias system. A general outline of the patenting process is shown in the below diagram. Please note that the patenting process should be tailored to your businesss needs and goals.

Australian Provisional Patent Application

Expires within 12 months and next stage application must be filed Preferably should be examined by Patent Office

Patent Cooperation Treaty (PCT) Application

Published 18 months from Provisional filing date Examined about 20 months Next Stage - National Phase at 30-31 months

National Phase Applications

enter national phase in each country examined under each country laws Granted and Registered in Country

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Patents typically last for about 20 years in each country from the original filing date (priority date). Please note that maintenance fees and renewal fees are payable on regular intervals in just about every country. Your patent attorney can assist you in monitoring these key deadlines and due-dates.

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Trade Secrets and Confidentiality
Trade secrets and confidentiality may provide effective protection for technologies that are not publicly disclosed or that are difficult to reverse engineer. However, trade secrets and confidentiality should be supported in writing with confidentiality agreements. Confidentiality agreements or non-disclosure agreements are often used to prevent employees or contractors from revealing or using your trade secrets or other proprietary knowledge. A correctly drafted agreement may limited disclosure or use even after the relationship with the employee or contractor has finished. A signed agreement will support any claim your business may make as duties of care on the receiving party (such as an employee or contractor). Relying on confidentiality is useful when the IP is unlikely to result in a registrable right or you wish to retain exclusive use beyond the term of a patent. A trade secret strategy is appropriate when its difficult to for your competitors reproduce the item, technology or process that you wish to protect. A significant drawback of confidentiality protection is that it does not prevent anyone else from inventing the same product or process independently and exploiting it commercially. Confidentiality does not grant you an exclusive right or monopoly. Your business is also vulnerable when the confidentiality agreements with employees or contractors expire and they are allowed to freely use the information that they acquired from your business. Trade secrets are harder to protect over longer time periods, especially if they have been disclosed to many people. Confidentiality is harder to enforce and protecting it is potentially more costly than registered rights (such as patents) because it relies on proving a breach of duty of care to your business. Breaches of confidentiality are processed under common law in Australia and courts are often reluctant to enforce confidential agreements, if the agreement would prevent an ex-employee or contractor from working in their chosen field. Best practice in the area of IP law usually requires all businesses to ensure that all contractors and employees have executed confidentiality agreements or clauses (in the case of employment contracts). It is usually a good idea to also include noncompete clauses in confidentiality agreements that prevent the contractor or employees from setting up a business in direct competition to your own business, after they leave. It is advisable to have a skilled legal advisor review your businesss confidentiality protection as part of a strategy review.

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Trade Marks
Protecting Branding and Reputation

The brand identity of your goods and services is probably one of the most important aspects of your business. Its worth protecting your investment in your business and the goodwill of the business by protecting trade marks. Trade marks are used to brand products and services serve as a badge of origin for these items. Trade marks may include: distinctive group of letters, numbers, a word, phrase, sound, scent, shape, logo picture, or any combination of these. Trade marks generally function as a sign that distinguishes your goods and services from that of other traders. This means you cant register a trade mark that directly describes your goods and services. You also can not register a word or phrase that is commonly used by other traders in the same field to describe their goods and services. It is difficult to register a geographic name or surname, except where someone has extensively used the trade mark for a considerable period of time and consumers generally recognise the distinctiveness of the trade mark. In Australia, trade marks may be unregistered or registered. Unregistered trade marks are protected under the common law and the Competition and Consumer Act (Cth 2010). The protection offered by unregistered trade mark is relatively weak and generally difficult to enforce. Whilst, you dont have to register your trade mark in order to use it. Registration is advisable, because it can be an expensive and time consuming exercise to take legal action under the common law. Please note that trade mark registration is different to the registration of company or business names. The registration of company name or business name does not give you the right to use the name nor does it give you rights to exclude others from using the name. You may register trade marks in Australia with the Australian Trade Mark Office (IP Australia). The Trade Marks Office examines new trade mark applications to check whether they met the legislative requirements for registration. In Australia, registered trade marks have an indefinite maximum lifespan and must be renewed every 10 years. Also the trade mark must be used in Australia within a specified time frame to avoid the trade mark being vulnerable to removal from the register for non-use. The following diagram demonstrates the typically application system for a trade mark application in Australia. Please note that other procedures are also available and you should discuss your specific business requirements with an appropriately trained legal advisor.

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Confirm goods and services Confirm how the TM is being used

Filing Trade Mark Application

Examination

The Trade Marks Office usually examines the TM within 18 weeks of filing They look for deceptively similar existing TMs Examine the distinctiveness of the TM

need to pay additional fee within 6 months


Accepted for Registration

TM is open to being opposed by members of the public for a short period


Opposition Period

Registration

TM is registered - Owner can take legal action against infringers TM needs to be renewed every 10 years

Its also highly recommended that you ask your legal advisor to conduct a search of the trade mark register before you start using a particular trade mark, business or company name to avoid infringement of other traders rights. You can access the Australian Trade Mark Register online at http://www.ipaustralia.gov.au Please note that trade mark protection in Australia does not grant rights in overseas jurisdictions. You should consider whether you would like to protect your trade mark application in overseas jurisdictions. Trade mark owners may file further trade mark applications in separate countries or file an international type application called a Madrid Protocol Application. Overseas applications filed within 6 months of the filing date of the original Australian Trade Mark Application may be backdated to the original Australian filing date (Priority Date) which will extend your overseas rights. A Madrid Protocol Application is a one single international application that gives your business rights whichever jurisdictions you decide. The prosecution costs and filing fees are generally minimised because the application is centrally managed by your Australian IP professional or yourself. Please note that you are required to have a pending or granted Australian Trade Mark to file a Madrid Protocol Application. The Madrid Protocol Application automatically lapses if the corresponding Australian Trade Mark lapses or expires.

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Registered Designs
Protecting the look of your product

A registered design may be used to protect the look or visual appearance of your businesss products. A registered design, which has been examined and certified, gives you a legally enforceable right to prevent others from copying the visual appearance of your businesss products. Registered design protection does not protect functional elements or the way the product works. If your product needs to protection for the functional aspects you are required to use patent law. Also, it is important to note that copyright to a product ceases when the product has been commercially manufactured. Registered Design protection is aimed to protect items that have aesthetic features that consumers like whilst being able to be manufactured on a commercial scale rather than bespoke or one-off products. To be registered as a registered design, your design must be new and distinctiveness. New means that the design has not been publicly used in Australia and has not been published anywhere in the world. distinctiveness of a design refers to the comparison of the present design with other existing similar existing designs in the public domain. The registered design process is intended to protect designs which have been industrially applied rather than artistic works (which automatically obtain copyright). Obtaining a registered design is a much simpler and cheaper process than obtaining patent protection, but the protection only covers the exact representation that is filed. In Australia, registered design applications generally include a set of technical line drawings with generally little or no written description. An IP professional or legal advisor will be able to assist you in filing a registered design application.

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Domain Names
Protecting online reputation

Domain names are the unique identifiers used on the Internet to designate the Internet Protocol addresses of individual computers connected to the Internet. Domain names make it easier for people to remember website or computer addresses without having to remember a long series of numbers. Domain names are a valuable commodity and readily tradeable. They are generally registered on a first come first served basis. The registrars of domain name do not always check or verify the validity of the domain name applications. Sometimes, applicants apply for domain names that they are not entitled to own and this is called cybersquatting. Please note that a domain name registration does not give you the right to use or stop others from using the same or similar name in the course of business. It is highly recommended that domain name applicants also apply for a trade mark (where possible and appropriate). In Australia, the management and oversight of the .au suffix domain names (including .com.au) is conducted by .au Domain Administration (auDA). auDA drafts policies relating to .au domain names. There are numerous other similar organisations around the world that manage the other domain names suffixes. Please note that each one of these administration bodies have slightly different rules and policies governing domain names. You need to review these rules before applying for a domain name. Under current auDA policy, the registrant of an .au domain name must meet certain eligibility criteria. These criteria may include: a demonstrated presence in Australia, the domain name applied for needs to be derived from their own name, or trade mark. Further information about eligibility criteria can be obtained from the auDA website. It is also important to note that domain names are generally subject to arbitration rules and you agree to these rules when you apply for a domain name. These rules allow for people or companies to file a complaint regarding ownership disputes of domain names. In Australia, an complaint can be made to a Domain Name Resolution Provider (such as LEADR) to reclaim an illegally obtained or cybersquatted domain name in the name of a third party. This complaint process is relatively cheap (application fee of $1000-2000) and quick (result usually within 1-2 months). Alder IP can advise your business or company in relation to domain names and domain name disputes. Please contact us for more information.

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Copyright
Copyright protects original artistic works in the forms of literature, music, performance, sound recordings, broadcasts, computer program code, art, and films. Copyright protects the owner from third parties making unauthorised copies of the work and certain other uses. In Australia, you are not required to register copyright. However, some overseas jurisdictions require you to register your copyright claim before you can commence legal action. Copyright material is automatically protected under the Copyright Act 1968 from the time the work first comes into being. Time limits for copyright protection vary according to the nature of the work. Works include literary, dramatic, artistic or musical works last 70 years from the date of the original authors death or from the date of first publication. Copyright gives the owner the exclusive right to license others to copy, perform, broadcast, publish or adapt the work. Many different forms of copyright may co-exist in a single work. For example, a movie includes a script, a performance, music etc. It is important to note that the Copyright Act provides for a number of exceptions to the rights for owners. These exceptions may include fair dealing provisions. Probably the most important limitation on copyright is that this form of IP only protects the expression of an idea and not the idea, itself. Copyright does not prevent reverse engineering, or rewriting a protected work. For further advice, we recommend you discuss your circumstances with an IP professional. Copyright may also be extinguished in works that have been industrially applied to an article. This generally means that a schematic drawing of a product (such as a chair, table or other product) loses copyright protection, once the downstream article is manufactured on a commercial scale. In these circumstances, businesses should look at protecting their products via design registration (in Australia) or design patent (in USA) rather than simply relying on copyright. Further, copyright in computer software generally protects only the code and not the output of the code. For protection of the functionality aspects of the code, businesses and companies should consider whether patent protection is more appropriate than copyright protection.

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Circuit Layout Rights
Circuit layout rights are a set of automatic rights designed to protect original electronic circuit layout designs for integrated circuits (ICs) or computer chips. This type of right is loosely based on copyright and lasts up to a maximum of 20 years. There is no formal registration process. It is important to note that these rights only protect hardware and software aspects of computer or computer control systems. The owner of a circuit layout right has the exclusive right to: copy the layout; make ICs incorporating the layout; or commercially exploit the layout in Australia.

Plant Breeders Rights


Planter Breeders rights are a set of legally enforceable rights that require registration. PBRs are generally used to protect new and unique plant varieties by giving the owner or applicant an exclusive right to commercialise the specific plant variety. PBRs generally last up to a maximum of 25 years for tree varieties and 20 years for other species. To be successfully granted a PBR, you need to demonstrate that your new plant variety is stable, uniform and new. It is important to note that PBRs do not extend to the use of the variety in plant breeding or retention by growers of seed for production of another crop on their land. Plant varieties made by recombinant DNA techniques may also be patented, if the process is new and inventive. Sometimes, breeders of new plant varieties may apply for both forms of IP. For further information, please contact Alder IP for specific advice regarding PBRs.

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How to Protect Great Ideas
The first step to protecting great ideas is to define the ideas and concepts that are critical to driving your business. You should attempt to protect ideas and concepts that give your business a definite commercial advantage from your competitors. Audit your own IP assets and proactively manage IP assets just as you would treat a tangible asset (like property or machinery). Register ideas and concepts relating to IP as early as possible.

Why Own and Register IP?


All businesses own IP but the secret is to realise the full potential of these assets and link them to the overall goals of your business. There are three main reasons why businesses register and own IP: a) Marketing Tool the most obvious advantage is that IP can be used as a marketing tool. Whether the IP is a trade mark that identifies your brand to customers; or a trade secret like the secret herbs and spices recipe of KFC. The marketing aspect of IP is one of the main reasons for registering and owning IP. Properly managed IP will always align with the goals and aims of your business. IP can be used as a tool to distinguish your business from your competitors in the marketplace. b) Promote Investment IP is a great tool for promoting investment in your business. Investors and Lending Organisations often require demonstrations that you are managing your business IP assets to maximum capacity. Investors often will require a business to be derisked, as much as possible, before they will invest. IP offers significant opportunities to remove risks for businesses and investors. For Example: investors prefer to invest in companies with a credible IP strategy and this usually includes patent registration and patent landscaping for most high tech industries. Granted patents often show clear delineation from competitors products. c) Trade Barriers Another reason to provide and maintain trade barriers to legally prevent the entry of new competitors in field and protect the operating field of your business. Patent holders are rewarded by the patent system for describing the invention with a limited monopoly for the new invention. This limited monopoly functions as a trade barrier for competitors.

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d) Bargaining Chips Patents and Registered forms of IP are increasingly being used as bargaining chips. Patents may be used as currency in cross licensing deals. Patents may give your business valuable bargaining power when it comes to negotiating with competitors or even contract suppliers in licensing or cross licensing situations.

IP Commercialisation Strategies
There are numerous commercialisation strategies for IP. The main factors that should be considered are: a) What type of protection is best suited to your business? an experienced IP professional can help you answer this question and provided you with a strategy that is the best fit for your business; b) Budgeting for IP costs IP registration can be expensive and your business should budget for future IP costs in your business plans. Your IP strategy needs to be reconciled against budgeted expenditure for your business; c) What countries should your business protect IP? This is a complex question and needs to be evaluated in light of your business model and your businesss industry. Alder IP usually recommends looking at the factors that affect your business in different countries and making a comparison of the cost and benefits of registering in each individual country. These factors may include: where are suppliers located; where are customers located; where are competitors located; and how enforceable is the IP right in each jurisdiction. d) Timing one of the critical factors to IP management and strategy is timing. Applications should be filed as soon as possible to reduce the likelihood of competing technologies being invented and filing by your competitors. Also timing of applications can be used to your advantage by spreading the IP costs over a longer period to reduce the impact on your businesss cash flow. This effect can make paying for the costs of IP registration easier as your business is likely to be selling more products or services in the future and real cost of cash for a start-up business is very high.

Alder IP commonly works with its clients to develop IP strategies that deliver significant advantages in terms maximising benefits and limiting costs. Please contact us to discuss how an IP strategy can assist your business.

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Further Information
This guide has been produced by Alder IP for use for businesses using IP. Please note that your unique circumstances may differ from the information set out in this guide. We recommend that before proceeding on any course of action in relation to IP that you seek specific expert advice. Please contact Alder IP for more information contact us on + 61-2-8005-0425 or visit our website at www.alderip.com.au . Please note that this guide has been written in respect of the laws and rules in Australia and may not be suitable for use in other jurisdictions. Alder IP and Protecting Great Ideas are trade marks of Alder IP. 2012, All Rights Reserved, Alder IP Pty Ltd

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