Protecting Your IP + Business Know-How
Written by: Gabrielle Andersen | Canny Insight
Welcome to our Insight Close-Up series, where we delve into the most common commercial and business law services we offer our Canny Group business clients.
This series will focus on the following topics relevant to most business owners, and will be released monthly throughout this year:
- Service Agreements + Terms and Conditions.
- Independent Contractors and Subcontractors – What’s The Difference?
- Employees + Employment Agreements.
- Protecting Your IP + Business Know-How.
- Do I Need a Policy For That? What Exactly IS Compliance?
- Do We Need A Business Prenup?
- What Is The PPSR and How Can It Help My Business?
- Dealing With Disagreements With Customers.
If any of this sounds interesting, stay tuned as we’ll be letting you know when each Insight Close-Up instalment drops. For now, sit back and enjoy our fourth Insight Close-Up #4: Protecting Your IP and Business Know-How.
What Is Intellectual Property?
Intellectual Property or “IP” refers to your exclusive right to your creations of the mind – in other words, your ideas and innovations!
IP is often a central asset to your business and can form part of your brand – so protecting your IP can mean protecting your business too.
Some examples of business IP include:
- Business Names and Company Names;
- Trademarks, Copyright, Patents and Registered Designs;
- Information Technology Systems;
- Websites, including domain names, web hosting and website content; and
- Trade secrets, business know-how and confidential information.
How Can You Protect Intellectual Property In Australia?
In Australia, IP Australia administers the regulation of certain types of IP.
The following types of IP can be registered with IP Australia:
- Trademarks – A trademark is the mark or sign used in connection with goods and services. This can be a logo, a business name, or even just a word, phrase or shape that is an easily identifiable part of your business branding. A trademark becomes a valuable business asset through the use and marketing of that trademark, and registration of that trademark can be an important way to protect it as an asset of your business.
- Patents – Registration of a patent with IP Australia legally protects your invention or how something works. A patent can be in respect of new technology, devices, substances or processes.
- Design Rights – These legally protect the overall appearance of new and distinctive products. Some examples are the design of a dress, a car, or a piece of furniture. IP Australia explains that the protection of the appearance of a product may be based on a combination of shape, colour, configuration pattern and ornamentation.
- Plant Breeders Rights – These are specific protections for new varieties of plants.
How Do You Protect Copyright + Other Non-Registerable Forms of IP?
Copyright is another very common form of IP, however, in Australia there are no formalities for registering copyright.
A work is protected automatically from the time it is written down or recorded in some way, provided it has resulted from the creator’s unique skill and effort and is not copied from another work.
Similarly, circuit layout rights are free and automatic. They protect the layout designs or plans of integrated circuits used in computer-generated designs. The Commonwealth Attorney-General’s Department manages the Copyright Act 1968 (Cth) and Circuit Layouts Act 1989 (Cth), legislation that governs protections under Australian law for both forms of IP.
Copyright and circuit layout rights owners may exercise the exclusive rights in the work themselves, however, they also have the right to either assign or license their rights or prevent others from doing acts which may compromise their exclusive rights. While there is no need for registration of these rights, you can still protect these forms of IP through various agreements or license which can confirm your ownership of the IP and allow you to receive an income for others’ use of that IP.
What is Business Know-How + Is It Different From Trade-Secrets?
Business know-how is a term that is used to describe the confidential information that is key to your business’ products or services. It is often used interchangeably with the term “trade-secrets”, and both are considered subsets of a businesses confidential information.
On the one hand, the term “know-how” can often relate to knowledge about how to do something, or a particular business method you have developed. Trade-secrets, on the other hand, can be commercially valuable information specific to that business – such as a software source code, a product’s formulation, and algorithm, or even a particular material or tool you use which sets your product apart from others.
Both are types of confidential information that are crucial to the viability of a business and not something you would want competitors to know or be able to take from you. The biggest risks to your business know-how or trade-secrets can be employees, who will often know and use this valuable information on a daily basis.
The following list of confidential information shows the types of information known to employees or contractors of your business:
- Customer Lists;
- Trade Suppliers Lists;
- Identities of Employees or other Workers;
- Passwords and Safe Codes;
- Product Formulations;
- Software Source Codes;
- Manufacturing Processes;
- Unique Business Methods;
- Marketing Plans;
- A specific tool you have developed or found a new use for; or
- New inventions or processes you haven’t yet obtained a patent for.
The more people that know and use this information, the bigger the risk you have of losing or diluting these valuable business assets.
How Important Are Written Agreements in Protecting Your IP + Trade Secrets?
Whether or not you are able to formally register your IP with IP Australia, you should also ensure you have legal documents in place for protecting your business’ IP.
This can be in the form of written agreements confirming your rights to the IP. Some examples of these are:
- Ensuring your service agreements or written terms of agreement (or terms and conditions) contain clauses confirming your ownership of any IP;
- Ensuring any agreements you have with other businesses have adequate IP clauses, and also contain clauses regarding confidentiality and non-solicitation of employees, clients and business contacts;
- Having proper employment agreements or independent contractor agreements in place which confirm your businesses ownership of its IP – whether this be any registered trademarks or patents, copyright ownership, or confidential business information such as customer lists, financial information, trade supplier’s lists, passwords and codes, or actual trade-secrets and business know how. Your employment and contractor agreements can also include confidentiality and restraint clauses as a warning to others to not attempt to solicit your clients, other employees or your business contact lists;
- IP License Agreements can be another way to generate revenue for your business, by licensing your IP – such as patents, trademarks, trade-secrets or any copyright you own – to another business or organisation. These agreements confirm you are continuing to remain the owner of the IP, however, you are allowing others to utilise that IP in the manner and for the period of time specified in the agreement; and
- Similarly, IP can be sold entirely under an IP Assignment Agreement, another form of legal document that enables you to generate income from the IP you have created.
How Canny Insight Can Help Your Business!
Canny Insight is a customised legal service that meets the specific needs of your business. If you’re a start-up, or gearing up for growth and expansion, we’ll come up with a legal services package aimed specifically at your business needs.
Whether you need intellectual property protections in your agreements, advice on IP licenses or leases, or a review of your contracts with workers or other businesses, our business law focused Insight team will provide you with straightforward and reliable advice and contracts.
Get in touch with our team today to see how we can help your business!
The content of this article is for general guidance purposes only. Specialist legal advice relevant to your circumstances should be sought if required.