IP Lawyer: Why You Need to Audit Your Intellectual Property

Intellectual Property (IP) is a broad term that encompasses various rights such as copyright, circuit layouts, designs, patents, trademarks, domain names, business names, artistic works and more. These rights, which are assets of a business, often make up a large part of the value of the company and could help you launch a successful Series A funding and beyond.

Conducting a regular audit of your IP is crucial to understanding how you can protect those vital business assets. 

Each subset of IP rights will have their own protections and specific legislative regimes. Here are some of the most common IP rights you will likely be handling:

Business names

This refers to the name you are trading under — this could mean your app name, the name on your storefront, and your logo.

Business names are generally governed under the Corporations Act 2001 (Cth) and can be registered for protection. Unlike trademarks though, business names can be similar to each other because a unique ABN or ACN will typically accompany them on all documents.

That said, the degree of similarity will still be subject to general law protections (such as misleading and deceptive conduct or the tort of passing off) so you can’t set up a business called Faceb00k and get away with it!

Trademarks

Trademarks are registered under the Trade Marks Act 1995 (Cth) and administered by IP Australia. There are different classifications for trademarks and each classification needs to be nominated by you if your product applies to that class - for example, classifications 1 through 34 are for goods, and 35 through 45 are for services.

Before applying to register your trademark, you need to identify the appropriate class or classes for your product and make sure the mark is available for those classes.

Your application will be rejected:

• if the mark is already registered under that class, 
• your mark is similar to or may conflict with another registered mark, or
• the use of your mark would infringe on someone else’s rights.

Learn more about how to use trademarks for your startup!

Designs

Designs refer to the unique shape and appearance of original products and are governed by the Designs Act 2003 (Cth). Like trademarks, IP Australia administers a register of designs. Design rights can be registered for protection.

You can read our article on design rights and design registration to figure out whether design registration is worth it for your product.

Patents

To register a patent, the object of registration will require some novel aspect to it in order to qualify for patent protection. Patent applications look at how the product works or operates and examine its novelty and they are governed by law under the Patents Act 1990 (Cth). The patent register is administered by IP Australia and applications are highly technical and will require advice from a licensed Patent Attorney.

A new patent box scheme in Australia will come into effect on 1 July 2022. Businesses will be able to qualify for a concessional tax rate of 17% for income from Australian medical and biotech patents — the normal corporate income is taxed at 25-30%.

Here's everything to know about startup patents.

 Copyright

Generally, things with a written or drawn element - Software, code, websites, music, artwork - will qualify for Copyright protection and be governed by the Copyright Act 1968 (Cth).

The key element is that copyright protects the material form of the work (whether digital, electronic or physical), not the idea itself. The Copyright Act will protect all material forms regardless of file type — this means even cached or saved copies can be protected. Copyright may subsist in your website through the text, images, film (video and computer games), sounds (podcasts), music and source code!

Unlike the other types of IP discussed above, copyright is granted immediately on any material that is able to be copyrighted. This means you do not need to register to get copyright protection. However, it is also tricky to navigate. For example, copyright will likely not subsist in livestreams until they are recorded.  

Because there is no one register, there is a lot of grey area as to whether something is copyrighted or not and how that thing may be dealt with. Contracts will typically fill those grey areas in by assigning or licensing copyright or waiving any accompanying moral rights.

We have more on copyright for startups.

Confidential information and trade secrets

Confidential information and trade secrets are often the foundation of a business but they are not able to be registered for protection. This means that they are typically protected by contract and practical measures taken by the company. 

Typically, to qualify as a trade secret, the information must be commercially valuable, only known to a limited number of persons, and reasonable steps have been taken to keep it a secret.

Trade secrets are protected by the mere act of you keeping it a secret. Unlike other countries, Australia does not have any common law or statutory cause action specifically for the protection of trade secrets. Rather, causes of action for unauthorised acquisition of trade secrets are generally dealt with as a breach of confidence and breach of contract.

Founders will need to be proactive in protecting trade secrets either by putting up strict procedures on how the information is handled by employees and third parties, and by ensuring that contacts with confidentiality clauses are on foot.

Final Note

Once you have audited the IP you own, you can start planning and implementing your overall IP strategy. GoPro, Square and Zynga are just some of the many startups that grew exponentially thanks to their aggressive stance on Intellectual Property.

The key thing to note is that there is very little room for error with regards to IP. One simple mistake in your early stages can be very difficult to remedy later on. So be warned: if you fail to plan, plan to fail.

Biztech Lawyers

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