One of the most important steps a business owner can take with respect to its IP is to identify IP that it owns and uses. Even if there is no intention of selling the business it can be of great value to a business’ bottom line to have identified and recorded the value of all IP in the business.
The identification of IP by a business owner can often overlook important IP. Most people are aware of patents and copyright and the existence of trade marks in the context of brands but are otherwise unaware that there is other IP that has been generated by the business. Indeed they may be surrounded by their own IP, the value of which is unrealised or under realised.
The sorts of IP that is frequently overlooked include:
- Unregistered business names used as a trade mark – lots of businesses register their business name but fail to register it as a trade mark. Too often this results in others also adopting deceptively similar names when that could have been prevented through trade mark registration.
- Other unregistered trade marks – the types of trade marks that can be registered in Australia is broad including:
- Slogans and catch lines – eg “Oh what a feeling” for Toyota
- Logos and other graphical elements – indeed any graphical element including labels and packaging elements.
- Shapes of products – when people can recognise your product by its shape this may qualify you to a shape mark registration.
- Scents – the smell of a product, if not usually associated with a product (or service) can be registered if it has become distinctive of your goods or services.
- Sounds – Any jingle, musical score, audio clipping including vocals can be registered as a sound mark.
- Colours – any colour or combination of colours that has become distinctive of your product offering – eg black and yellow for financial services owned by the Commonwealth Bank.
- Novel product designs – novel products can be the subject of both registered designs (shapes) and patents (function). This may include products that have been released within the past 12 months that can take advantage of certain grace periods for making late applications.
- Confidential information – this is the aspect most often overlooked. Confidential information protection can be the subject of a sale or licence agreement and can include:
- Non-reverse engineerable manufacturing processes including the equipment used, the processes used to manufacture the product, the contents and components of a product;
- Confidential business processes in the offering of services;
- Customer and supplier lists
- Technological know how
- Future product designs and novel services
- Unpublished data that could later support patent applications
- Unpublished compilations or databases
- Unpublished manuals
- Marketing materials – IP resides in most aspects of marketing materials including photographs and accompanying text. This would apply to websites, brochures, flyers etc. Such information could be valuable for instance the layout and graphical elements of a popular website.
- Domain names, usernames and social media accounts. These can all be registered as trade marks but are also IP assets in their own right.
- Customised software, macros, custom electronic forms and systems – the code that underlies all of these computerised processes is protectable by copyright and in some very limited cases by patent.
- IP licences – whilst the licensed IP remains in the ownership of the licensor the licence agreement itself is an IP asset of the licensee business. A good IP licence can be a very valuable asset.
As can be seen, the sorts of IP that can be found in most businesses goes much further than traditional notions of patents, registered trade marks, registered designs and copyright. We recommend that a full IP Audit be conducted prior to any potential sale of business to fully identify all IP so that it can be reduced to writing in the form of IP schedules and valued to beef up the bottom line of the business.