You’d think it would be fairly clear what is and what isn’t your intellectual property, by the copyrights and patent papers you keep in your virtual vault. But recent high profile spats have reminded us that there’s a substantial grey area businesses need to navigate, especially when an idea or design is borne from collaboration, or in a customer-supplier relationship.
In this piece, Acuity Law’s Cordelia Payne explains what you need to know to safeguard your assets, by way of George Lucas’s Stormtrooper helmets.
Many IP rights in the UK subsist and accrue to a person or entity automatically. These rights are the likes of copyright, unregistered trade mark rights (business goodwill), unregistered design rights and database rights. Given that nothing is required in order to create these rights, businesses may readily assume that they have them and give them no further thought… until someone copies them.
Quirks of copyright law are such that if you commission someone to build a website for you, create some company software or design your brand and for which you pay them good money, this does not necessarily mean that you own the copyright in these works. You still need to have an express assignment or licence from the person or entity that created the work.
For similar reasons, engaging consultants or contractors to work for you on a particular project, especially a creative one, is another risk area when it comes to ownership of the IP rights. It is only employees, in the strict legal meaning of the word, whose rights created in the course of employment will automatically accrue to their employer. Absent an express assignment of IP rights, those contractors could lay claim to profits or otherwise as the owner of the software or infographic they created for your business.
Lucasfilm famously took to the High Court a plastic mouldings designer from Twickenham who made the moulds and prototypes for the Stormtrooper helmets (and other well recognised props) for the first Star Wars film, A New Hope. In the initial copyright infringement claim, the designer relied upon the defence that without an agreement, copyright belonged to him as the author or creator of the helmets and props. Indeed, in the Tunisian desert in 1976, there were no contracts – therefore there was a case to be heard to determine ownership of the rights in these now lucrative items of merchandise.
The High Court ended up implying a contract between the parties to give the rights to Lucasfilm. However, you don’t want to have an embittered and costly legal dispute in order to claim what you feel in a commercial context you should rightly own. Also, whether the enormity of a Court ruling that George Lucas didn’t in fact own the rights to his Stormtroopers had anything to do with it, we will never know.
By contrast, there is less confusion as to the subsistence and ownership of registered IP rights such as patents, trademarks and design rights as the rights holder has to actively take steps to own those rights. Consequently, registered IP rights are much more effective and easier to invoke against third party infringers.
Nevertheless, complications don’t only arise from issues of ownership. Much of the value in IP rights is in exploiting them and raising revenue by licensing them to third parties to expand a business’s activities and brand. Failing to properly document the movement and consents associated with a business’s IP rights often comes to the fore at critical times in a business’s lifecycle such as when raising finance or anticipating a sale, and can delay or even destroy a deal.
Intellectual property rights are a capital asset on a business’s balance sheet. They require robust protection and shouldn’t be treated with neglected.
Takeaway tips for businesses:
1. Know what IP rights you have and are creating
2. Make sure you own them
3. Register what you can
4. Ensure chain of title
5. Clear third party rights before using names, slogans and designs
6. Be wary of using or even referring to other people’s creative endeavour if only for "inspiration"
Cordelia Payne is a partner at Acuity Law.
Image credit: Leamsii/Pixabay (Creative Commons)