Almost every business owner in Australia has more intellectual property than they currently realise.
The good news is that these hidden intellectual property assets can add tens of thousands of dollars to your business’s overall value – immediately. It’s like winning the lotto if you are considering a visit to your bank manager, courting investors, looking to franchise your product or manufacturing process, or if you are keen to sell your business.
The bad news is that any unidentified intellectual property assets are potentially under-protected and therefore vulnerable to your competitors. In fact much of the intellectual property of businesses in Australia are not protected at all. Some under-protected assets can actually get you sued, while others can be carted off by employees who go on to work for your competitors or become competitors themselves.
Stepping out of the closet
So how can you reveal these assets, protect them as cheaply as possible and keep them where they belong in your business? Start by categorising all of your intellectual property assets into seven basic categories:
- Trademarks. This includes all business, company and trade names, along with trademarks (registered or unregistered), slogans and other commonly used phrases associated with your business.
- Patents. Includes potential patents (and secret formulas), trade secrets and industry know-how.
- Designs. Anything that is a physical product, or patterns or ornamentation that might go on a physical product (and is intended to be mass produced), can be a registered design.
- Copyright. Drafts, renderings, animations, prototypes and promotional materials like brochures, videos, flyers, and advertisements should all be included.
- Confidential Information. This includes customer lists, plans for new products or processes and advertising and marketing campaigns.
- Circuit Layout Rights. This applies to the configuration of electronic circuits.
- Plant Breeder’s Rights. For the development of new plant and tree breeds.
An impressive portfolio
In my experience, most business owners assume they have little or no intellectual property at all. But by just glancing at these categories you can probably see that there is a full spectrum of assets that you didn’t even know that you owned.
When you compile a full listing of all of these assets, you will have created what I call an ‘Intellectual Property Portfolio’ (IPP). It is an extremely compelling and appealing document when you are seeking further finance, investment, franchisees or potential buyers. While it is possible to put a dollar figure next to each line entry, it is a complex and expensive undertaking and there are few specialists in this field in this country. Even without it, you will see that your own IPP is amazingly impressive and significantly adds value to your business.
IP Australia
Of the seven intellectual property rights listed above, three – patents, trademarks and designs – are formally granted in this country by IP Australia, the Federal Government body that incorporates the Patents, Trade Marks and Designs Offices (plant breeder’s rights are administered by Plant Breeder’s Rights Australia).
You should always apply for registered trademarks for all business, company, new product and new service names. It is easy to search for names, both existing and potential, with IP Australia’s website at www.ipaustralia.gov.au and you can even apply online.
In fact, this website is excellent for understanding the details of intellectual property rights. You can also find out which fees apply and download application forms. If you don’t have internet access, contact IP Australia’s state offices on 1300 651 010 to get copies of their Patents, Trade Marks and Designs information packs, which also include applications and official fee schedules.
Protected or downright dangerous?
After you have written down your IPP, the next thing to do is to identify which of these are formally protected, which are protected by default and which are completely unprotected and potentially dangerous.
If you are considering applying for a patent or registering a design, make sure you do this before entering the marketplace in any way. Absolutely do not go to the media before applying for patent or design protection as you lose the right to protection.
If you have already applied for a right, make sure maintenance fees are paid or your ownership could lapse or be taken over by someone else. If you have used a patent or trademark attorney, they will contact you when fees are due and you will also be charged for this service.
Patent and trademark attorneys are specialists in the area of intellectual property protection and are essential when filing patent applications and filing for any rights overseas. However, you should know that once you familiarise yourself with trademarks and designs, you may wish to file these yourself and potentially save thousands of dollars.
Making it stick
When it comes to enforcing the integrity of your trade secrets, know-how and confidential information, you will need to rely on a combination of legal agreements and your employees’ fear of future legal action.
All staff and subcontractors should sign employee/subcontractor agreements to make it clear that they are not allowed to benefit, or help third parties to benefit, from proprietary information during their employment or after they leave. When a staff member does move on, sit them down and remind them of their obligations as laid out in their signed agreement. If you have any concerns, make it clear that you will be monitoring the marketplace for potential leaks of confidential information or trade secrets.
Finally, many of these assets will automatically be protected through copyright. The best way to take advantage of this ‘free’ right is to ensure that you use the standard copyright line on all promotional materials, storyboards, bids, correspondence and so on; ‘ Your Business Name Year. All rights reserved.’ This line really should be added as a footer to all documents that leave your office.
Not sexy, just valuable
Intellectual property might not be the sexiest term around, but it is clearly the centrepiece of any dynamic Australian business. I guarantee that formalising your IPP and making sure that your assets are well protected will dramatically increase the value of your business.
