Intellectual Property Update: IP Concerns for Technology Companies
24 October 2017
Decisions relating to intellectual property (IP) can have major long-term implications for technology companies. They can impact significantly on company's tax bill or on its ability to enforce its IP rights. We explore some key considerations related to IP for technology businesses operating in the Irish market.
Identify IP rights at the outset
IP falls into four categories – trade marks, patents, copyright and designs.
A trade mark or ‘brand name’ is any sign that can act as a badge of origin for goods or services and includes company names and product names, which are often the same. A registered trade mark lasts for ten years but can be renewed indefinitely.
Patents are inventions which are new, inventive and which are capable of industrial application, and have been successfully registered with the Patents Office. They grant a monopoly over the claims set out in the patent. In Ireland, protection can be granted for a short-term period of ten years or twenty years for full-term protection.
Copyright is the primary protection for software, although patent protection should also be considered. Copyright also protects literary, musical and artistic works.
Designs are very useful for protecting logos, packaging and graphical user interfaces or GUIs. Design rights can be both registered and unregistered. A national or community registered design right lasts for five years and can be renewed up to a maximum of 25 years. In comparison, the unregistered community design right lasts for three years.
Register IP rights early
Except for copyright, which arises automatically, all IP rights should be registered in Ireland and abroad. Patents, registered trade marks and designs are all territorial. This means they only protect the IP for the country or countries in which registration is made. Therefore, it is important that all key markets are identified at an early stage so that a comprehensive and cost-effective plan is implemented. When dealing with patents, it is crucial that an invention is kept confidential and not disclosed prior to speaking with a patent attorney. Otherwise, the opportunity to register the invention as a patent may be lost.
European Union Trade Marks, European Patents and similar systems around the world provide the ability to register IP across a number of jurisdictions.
Another advantage to registering a patent or trade mark is that tax deductions may be available for the costs of obtaining protection. There are additional tax incentives available for research and development.
Consider IP in all contract including workplace contracts
Businesses should be aware that they may not own the work created for them by contractors. While there is some protection provided by legislation, written agreements dealing with IP ownership and confidentiality obligations should be signed with all contractors to avoid a shock and expensive legal fees at a later stage. The general rule is that any work created by an employee in the course of their employment is the property of the employer. However, it is advisable to remove any potential for confusion by including appropriate terms in the contract of employment.
Monitor and review your IP portfolio as business expands
At the outset, it is important to register your primary mark, either your business name or product name, as a trade mark as neither the incorporation of a company with a particular name nor the registration of a business name grants any rights to that name. To obtain enforceable rights, a trade mark registration should be sought. As the scope of your business expands, be mindful of registering protection for new product or service names or branding.
Keep your business informed of legislative changes
The Intellectual Property sphere is constantly undergoing change. In addition to the ongoing changes to registration requirements, changes to tax legislation and updates to government schemes can occur at any stage. The 2018 Budget, which was announced on 10 October 2017 brought about changes for tax relief available for income from intellectual property transferred into Ireland. IDA Ireland, whose main objective is to encourage investment into Ireland, offers a range of funding programmes and incentives to assist new entrants to the Irish market. Enterprise Ireland also offers advice and support for entrepreneurs and early-stage companies and implements a number of government-led initiatives.
Businesses should place significant importance on reviewing and maintaining their IP portfolio on an ongoing basis. It is advisable to consider IP issues at the outset of creating a business but, for more established businesses, it is never too late to seek advice and take steps towards protecting your IP.
The content of this article is provided for information purposes only and does not constitute legal or other advice.