INFRINGEMENT

Infringement is the unauthorised use of another person's IP rights. To take action against an infringer is called enforcement. In your business, you want to avoid infringement on two levels:

1. The first is to protect your IP against infringement;
2. The second is to protect yourself against infringing others' IP.
   

Be infringement ready

A method for detecting infringements should be developed where IP assets are critically important for business income and success. Know what your rights are and be prepared to act if your rights are violated. When you detect infringement of your IP rights, it is a good idea to seek legal assistance in dealing with infringement - this law is complex and you can be sued for unjustified threats of infringement. Make sure you can prove that infringement has occurred.

Understand the costs, benefits and the risks of infringement actions - legal action can be costly and drawn out. If infringement has occurred, seek the professional advice of an IP lawyer first, as there are a range of options you may be able to use before taking the infringer to court. These range from a letter of warning from your attorney or legal adviser, negotiations to settle out of court and, if this fails, court action. Whatever action you do take, make sure any infringer knows you are serious about protecting your IP. Delay could also jeopardise your legal rights to obtain an injunction.

Protecting your business' IP from infringement on the Internet

When you trade on the Internet, you effectively have a global business because anyone overseas can access your website. The global nature of the Internet makes IP protection challenging and enforcement of your IP rights difficult, but you can take steps to minimise your exposure.

Protect your IP as best you can by taking active measures to discourage misuse. Include a section on your website which specifically states the terms and conditions for use of your material. For example, include a clearly visible notice at the beginning or end of a document, which states that information can only be used if proper acknowledgment is given. You should also acknowledge any IP you use but do not own on your website or in your documents by including appropriate copyright ownership notices.

Tools are available to protect your content on the Internet. For example, you can 'watermark' an image, identify the copyright owner, its country of origin and the permitted uses of the image. In Australia, a registered trade mark used on the Internet can be protected under the Trade Marks Act 1995. However, a registered trade mark does not necessarily entitle you to a domain name of the same name.

When enforcing your IP rights on the Internet it can be difficult to identify infringers or infringing websites outside Australia. Different countries also have different legal systems, which further complicates enforcement. The most useful approach is to be proactive - do keyword searches using your trade mark, visit related websites and maintain vigilance about the way others use your material.

What to do if an IP holder alleges that you have infringed their rights

Seek legal advice on any notices of infringement you receive. Don’t make admissions until legal advice has been secured. The law does not support unwarranted threats of infringement and those who threaten you frivolously or without legal foundation can be sued.

IP & Taxes

Because your IP represents a collection of assets, tax implications can arise. IP assets can trigger numerous tax-related issues such as:

• income tax;
• capital gains tax;
• tax deductions;
• depreciation;
• trade mark taxation;
• special tax write-offs;
• withholding taxes-both local and international;
• GST; and
• stamp duty.

Many of the tax implications will not apply to your business, but it is important to talk to your accountant if you intend to sell or license your IP. It is also very important to get this advice early, as it can vary depending on who owns the IP. For more information, see the Australian Taxation Office website at www.ato.gov.au

Of particular relevance is Australia's adoption of the International Financial Reporting Standards (IFRS). These standards have particular implications for reporting intangible assets, including intellectual property. For a full explanation of the implications of IFRS on reporting intangible assets, consult your accountant or visit www.cpaaustralia.com.au

Ultimately your commitment to your IP assets depends on how important they are to your business success. But don't forget, in planning for your business' growth, what might seem unimportant today might be worth millions of dollars to you in the future. That's why you should be IP smart from the very start.