Registered intellectual property (IP) rights provide you with exclusive rights. You have the opportunity to sell, promote or develop your product while limiting competition from other businesses or individuals for set periods. However, IP rights are restricted in both their duration and scope. This is to balance the incentives to innovate with the need for competition.
Each IP right has its own restriction. For instance, standard patents last for 20 years and designs for 10 years. Renewal fees must be paid to ensure patents and designs remain in force for these periods. Trade marks can remain in force indefinitely provided renewal fees are paid every 10 years.
Patents, trade marks, designs and plant breeder’s rights are designed for different products and are applied in various ways. They require applicants to complete differing compliance criteria.
You should familiarise yourself with the different rights before you apply. Applying for the wrong protection can be costly.
Protecting your IP early is important when establishing your product or service in the market. It can be the difference between success and failure.
IP rights provide competitive advantages
IP rights provide you with a number of competitive advantages. They can be an extremely valuable bargaining tool and, in most cases, be sold for financial gain.
IP rights may help you or your business compete using the reputation associated with a product and innovation rather than on price alone. They give you the right to determine who can use your IP and how it can be used.
IP rights differ from physical assets because they can be used many times without diminishing. For example, the same IP can be licensed to a number of different licensees each based on a specified geographic region.
IP laws reduce the chances of your products and/or services being replicated and passed off as those of a rival trader, and can open up new opportunities.
For these reasons, IP rights can become valuable assets.
Buyer beware: IP is not automatically included
When buying into a business, you are responsible for ensuring that the IP rights are included.
An example that highlights the importance of this point is Volkswagen's takeover of Rolls-Royce Motor Cars. Volkswagen wrongly assumed that if it purchased Rolls-Royce all the IP rights to the brand would also be included. This was despite the directors of Rolls-Royce clearly stating that BMW was the preferred custodian of the Rolls-Royce brand name. The situation led to a long, expensive and bitter legal battle before the European Commission, in which Volkswagen questioned Rolls-Royce’s moral right to control the brand name.
A range of IP rights can be used to protect different aspects of the same product or service.
A product can have patents applying to how it works, a registered trade mark protecting its brand name and a design for its appearance. These layers of protection can be used in complementary ways.
For example, when innovator Katherine Drayton came up with an idea for an ergonomic beach chair, she didn’t just take out one IP right to protect her idea. She decided that she would take out design rights, a patent and a trade mark. Each served a different purpose for her product.
The more IP rights that can be used to protect a particular product or service, the more resistant your product or service will be to imitation and competition.
IP rights can benefit society
IP rights encourage owners to engage in innovative activities that benefit society.
For example, a team of astronomers from the Commonwealth Scientific and Industrial Research Organisation (CSIRO) were working on overcoming the distortion of radio waves and discovered wireless local area network (WLAN), which is the pre-cursor to Wireless Fidelity (Wi-Fi). They then secured the rights (a patent) to their discovery.