Who owns what when it comes to IP

Intellectual property (IP) is something unique that you physically create.

An idea is not intellectual property unless it has been executed or documented.

You own IP if you created it or bought IP rights from the creator or a previous owner.

The owner of the IP is entitled to commercially exploit it, to the exclusion of anyone else, unless the owner decides to permit others to have access to it.

Due to their nature as property rights, IP can be bought, sold, or licensed and this can give them very substantial value.

Being clear about who owns IP is important.

Protecting IP well is a key part of unlocking its full commercial potential for your business too – not to mention the expectation of investors and business partners that you’ll have protected their investment in your business or relationship.

Demonstrating that you own the IP is also vital.

But it all starts with ownership.

In this guide, we’ll look at who owns what IP and how.

Copyright

Copyright ownership can arise automatically or by means of transfer of rights.

There are a number of forms of copyright.

Here’s how the ownership of copyright breaks down:

• The author or creator of literary, theatrical, musical or artistic works including photographs and images, as well as software code;
• The director and producer of films;
• The producer of sound recordings;
• The broadcaster of broadcasts;
• The publisher of published works.

What’s the position when an employee’s creating the work?

If a literary, dramatic, musical or artistic work, or a film, or software code, is created by an employee as part of their standard contractual duties, the employer is the first owner of copyright, (unless there’s an express agreement to any contrary, which there very often isn’t).

What’s the position where a freelancer or contractor creates the work for you?

Who owns the copyright will depend on the terms of the contractual arrangement between your business and the freelancer or contractor.

In the absence of anything clearly written, the ownership of what is created will remain with the freelancer or the contractor, and you may in fact have only very limited scope to use what has been created.

You certainly won’t be entitled to license or to sell it, or even to modify it, without permission of its creator.

This is one very good reason to have a good services agreement in place where you’re engaging suppliers to work for or with you in creating IP.

What about ‘moral rights’?

There are four moral rights recognised in Ireland::

1. The right to have the works attributed to you, because you’re the original creator of them

2. The right to object to derogatory treatment of a work

Derogatory treatment is defined as any addition, deletion, alteration or adaption of a work that amounts to a distortion, or mutilation of the work, or which is otherwise prejudicial to the honour or reputation of the author.

3. The right to object to false attribution

This is the right not to be named as the author of a work you did not create.

It prevents, for example, a well-known author being named as the author of a story they did not write.

4. The right to privacy of certain photographs and films.

This right enables someone who has commissioned a photograph or film for private and domestic purposes, to prevent it from being made available or exhibited to the public.

It allows you, for example, to prevent a photographer from putting your wedding photographs on their website without your permission.

So, if you originally created literary, dramatic, musical and artistic works and film, or certain types of performance, you alone have the moral rights to it.

Moral rights are only available for literary, dramatic, musical and artistic works and film, as well as some performances.

Can you own copyright forever?

Copyright protection starts as soon as work is created.

Once your copyright has expired, anyone can use or copy your work.

The length of copyright depends on the type of work.

Copyright usually lasts 70 years after the author’s death, for all written, dramatic, musical and artistic work.

Copyright usually lasts 70 years from when it’s first published for sound and music recordings.

For films, copyright usually lasts 70 years after the death of the director, screenplay author and composer.

Copyright in broadcasts usually lasts for 50 years from when it is first broadcast.

In relation to the layout of published editions of written, dramatic or musical works, copyright usually lasts 25 years from when it’s first published.

How can you prove its yours?

You prove it is yours by demonstrating that you created it and when you created it (the date being important to show that anything similar or identical that comes after it was a copy, and that you are the rightful owner).

You could use watermarks, or include your signature, or a copyright statement.

Trademark

Trademarks can be registered or unregistered.

They can be any sign, symbol or graphic that you apply to your goods or services to distinguish them from those of your competitors.

Registered trademarks are owned by the person or company that registered them.

The owner of an unregistered trademark is usually the person using the mark (subject to agreements to the contrary).

The trademark owner is often not the same person / company as the owner of any copyright in the mark.

For example, the creator of a logo, may not be the company or individual applying the logo to your brand.

Can you own it forever?

Yes. You can own it forever.

This is assuming you use it for the goods and services that you registered it for, and that you renew it whenever the renewal is due.

In Ireland and European Union this renewal date is every ten years.

How can you prove its yours?

This is straightforward in Ireland – especially for registered trademarks, but also for unregistered trademarks too.

If you wanted to prove you own a trademark outside of Ireland, and it’s unregistered in those countries, this is less straightforward – mainly because a number of key countries do not recognise trademarks that are not registered there.

And that’s definitely something to bear in mind if you’re exporting to these places – or you plan to.

Countries that do not recognise unregistered trademark rights include China and the United Arab Emirates.

For unregistered trademarks, to prove ownership, you have to establish goodwill in the trademark.

To do this you would need to collate the following types of evidence:

1. Annual turnover in Ireland since first use of the trademark;

2. Annual quantity sales in Ireland since first use of the trademark;

3. Dated examples of how the trademark has been applied to or used in connection with the goods and services;

4. Details of how the trademark has changed over time;

5. Dated examples of how the trademark has been promoted or advertised.

6. Annual advertising costs in Ireland since first use of the trademark;

7. Examples of dated advertisements in third party publications of the trademark;

8. Examples of any awards received of the trademark; and

9. Examples of any references in third party publications in the trademark.

It is a lot more cost-effective to apply to register a trademark at the outset.

Collating and presenting evidence can be time-consuming and inefficient.

It is much easier to wave a registration certificate at someone to prove that you own your trademark.

Patents

Patents protect technical inventions, and they are applicable to almost all industry sectors.

The general rule is that a patent is owned, in the first instance, by the inventor.

If there is more than one inventor (such as when several people collaborate to invent something), then the patent is jointly owned by all of the inventors.

Ownership of the IP is essential to tie down at an early stage in any collaboration where there is more than one inventor.

In such cases it’s advisable to get an IP ownership agreement drawn up.

An IP ownership agreement should set out who the inventors were and be clear on who owns the rights stemming from that invention.

It should also cover future inventions, clearly setting out who will own the new inventions arising from the joint venture.

Rights can also extend automatically to others…

Rights can automatically pass to anyone who is entitled to the inventor’s rights at the time the invention is made.

An example is if an employee in Ireland invents something in the course of their employment, the employer owns the rights to any patent that follows.

This only applies when it can be reasonably expected that the employee would invent something – for example, the employee is a researcher.

If the invention is outside of the employee’s terms of employment, then the rights relating to that invention would remain in the ownership that individual.

So it’s important that an employee’s duties are recorded accurately in their employment contract.

Employee inventors might be entitled to a financial benefit – though it’s very rare.

If the employer owns the rights to something invented by an employee, then the employee may be entitled to an award of compensation if the invention or the patent for it is of ‘outstanding benefit’ to the employer.

‘Outstanding benefit’ means that it is something out of the ordinary – far beyond what would be expected to arise from the duties that the employee is paid for.

The size and nature of the employer’s business is also taken into account, so while something may be of outstanding benefit to a small startup, the same thing is unlikely to be of outstanding benefit to a huge multinational corporation.

Compensation claims of this nature by employees are very rare.

So far, the courts have only awarded compensation to an employee on one occasion.

What’s the position where a freelancer or contractor creates the work for you?

The default position is that the contractor would own the rights to any IP created.

A consultancy agreement should definitely specify who will own any IP resulting from the consultancy.

So, if you want to own the patent in any invention created, you’ll need to expressly state this in the contract.

Can you own it forever?

No – the maximum lifetime of a patent is 20 years.

In some special cases (pharmaceuticals) this term can be extended, but it is not possible to own it forever.

Other types of intellectual property have different lifetimes, and these can help protect your brand in different ways.

How can you prove its yours?

When a patent or patent application is published, it lists the owner of the application on the first page.

Ownership information is also recorded by the patent offices.

So, if you are the first owner of the patent, the starting point in showing you own the patent is the patent itself, and the patent office register.

If you have acquired a patent from a previous owner, then you should consider registering the assignment at the patent office, so that your ownership is publicly recorded.

A set of documents clearly demonstrating how ownership has properly passed from the inventor to the present owner, preferably with the change in ownership registered at the patent office, will prove the ownership of the patent.

Designs

Design rights are rights to cover the look of a product.

Like trademarks, they can be registered or unregistered.

A registered design can only protect goods, as opposed to services.

What’s registrable?

To be registrable, a design must be ‘novel’ (no other identical design must exist) and it must have ‘individual character’ (it must product a different overall impression to any other design that has been made available to the public).

Features of a design that are solely dictated by their technical function (for example, the part of the USB that connects into the hardware) and features of a design which ‘must fit’ around or be connected to another product, for example car doors, are not eligible for registered design protection.

A design application can include the appearance of a product as well as its logo and its packaging.

So, whilst a design application must describe the product, the resulting protection is not limited to the product.

Why register?

The advantage of filing a registered design application over a trademark application, is that in Europe, a design application will not undergo examination, except for basic formalities.

A design application, therefore, will not be refused, even if it does not meet the novelty and individual character requirements.

This means that a design application proceeds to registration quickly.

But it may result in the owner having a design registration which is not strictly valid and may be subject to subsequent challenge and eventual invalidation by someone else.

A design registration could be enforced against a third party manufacturing a product that has the same or a similar shape, so long as the copycat product creates the same ‘overall impression’ as the protected design.

Equally, a registered design for product packaging could be enforced against third parties regardless of the type of product contained within the packaging.

A design registration can be easier to enforce against a third party than a trademark since it is not necessary to show customer confusion or that the third party is using the design on the same goods to those of the proprietor.

Who owns it?

The designer (or creator of the design) is the first owner of any design rights and entitled to apply for design registration, except where the design is created by an employee in the course of their employment.

If the design was created by an employee, the employer is the first and only owner of that design right (unless the employment contract specifically states otherwise).

What’s the position where a freelancer or contractor creates the work for you?

In the absence of a contract that demonstrates a clear agreement to the contrary, where a design has been commissioned, the third-party designer will be the first owner of the design, not the person who commissioned it.

Can you own it forever?

No.

An Irish and European Union registered design lasts for a maximum of 25 years.

Unregistered rights

There may be situations when trademarks, copyright or designs have not been infringed but where legal action may still be taken.

In Ireland, if consumers are misled by representations (which can be oral statements or implied statements such as similarly designed packaging) into thinking one product is made by or approved by another, then legal action may be possible under the law of passing off.

A common example is ‘look-alike’ packaging.

These products are so similar in appearance to a competitor’s brand that consumers may mistake them for the genuine article or believe them to be otherwise connected with the competitor’s product.