What is Intellectual Property? The Basics of IP.
Intellectual property is a unique and complicated area of law. Are you looking to learn more about IP? Read our guide below which takes you through all of the main areas.
DISCLAIMER: The content within this post is for educational and entertainment purposes only. Virtuoso Legal does not take any responsibility for those that use this information and waive any liability for any resulting effect on your personal or commercial circumstances. If you are experiencing an issue and need advice, we strongly encourage you to contact a solicitor to identify your best course of action.
What is intellectual property?
Intellectual property (otherwise known as IP) is the name given for a category of intangible creations emerging from human creativity.
Examples of creations that fall under IP are: videos, photos, designs, inventions, brands, business secrets and a lot more. It has become more important than ever for businesses and creators to protect their intellectual property.
How is intellectual property protected?
Intellectual property is protected by law through intellectual property rights (IPRs) – some of which you have to register and others which are automatic.
This can include things like patents, copyright or trademarks, and design rights. Intellectual property rights enable you, the property holder, to earn recognition or financial benefits from anything you invent or create.
Most countries around the world have regimes of intellectual property rights, and in many cases, these are also covered by international treaties and legal regimes.
What is the aim of the IP system?
The aim of the IP system is to find the right balance between the interests of the creators and innovators and the interests of the wider public who may overlook these creations and inventions and infringe on their creator’s rights.
It is considered that achieving the right balance that is not unfair to the IP creators or the wider public is the best way to create an environment where creativity and innovation can flourish.
What is the history of intellectual property?
The origins of IP law date all the way back to the Statute of Monopolies (1624) and the British Statute of Anne (1710), where early patent law and copyright respectively were implemented.
The term “Intellectual Property” dates to 1769, when the phrase was used in a publication called “Monthly Review”.
Common usage of IP did not occur until over a century later. This was seen when the administrative secretariats, established by the Paris Convention and the Berne Convention (1886), merged in 1893. The organisation adopted the term Intellectual Property in their new combined title, as the United International Bureaux for the Protection of Intellectual Property.
It was then succeeded in 1967 with the establishment of the World Intellectual Property Organization (WIPO), as an agency of the United Nations. At this point, the term gained widespread usage in the United States, which had not been part of the Berne Convention.
Until recent years, intellectual property law’s purpose was to give creators as little protection as possible, (so that the public could still benefit from new creations) and was granted in order to encourage innovation. Historically, patents and copyright were only granted when they were necessary to encourage invention and as such were highly limited in time and scope. Of course, this was done in a time when knowledge was viewed as a public good, in order to allow it to be extensively disseminated and therefore improved on.
The WIPO eventually aimed to create a comprehensive and universal set of minimum requirements, which would create a “one-size-fits-all” protection law on intellectual property. This idea was widely viewed with controversy regarding the differences in the sophistication of countries – meaning some would enjoy an advantage over others.
Despite this, the agreement has extensively incorporated intellectual property rights into the global trading system for the first time in 1995. It has widely prevailed as the most comprehensive agreement reached by the world.
What is the purpose of intellectual property?
Intellectual property’s main purpose is to encourage the creation of a wide variety of intangible goods for consumers. This is achieved by the law giving people and businesses property rights to the information and intellectual goods they create, however, typically only for a limited amount of time. Attaining these rights allows the owners to make a profit on them, giving an economic incentive for their creation.
The intangible nature of intellectual property, being that as it is information it is invisible, presents difficulties when compared to traditional property such as land or goods. An infinite number of people can “consume” an intellectual good without it actually being depleted. This also causes issues when it comes to investment in intellectual goods. It also causes problems when it comes to appropriation. In a real-world example, a landowner is able to surround their property with fences and guards to protect it, but the producer of information or an intellectual good cannot defend their property so easily. In theory, making way for the first buyer to replicate the property and sell it at a lower price. It can also be difficult to know when intellectual property theft has even occurred.
This issue is the primary focus of modern intellectual property law as they try to find a balance in the rights given to owners so that they can protect their property. They need to be strong enough to encourage the creation of information and intellectual goods through good protection, while not being so strong that prevent the ability for this property to be widely used to the benefit of all.
How is intellectual property protected?
Intellectual property rights are covered under the law by a number of rights that offer protection to the creators of intellectual goods and vary around the globe. These rights include things like: patents, copyright, industrial design rights, trade marks (spelt “trademarks” in the USA), plant variety rights, trade dress, geographical indications and in some territories, even trade secrets.
Additionally, there are specialised or derived varieties of sui generis exclusive rights – including circuit design rights, supplementary protection certificates for pharmaceutical products and database rights. As such, whatever industry a business operates in, there is a range of relevant IP rights that can be sought after. It is also typical for businesses to be unaware or underestimate how much IP they have and how important it is to their business.
Patents are a form of right that is granted to you by the government, it gives the owner the right to exclude other parties from making, using, selling, offering to sell, and importing their invention for a limited period of time. In exchange, the creator must publicly disclose the invention, and then when the patent expires the invention becomes public domain.
Under patent law, an invention is a solution to a technological problem. This may be a product or process and generally must meet three main requirements in order to gain a patent:
- It has to be a new invention.
- It has to not be obvious.
- It has to have an industrial application.
In order to enrich the body of knowledge and stimulate innovation, the patent owner is obliged to disclose any and all valuable information about their inventions to the general public.
A trade mark is a form of recognisable sign, design or expression that identifies any products or services from those of other companies. Trade marks used to identify services are usually called service marks. Trade marks can be owned by an individual, business or any legal entity. They are usually located on a package, label, voucher or the product itself. Additionally, to preserve corporate identity, trade marks are often on the company’s buildings.
Trade marks can technically be a number of different things. This includes: words, logos, colours, combinations of sounds (e.g. an advertising jingle) and even smells!
The main thing about trade marks is that they are used to identify one buisiness’ products from another.
For example, we know that chocolate that is wrapped in purple packaging is Cadbury’s. Cadbury’s have a registered trade mark for this colour which no one else can use for confectionary without fear of hearing from Cadbury’s lawyers.
This is fair because Cadbury has built up a reputation for this colour in chocolate (which wasn’t there before they sold high-quality chocolate products in purple packaging). The trade mark protects this reputation and stops other people benefitting from or damaging it with inferior goods using the same mark.
So trade marks ae used to identify the brand owner of a particular product or service. Trade marks can also be used by other companies under licensing agreements, for example, the Lego Group purchased a license from Lucasfilm to allow them to launch the Lego Star Wars range and accompanying games.
Trade marks are designated by the following symbols:
™– Unregistered Trade Mark
℠ – Unregistered Service mark
® – Registered Trade Mark
If you are a trade mark owner, you may pursue legal action against trade mark infringement. In most countries, you are required to register a trade mark as a pre-requisite for pursuing this type of action, although there are often some unregistered rights that can be perused such as “passing off”.
Industrial design rights
Industrial design rights protect the visual design of objects that are not wholly used for utility purposes. An industrial design includes the creation of a shape, configuration or composition of pattern or colour; or the combination of pattern and colour in a three-dimensional form and of aesthetic value.
Under The Hague Agreement Concerning the International Deposit of Industrial Designs, a treaty administered by WIPO, there is a procedure for an international registration. For something to qualify for registration, the laws of the majority of the WIPO member states require that the design is novel. Applicants can apply for a single international deposit with WIPO or individually with the national office of a country that is a party to the treaty.
In addition to this, you can register designs at the UKIPO and at the European level at the EUIPO – though the protection each of these offers varies. In addition to this, designs also attract unregistered design rights at the point that they are made – though these rights are less robust than those that have been registered.
Industrial design right registration is related to granting a patent.
Copyright is a legal right that grants the creator(s) of an original work exclusive rights over how the work may be used by others, however, usually for a limited time. It is, however, one of the longest-lasting of the intellectual property rights. Exclusive rights are not absolute in their control over original work and are limited by exceptions made in copyright law, such as “fair use”.
As a form of intellectual property, copyright is applicable to forms of creative works including creative, intellectual and artistic forms. Copyright only protects the expression of ideas and not the underlying ideas themselves. So, for example, Harry Potter the character and the stories he appears in are protected by copyright (as well as trade marks) – but the idea of a book about a boy who goes to a school of magic is not.
Copyright holders have the right to:
- Control over derivative works
- Public Performance
- Moral rights (such as attribution)
Copyright usually expires 50 to 100 years after the creator has died, depending on the jurisdiction. In some countries, copyright formalities must be established for copyright to be granted, others recognise any complete work without formal copyright registration. For the most part, however, Copyright comes into existence automatically at the point that an original creative work is made.
The violation of intellectual property rights is called “infringement”. This term is used in regard to design rights, patents, copyrights and trade marks. infringement may be treated as a breach of civil law or criminal law, although this depends on the type of intellectual property, the country where it occurs and the nature of the action.
These rights are infringed when any works protected by IP law are used, copied or exploited without the proper permission from the person or organisation who owns those rights. A couple of examples of IP infringement include “counterfeiting” and “piracy”, as detailed below:
Counterfeiting is the practice of someone imitating genuine goods that are often inferior in quality with the intent to take advantage of the much more superior value of the product being imitated e.g. using identical or highly similar trade marks.
Piracy is defined by the unauthorised copying, use, reproduction and/or distribution of any materials that are protected by intellectual property rights e.g. the unauthorised recording and distribution of films online.
An intellectual property infringement may be one of the following.
Generally speaking, if a party (other than the patentee or licensee of the patentee) manufacturers, uses, offers, sells or imports patented technology without permission or a license from the patentee, during the term the patent is held and within the country that it was issued in, it is considered that they have infringed the patent.
An accused infringing party may claim in response one or more of the following statements:
- It is not practising the patented invention
- It was not performing any infringing act in the territory covered by the patent
- The patent has expired
- The patent is invalid because the invention does not meet the criteria for patenting or it includes a formal defect, which would render it invalid
- It has obtained a license from the patentee
The parties on either side of the dispute may resolve it with a settlement, which may include a cross-licensing agreement. Although, private settlements might not always serve the public interest which is an objective of the patent system.
Trade mark infringement
When a trade mark has been infringed, the attached exclusive rights have been violated without the authorisation of either the trade mark owner or a licensee. Trade mark infringement occurs when an accused party uses a trade mark which is identical or confusingly similar to a trade mark owned by someone else. This is usually in relation to products or services that are identical or similar to those covered by the trade mark registration.
Courts will consider several factors when determining if a trade mark has been infringed:
- Whether the claimanthas a valid trade mark.
- Whether the trade mark is being used by the defendant.
- Whether the defendant’s use of the trade mark is “in commerce.”
- Whether that use Is connected to the sale, offer, distribution or advertising of the product.
- Whether the defendant’s use of the trade mark is likely to confuse consumers.
Where the defendant does not hold a trade mark for a sign that they use to demarcate their goods and services – they can still protect this through “passing off”. This is much more difficult and costly and typically results in less protection.
Copyright infringement occurs when a work protected by copyright is used without permission. This infringes the exclusive rights held by the copyright holder, such as reproduction, distribution, displaying and performing the protected work. Disputes regarding copyright are usually resolved through direct negotiations, notice and takedown processes – or, litigation in civil court.
The terms “piracy” and “theft” are usually used in copyright disputes when pursuing action against those that have violated the copyright holder’s rights. “Piracy” originated from the word meaning “robbery or illegal violence at sea”, but it has been used for centuries as a synonym for acts that account for copyright infringement. Similarly, “theft” is more commonly used to refer to the theft of tangible property, however, it is used in terms of copyrighted material to emphasise the potential loss of commercial profits.
In the context of copyright infringement, “piracy” refers to the unauthorised copying, distribution and selling of works protected by copyright. Traditionally, “piracy” referred to acts of copyright infringement intentionally committed for financial gain. However, in the digital age, “piracy” is used to describe the unauthorised sharing of music, films, TV shows and other creative works through peer-to-peer file-sharing website.
Holders of copyright often refer to copyright infringement as “theft”. Although, it does not refer to the theft of physical objects it describes when a person exercises the exclusive rights of the holder without permission. A more literal term for such offences is a misappropriation of copyrighted material.
There are several major motives for someone committing copyright infringement:
- Pricing – unwillingness or inability to pay for the copyrighted works.
- Unavailability – no legitimate way to purchase the copyrighted works.
- Usefulness – DRMs, region locks and adverts are removed for a more desired end product.
- Shopping experience – no easy and legitimate way to purchase the copyrighted works legally.
- Anonymity – no information or credentials need to be given, unlike online transactions where this is the default requirement.
- Freedom of information – not believing that the idea of copyright should exist either in the particular work or more generally.
These motives, however credible, would typically fail under the scrutiny of a civil court judge.
Trade secret misappropriation
Trade secrets are not protected by law in the way as say patents and trade marks. They are an important, albeit invisible components of a company’s intellectual property. Often, trade secrets’ contribution to a company’s value can be major and what makes them stick out from the competition. Although, trade secrets are invisible and are hard to measure exactly – often a company does not realise that they rely on certain trade secrets until misappropriation has occurred. Whereas patents show a visible contribution to the output of a company, they are unsuitable for internal innovations (e.g. contact lists, ways of working, practical know-how and operational knowledge) where trade secrets offer much more utility.
The language used by courts in the case of trade secrets varies by jurisdiction, as do what type of information is subject to the protection. There are however three common factors for all the definitions that are used and exist in international law under article 39 of the Agreement on Trade-Related Aspects of Intellectual Property Rights:
- Information that is not known to the general public.
- Information that has an economic benefit to its holder because it is not publically known.
- Information that is subjected to reasonable levels of protection by the holder to maintain its secrecy from competition and the public.
Misappropriation occurs when companies try and discover their competitor’s trade secrets through lawful methods, such as reverse engineering or poaching employers, and potentially more unlawful methods, such as industrial espionage.
When someone commits industrial espionage, they are generally breaking governing laws by the very act of the methods used and carry harsh penalties. This is important as if trade secrets are obtained through improper means then they can generally be deemed to have been misappropriated whereas with the lawful methods mentioned above – this misappropriation can be harder to prove.
The Trade-Related Aspect of Intellectual Property Rights (TRIPS) Agreement, setup up and agreed upon by all 162 World Trade Organisation (WTO) member parties, has a major role in facilitating the trade of knowledge and creativity. It is the reference for resolving any trade disputes over intellectual property rights, infringement, misappropriation and enforcement and assures that WTO members are consistent in their domestic objectives. The Agreement acts as legal recognition of the significance of the link between intellectual property and trade.
Prior to this agreement, the extent and protection and enforcement provided for these rights varied widely across the world. As such, intellectual property became much more important in trading between companies and countries, becoming a tension between international economic relations. With the TRIPS Agreement provided new rules for intellectual property rights and was seen as a way to introduce more order and predictability, while settling disputes systematically.
Five broad areas are covered by the TRIPS Agreement:
- How general provisions and basic principles of the multilateral trading system apply to international intellectual property.
- What the minimum standards of protection are for intellectual property rights that member should provide.
- Which procedures members should provide for the enforcement of those rights in their own territories.
- How to settle disputes about intellectual property between members of the WTO.
- Special transitional arrangements for the implementation of TRIPS provision.
Enforcement of patent rights
Under the TRIPS Agreement, patent protection must be available for all eligible inventions in every field of technology that is new, involve an inventive creation and can be applied at an industrial level. Additionally, these rights are protected for at least 20 years. However, governments are allowed to refuse the issuing of a patent if the sale of it needs to be prohibited for reasons of public order or morality.
The TRIPS Agreement also details the minimum rights that a patent owner must be allowed to enjoy and it defines the conditions under which certain exceptions to these rights are permitted. It also outlines permissions for the government to issue “compulsory licenses”, this would allow competitors to produce the product or use a process under license without having to achieve the owner’s consent. Although this can only be granted under a specific set of conditions outlined by the TRIPS Agreement that are aimed at protecting the interests of the patent holder.
In the event that a patent is issued for the invention of a process, the rights must extend to the product that is created as a direct result of the process. There are also certain conditions in which alleged infringers must be ordered by the court to prove that they haven’t used the process covered by a patent.
Enforcement of copyright
As outlined in the Proof of “Intellectual Property: Copyright” section, copyright refers to the rights that are allowed to authors of literary and artistic works. Additionally, in a wider sense, copyright also includes rights related to copyright which is granted to performers, producers of phonograms and broadcasting organisations.
During the Uruguay round of negotiations for the TRIPS Agreement, members agreed that the standards for copyright protection outlined in the Berne Convention for the Protection of Literary and Artistic Works were largely satisfactory. The TRIPS Agreement provides provisions on copyright and all related rights that clarify or add obligations on several points:
- Computer programs will be protected as literary works under the Berne Convention and the Agreement outlines that databases must be protected under copyright.
- The TRIPS Agreement expands international copyright rules to cover rental rights. It says that the authors of computer programs and producers of sound recordings must be allowed to prohibit the commercial rental of their works to the general public.
- An exclusive right also applies to films where commercial rental has also lead to the widespread copying which affects copyright-owners’ potential earnings from their films.
- Performers are also entitled to the right to prevent the unauthorised recording, reproduction and broadcast of live performances (known as bootlegging) for no less than 50 years.
- Additionally, producers of sound recordings must be allowed the right to prevent the unauthorised reproduction of their recording for a period of 50 years.
Enforcement of industrial design rights
Industrial Design Rights are granted to the ornamental or aesthetic aspects on an article rather than its technical features (which would be covered by a patent in most cases).
Under the TRIPS Agreement, any original or new industrial designs must be protected by industrial design rights for a period of at least 10 years. The owners of protected designs must be allowed to prevent the manufacture, sale or importation of articles that bear or embody a design which is seen as a copy or substantially similar to the protected design and is being used for commercial purposes.
Enforcement of trade marks
Trade Marks are granted as a sign or a combination of different signs that are used to distinguish a company’s goods or service from those of another company.
The TRIPS Agreement also defines what types of signs are eligible for production as trade marks and what the minimum rights that are granted to their owners must be. In addition, it says that service marks must be allowed the protection as trade marks do in reference to goods provided by a company. Trade and service marks that have become substantially well-known in a particular country also benefit from additional protection under intellectual property law.
ABOUT VIRTUOSO LEGAL
Virtuoso Legal is a team of intellectual property specialists based in Leeds and London - operating worldwide.Virtuoso Legal's team of IP experts have successfully tried cases in the IPEC, High Court, Court of Appeals and United Kingdom Supreme Court. In addition, the team assist companies in creating, commercialising and protecting the big ideas that make their business unique. The firm and its professionals are ranked yearly in legal directories such as the Legal 500 and Chambers and Partners, cementing their status as a Top 2% law firm in the world.