The book is aimed at businesses who often need to know how trade mark and intellectual property law affects their decisions, such as on choice of new products names.  Intellectual property issues also frequently come up when a business is commissioning works protected by copyright, or simply when they want to use existing copyright material as part of their brand marketing campaigns.

Please answer the general questionnaire unless you’re an agency that advises clients on naming or branding projects in which case answer the agency questionnaire.  If you’re a trade mark or other IP specialist please don’t complete the survey as it will probably skew the results.

General questionnaire

Agency questionnaire

We will be collecting results at the end of this month (31st January), so should you not find the time to get through the questionnaire before then there is no need to look at it.

Many thanks.

You’re likely to be thinking about a name, commissioning a website and logo to launch it, and considering how you will market it and so on.

Relatively few people think about the legal aspects until they’ve already chosen a name, created a website and maybe even finalised their branding. When they do turn to a lawyer it’s typically to register a trade mark, or perhaps because they wonder whether there’s anything they can do to protect their business concept.

I often ask myself why do people assume lawyers should be approached at the END of a branding or website project?  It’s so strikingly different to what happens in other areas of business life. If you were about to build a house, you’d first contact a lawyer to check that you could buy the plot of land. You wouldn’t simply commission builders and take your chances that you might later secure rights to the land. The risk that someone might pop up to claim better title to the land and throw you off their turf wouldn’t be one most people would willingly entertain. Also, you’d want to know whether other people have lodged planning permission to construct buildings or roads, and whether you have all the rights of access that you need and so on.  You’d know to first sort out all these ownership issues.

Maybe because intangibles are invisible people don’t really understand that there are laws – called intellectual property or IP – which govern their branding projects.  The name you choose is the branding equivalent of your plot land, while other branding elements such as website projects are like the buildings you construct on the land.  Intangibles are every bit as important, if not more important than physical assets of your business.

While the likes of Coca Cola have access to large branding or advertising agencies and highly specialist legal teams when making their branding decisions, small and medium size businesses don’t often have the benefit of timely proactive advice to help them to make good branding choices.

I suggest you take the time to understand the basics of IP law relating to brands so you find a suitably qualified lawyer to help you to achieve a strong brand.  The requirements for powerful intellectual property rights and powerful brands are typically the same.

A specialist IP brand solicitor can advise whether the name is a good one from a legal perspective because they’ll have day to day experience of trade mark registration work, copyright issues and website projects. To get value for money from an IP brand lawyer consult them BEFORE you pick your brand name, logo and tagline or commission your website.  Nothing protects a brand better than a well-chosen name or tagline. This is unfortunately not well understood that it’s the choice that determines how easy or difficult you will find it to protect your brand, and how costly it will be.

Most people assume their branding or internet professionals know all the necessary law relating to brands and websites, but they don’t. That’s not their focus or expertise. Just as you wouldn’t engage architects expecting them to also check that you can own the land on which you intend to build your house, or to know what type of locks you need to install to burglar-proof it, so it’s inappropriate to expect non-lawyers to take care of your IP rights.

The legal issues around brands and names are surprisingly complex.

Branding and internet professionals are primarily thinking about marketing, communications, and visual identity when creating websites or selecting brand elements like names and taglines for you. They may be able to do some rudimentary checks themselves to see whether a proposed name or logo is already registered by someone else, but their focus is on whether the name, tagline, logo or other component would be effective as marketing tools. An IP branding lawyer would know whether it’s a strong name which could support your business plans, as well as what checks are necessary both in the UK and elsewhere if your plans include an international dimension. It’s certainly not as straightforward as searching to see whether the same name or logo is already registered.  Similar names or logos could also pose problems, and there are a host of other considerations which your lawyer is well placed to advise upon.

A real separation exists between the worlds of branding and the law. To get a powerful brand that’s legally effective involves a close collaboration between IP brand lawyers and branding professionals. Currently it is not the norm at the smaller agency end to have such collaborative working. So whether you yourself choose your name or get a branding agency to help you, make sure you don’t end up with a weak brand name. This reduces its value as a long term IP asset.

Some name choices would be the equivalent of building a house which others could regularly break into and steal from.  I’ll explain why by taking the dance called ZUMBA as an example. The business that created this dance has given it a distinctive name and trade marked it in many countries worldwide. This means that anyone wanting to provide ZUMBA classes will need to be accredited by the business. Had the company instead chosen a descriptive name for their dance, such as NEW LATIN DANCE, they probably wouldn’t have a business now. Even if they’d managed to register this name as a trade mark in one country they’d have a tough time registering it in another and ultimately no matter how much money they spent, they would have not be able to prevent other people from offering classes featuring their invented dance.

So, for a business such as ZUMBA it would have been a bad idea to choose a descriptive name.  Instead of collecting revenues, they’d have been spending a fortune on litigation.  So, if you’ve got big plans for your business, don’t leave it till the end of your branding project to consult an IP brand lawyer.  That would reduce the legal input to one of registering and protecting your IP rights, such as they are.  It would be too late to give you effective advice.  Registering your own trade mark and not getting any legal advice at all is an even worse decision because few people manage to properly cover the full scope of their business when they do their own registration.  Your trade mark is important, so consult a specialist brand lawyer.  Contact me at Azrights or look out for my book Legally Branded out in the spring of 2012.

The venue Old Bank of England, is mid way between Chancery Lane and Bell’s Yard in Fleet Street. As you walk into the grand pub room bear right towards the bar, and then left past the bar and then turn right. We have the two adjoining downstairs rooms on the left.  They’re right by the bar area.  So, there will be more space to mingle than last time we held the tweet up in that pub as we only had one room then.

Lilia will be sitting at the entrance by the rooms till about 8.30 or 9.00 pm. Please give her £5 per person to cover the cost of food/use of the space. She will have labels so you can write out your name, and she’ll have the list of attendees so please tick off your name. This is so we can mention you in the write up of the tweetup.

In feedback report last time we held the tweet up at that venue one person said they thought £5 should cover food and a drink.  I’m afraid £5 does not go that far these days, especially in a venue like the Old Bank of England!  So, you’ll have to also buy your own drinks.

Earlier in the evening there’ll be some crisps, but otherwise no food until 7.45 pm. I’ll try and keep an eye out and make sure nobody goes without food if they arrive later on.  However, if I don’t notice that there’s no food and you’re there without anything to eat, do let me know. We’ll assess the finances and if there’s a surplus we’ll order more food, and/or a few bottles of wine later on.

Although the time given for the tweet up is 6.30-9pm, I fully expect many of you will stick around much longer than that. The organised part of the evening ends at 9pm, and personally I’ll probably leave around then as I have a busy day on 18th.  So if you’re hungry after 9pm, please understand that if there’s no food it’s because the party has officially ended…

If you haven’t responded yet please let us know whether you will be attending or if your plans have changed and you are unable to make it, please update your status: RSVP.  We are still in the process of arranging the catering for attendees, and so it would be much appreciated if you could help keep our numbers accurate.

I look forward to seeing you all on the 17th!

Many people assume copyright does prevent the copying of ideas.  However, copyright in written materials only prevents others from copying your text word for word.  It does not stop them using the ideas embodied in your text and communicating them  in their own words.

For example, copyright law cannot be used as a tool to stop your competitors setting up a similar line of business.   So writing down your business ideas will not stop others using those ideas.  Only a patent can give you a monopoly over ideas (assuming those ideas take the form of a product that is capable of being patented).

It’s important to note that while copyright does not prevent others using ideas embodied in your materials, there are some forms of copying which though not word for word copying, could nevertheless amount to infringement of other people’s copyright.  For example, if you take so much detail from a work that it could be argued that you have copied a substantial part of it.

The Ipkat today reported ‘The soccer side and the flip side: copying biographical works’ a copyright decision (Jodgon and Jarvie v Isaac and Notting Hill Movies (2011)) which helps illustrate this concept of substantial copying well.   The question in that decision turned on whether a film script of the book Flipper’s Side was an adaptation of it.

Only the copyright owner has the right to create an adaptation of a work.  It is worth reading the details of the case on Ipkat In deciding this question Judge Birss said

‘When the book and the DADM script are each considered as a whole, the DADM script is in fact very closely related to the book in terms of its plot, characters and the striking incidents and events which take place. The text is almost entirely different but nine episodes in the DADM script revolve around striking events present in Flipper’s Side and five more include notable events from Flipper’s Side as important parts of the episode. In as much as it is possible or meaningful to quantify such things, in my judgment roughly half of the dramatic incidents in the DADM script derive from Flipper’s Side.’

So having read both texts, the judge decided the script amounted to a substantial copy of the book because the main characters, many of the settings and contexts in which the events took place and good number of the incidents themselves were featured in the script.

In conclusion, if you consider that someone has copied your work it’s worth noting that even though there may not be word for word copying, if a lot of detail has been copied  you may want to take legal advice.

Many lawyers educate the public about the value of taking legal advice.  So, it is somewhat surprising for a Government funded entity to communicate the message that legal advice may be dispensed with.  For example, on the IPO website it says “some applications may benefit from professional advice” implying not all of them do.

What is really going on here?   IP law is not a straightforward topic, and in my experience all business owners benefit from professional advice.  So why does the IPO put this in doubt?

The IPO offers a wealth of information on its site www.ipo.gov.uk.  As a firm we suggest clients use the resources available for preliminary information, so that their time with us can add maximum value.  But when it comes to drafting, searching, or making informed decisions about trade marks and broader IP issues, we absolutely recommend taking professional advice as does every other IP lawyer I know.

As far as government organisations go, the IPO is fantastically helpful.  They are quick to respond, thorough, and staff are an absolute pleasure to deal with, so it saddens me to find myself levelling criticism in  their direction.  But as a solicitor who advises SMEs on Internet, and IP matters, including trade mark filings, I am absolutely sure that encouraging SMES to file their own trade marks often doesn’t do them any favours.

Some downsides of DIY trade marks

Some people who file their own applications are unsuccessful in securing a registration.  Take a look at the refused marks.  Many either have  fundamental errors which could not be resolved, or if they could be resolved, the business owners didn’t know how to do so or lacked time to deal with it.  Often applications fail because the mark is descriptive and incapable of functioning as a trade mark.

I’m even more worried about those who succeed in securing registration because the scope of the applications is often inadequate to cover the activities of their business.  What is a serious issue is that these entrepreneurs’ success gives them a false sense of security.  Some even go on to file their own Madrid applications via the WIPO website. Filing more widely on the basis of what is often an inadequate UK base application compounds the problem. If their applications are drafted by professionals there may be some recourse if they turn out to be unsuitable, but if they themselves drafted the form as laymen, they have no come back if their business suffers as a result.  Certainly they would not be able to complain that it was the IPO’s fault as the IPO is careful to avoid liability.  It will not review people’s application forms before they file.

Possible clue

The courts don’t suggest parties adopt a DIY approach to advocacy, and the DVLA don’t recommend that you pop the bonnet on your car at home to prepare for your MOT.  Although its heart is in the right place, and there is no disputing that any effort to inform the public about trade marks is worthwhile, the overall approach of the IPO does not seem to be in the best interests of the applicants themselves.  If the IPO’s motivation is really to help start ups then why not give them a discount on official fees instead?

The fact is that it is in the IPO’s interests to encourage SMEs to file trade mark applications.  A couple of years ago the IPO made 100 redundancies due to the reduced number of filings in the recession. So, on the face of it the IPO does have a conflict of interest.  If it  encourages taking advice then people would go to advisers who may not necessarily recommend trade mark registration.

In pushing trade mark registration as it undoubtedly does, the IPO is not helping start ups.  It’s adding to their costs and depriving them of the opportunity to consult lawyers who might suggest that they need not apply for a trade mark at the beginning unless they have a name they want to own (and which is capable of being owned).

Indeed, many start ups choose descriptive names and these are just fine for getting the business off the ground.  The name tells potential customers what the business does, and as it’s descriptive, nobody else will be able to register it.  Later, if the business succeeds, it should brand itself with a good name and have it professionally registered.

You don’t need to register a trade mark

I doubt the IPO is making it clear to start ups that they don’t need to register a trade mark.  Indeed judging from the below case, the IPO is likely helping businesses with descriptive names to find ways to register whatever they can, quite regardless of whether it’s an important brand element for them to register.

When would the IPO suggest taking professional advice then?

One business I know well, chatted to an IPO representative at a business start up fair, and then proceeded to file two trade mark applications for marks they felt would succeed through the registration process.  These were not much used as trade marks within the business, and therefore low priorities for registration.  The names the business did use for its products and services were too descriptive to register as trade marks.  So, these other names were seized on for no better reason than that they might succeed in being registered.

Unbeknown to the business, they have a serious problem on their hands in not having a distinctive brand name they can trade mark.

The business was so successful it had already licensed its format in a couple of countries and was set to expand more widely internationally.  The business simply did not appreciate what it means to not have a name it can own.  Any professional would advise a rebranding in light of the business’ intention to licence globally.  Otherwise, it would be missing out on owning a valuable IP asset.

Independence is key

The fact that this business spoke to an IPO representative and walked away none the wiser about the importance of consulting a professional and instead engaged in wasteful trivial trade mark registrations speaks volumes about the undesirable consequences the IPO’s current policy is having.  Unless the IPO distances itself from helping applicants to file their own marks, it is reducing the quality of its IP awareness raising activities.

This particular business is successful and could easily afford to pay a legal representative for advice.

Cutting costs

So the current IPO policy is not helping entrepreneurs to see there is more value to be obtained from taking advice than just securing a trade mark registration.  For many, registering a trade mark is not essential initially, but, where trade marks are important (for example, for a fashion label applying its brand to clothes) then getting it right is crucial.  Such businesses should be encouraged to get legal help because a professionally drafted trade mark will be better than one they can produce themselves, and it’s an investment they are making in their business.  If they need to cut costs, then let the business itself decide what to cut.  It is not necessarily a smart move to cut out professional legal costs.

And if 80% of businesses fold in year one, then let them decide in consultation with their professional advisers whether a trade mark registration is appropriate for them.  If they don’t even have a suitable name, I’d suggest they cut out expensive branding and websites too until they’re more established.  Starting out cost effectively and thinking carefully about what you spend money on is a sensible approach.  An example of a business that adopted this strategy is Distilled.  It was known by a different name in its first 18 months and rebranded when it knew the business would be viable.

The IPO – A Competitor

Personally I now see the IPO as my competitor.  Sometimes I think: Surely there must be competition rules to protect us against unfair competition from a government funded entity?  An entity that influences businesses not to consult lawyers except in rare cases, and advises them that when they do want to consult someone: “Professionals who belong to the Institute of Trade Mark Attorneys and the Chartered Institute of Patent Attorneys are especially useful in helping you obtain and understand your IP rights”. How does the IPO justify making such a statement.  I would love it if the Law Society took this up with them.

Surely it depends what sort of IP need a business has.  In our knowledge economy where intangible assets are signficant to most businesses, not just to inventors or creatives, it’s likely that many start ups are in need of other types of IP advice.  Those setting up web based businesses (and websites are a bundle of IP rights) have copyright issues and need appropriate contracts and lawyers who understand the internet.  IP Solicitors such as my firm, are probably more able to help them with their typical IP needs than other types of IP professional.  But by directing everyone in need of trade mark or other IP help to ITMA and CIPA the IPO is not necessarily helping people to find the best person for the job.

Solicitors are skilled and experienced professionals.  The IPO does not need to protect the public against them.  The IPO should instead focus its energies on helping the public to distinguish between regulated professionals who are insured and are answerable to professional bodies from others who prey on inventors and creatives with their various IP services.

The UKIPO has a huge responsibility in this area, and should take care when making recommendations that they don’t unintentionally mark out one group of professionals as being more useful than another when they have not offered sufficient explanation to allow readers to choose what is right for them.  So, in my view the IPO needs to make some changes. It should encourage SMEs to take professional advice, and should avoid favouring one profession over another.  This is particularly important in light of the IPO’s impending consultation reported in IPKAT to identify how lower cost IP legal and commercial advice can be provided to SMEs

The problem is many of the contract templates on sale are every bit as lengthy and complicated as legal precedents used by contract lawyers. Unless you’ve got seven years of legal training under your belt, these so called “simple templates‟ can be an overwhelming place to start for the layperson!    

Even where the templates ARE written in plain English they have a fundamental flaw: It is difficult to know how to use or alter them because it’s the details of the commercial transaction which will determine how you should tailor the document. If you lack an understanding of the business context and the dynamics that would entail the need to alter a standard template how can you properly adapt it to your situation? Rarely are transactions so standard that a general legal document is adequate.  As I explained in my blog  Why use a lawyer when you can buy a legal agreement? last week entrepreneurs would do far better to just use plain English and avoid any legalese when writing their own agreements.

If you’re left to grapple with complex drafting alone and then there’s a dispute on that agreement,  you are unlikely to be well positioned to contest the dispute, and it will cost you a lot more than it need do to resolve it.

You do not need to sign a piece of paper to be bound by its terms.

There are many misconceptions about contracts, including the belief that it’s necessary to sign a piece of paper in order to have a contractual relationship. That’s not the case.

When you engage someone to perform a service for you, or agree to sell something to someone, a contract exists between you and the other party whether you realise it or not. The exception is if it’s purely a domestic relationship, which the law treats differently.

If either of you put forward written terms at the right time during your discussions you would have a contract on those terms even though nothing was signed.

It’s important to realise that your email discussions, and telephone conversations are enough to create a binding contract.  If you don’t document the agreement then it will be quite messy and expensive to resolve any disputes later.

In my blog I explained how to document your own agreements informally using plain English instead of relying on bought templates. Here I just want to explain what happens if you can’t negotiate a solution with the other side and need to involve a lawyer to help you resolve the dispute.

Resolving disputes using lawyers

Lawyers start by gathering background information to try to work out the legal answers to the issues in dispute between you.  They will question you on the oral and written discussions you had with the other party before the contract was formed. Details of who said what and when will be relevant to shed light on your mutual intentions and what you “signed up to”, as will any written terms either of the parties put forward.

After building a picture of the background circumstances, the lawyers would apply their knowledge of contract law principles to your situation to pin point the time when the contract was formed in the eyes of the law.  This date would also give an indication of what terms were incorporated within it.  Your discussions or documents sent after that date are generally unlikely to have contractual effect.  It can happen that the contract is formed before people  realise it and the  legal agreement they used had no effect!

Say your dispute is about an ecommerce website being delivered late. You had engaged a PR company and incurred various other expenses relying on the web developer’s promise to deliver your site on time.  The delays left you considerably out of pocket.

Your lawyers decide you have an arguable case to claim that the other side broke the contract.  So, they would write a letter claiming compensation on your behalf.  There has to be a lot of posturing to get the other side to want to conclude the matter without resort to court.  So, the dispute will generally mention legal actions and remedies that the parties could avail themselves of if the other side fails to agree to their demands.  It can therefore be quite unpleasant to be involved in a dispute.

The other party’s lawyers will hopefully give advice along similar lines. So if you have a good case, it’s likely they will suggest their clients be ready to make an offer of compensation to you.  They may not do this straight away, but they will advise their client of the strength of your case.  When the offer is made it will probably be lower than the sum you claimed.  That’s just the way negotiations tend to go.  However, you never know whether the other party is serious or just bluffing, and risk losing the chance of a settlment each time you reject their offer.  Some correspondence will ensue before a final compromise is reached or the matter is escalated to issue of legal proceedings (which is not to say you will end up in court).

If the other side’s lawyers glean some information which they think weakens your claim, they will respond to say you contributed to the delay because of something you did (such as changing the brief) or failed to do (such as providing a list of requirements by a set date), and therefore are not entitled to any compensation, or as much compensation as you claimed and so on.   Generally, after some correspondence back and forth the matter is resolved. Only a tiny number of disputes end up in court. 

That’s not to say it doesn’t matter what document you use.  The better your documentation, the cheaper it will be to resolve disputes, and the less likely you will be to be to need lawyers to help you resolve matters.  The real purpose of a legal agreement is to achieve clarity.  It’s not just to have a piece of paper.  The reason for having a legal agreement is to encourage you to think through the details and discuss them with the other side before the contract between you is formed.  Hopefully if you are like minded you will do a deal and if you’re not, the pre-contract negotiations will highlight it so you walk away from the deal.

As an entrepreneur you will find it necessary to document many of your own agreements, and should know which ones are too important to draft yourself.

Written agreements are binding documents that define the obligations of the parties involved in a specific project. So it’s advisable if you sell a good or service, to have a clear record of what was actually agreed. Memories fade, and a written record ensures that if disagreements arise later about what was actually intended or agreed, you will have documents to look at to see what was actually intended when you entered into the arrangement.

So, should you buy a legal agreement to use when entering into a new type of arrangement?  In my view this can be dangerous because there is no such thing as a standard template.  The context in which you use a template will differ from the ‘standard’ scenario envisaged in the basic template.  So, you will need to tailor the template to suit your particular transaction.

The terms of your particular deal are more likely to be accurately reflected in your document if you avoid using a ‘standard’ template.  I’ve seen many completely rubbish agreements signed by entrepreneurs who drew comfort from the fact that they were using an existing template.  Unless you have solid familiarity with the template and know how to adapt it to suit your particular transaction it may be better NOT to use legal templates as the starting point when drafting your own agreements .  Instead perhaps use them as a guide as to what to include in your own drafting (subject to the point I make below about avoiding use of any legal terminology, or clauses you don’t understand).

If you have a lawyer create an agreement for you and negotiate and redraft variations of it, you may develop the necessary familiarity with that particular template to reuse it on your own.  But otherwise, in my experience it’s safer to record simple agreements by emailing details of the ‘deal’ and asking the other party to confirm by email that the terms are correct as written in your email. Here are a few elements of written agreements to focus on:

1. Define the scope of work.

2. Indicate exactly what is to be done by whom and within what time frame. Also indicate who determines if the work has been completed satisfactorily.

3. Establish time frames.

4. Indicate how long the agreement lasts and how you will be able to terminate it sooner if for any reason either of you want to do so.  There should be a clear exit strategy.

5. Establish milestones and indicate when payments are to be made and clarify payment arrangements.

6. Focus especially on clarity about money issues: who pays what, when and how. What happens if payment is not made on time?

Be sure to avoid using legal language unless you know really well what those terms mean.  Legal terminology if misused could have unintended consequences on your circumstances.  For example, if you intend to give someone sole rights to distribute something but use the wrong term and give them exclusive rights instead, the legal consequence is that you give the other party all the rights, and deprive yourself of the right to distribute that thing yourself.  Nor should you ever say ‘sole and exclusive’.  This is a tautology.  Each of these words has a very precise legal meaning and consequent impact on the scope of the rights granted.  Be clear whether you mean ‘sole’ or ‘exclusive’. That’s why in my opinion  it’s far better to avoid such pitfalls by using plain English.  Say exactly what you mean in ordinary language you both understand.  Whether you’re agreeing something with clients, vendors, joint venture partners, affiliates, or anyone else for that matter, by ensuring the details are documented in a style and language you both understand, it’s much more likely you’ll end up with an effective written agreement.   

The benefit of recording the terms of your agreements in writing is that you air issues upfront and sort essential details out so you stand a better chance of negotiating your own solution if things don’t work out between you.  Next week I’ll explain what tends to happen when two parties end up in a dispute they can’t resolve without the help of lawyers.

Going through this process of documenting your agreement could very quickly show if you are about to engage in business with someone you shouldn’t be entering into business with.

Obviously, complex agreements (especially where a great deal of money is at stake) should always be drawn up or reviewed by a lawyer. It would be false economy not to consult a lawyer if the transaction concerns a commercially significant issue for your business.  Otherwise you will spend ten times as much ultimately on legal fees.

Limitation periods control the length of time a claimant has to bring legal action, for example following an infringement of their copyright, and these periods vary from country to country.  In the UK, the relevant period is 6 years from the date on which the cause of action accrued for copyright infringement.  The upshot of this is that claims for compensation will only stretch back 6 years – so if you wrote a book in 2003, and it was copied and resold without your permission until the end of 2005, by the end of this year it would no longer be possible to bring a claim for the profits made from that infringement.  If the infringement continues, compensation will only be available in relation to a rolling 6 year period.  What is important is to remain vigilant.  Services like Copyscape allow you to scan the web for reproductions of your content; for images the equivalent is available through Google Similar Image Search, or Tineye; but for works sold offline, it may be less straightforward.

According to IP Asset Maximizer, more than 50 % of corporate value today lies in the form of intangible assets.  So it’s worth developing an awareness of your IP.  Every business has the potential to have some intangible assets. 

Intangible assets will comprise IP like patents, trade secrets, copyright, trademarks, and contractual relationships.  Employee knowledge is also valuable IP and is one reason why it’s worth having a know-how system in place to capture knowledge to preserve the company’s intellectual capital.

However, IP assets don’t just exist without more.  They need to be identified, captured, protected and commercialised in order to realize their value.   Whatever size of business you are, you need to manage your intangible assets. 

While the importance of an IP strategy is appreciated in larger organisations, it’s not so well appreciated at the smaller company level.  An IP strategy is just as important for smaller businesses, including early stage businesses.                                          

Some entrepreneurs, especially those in start-up mode, are skeptical whether it’s actually worth spending money protecting something that has little or no immediate value, such as their name.  An analogy to the physical world may help explain this.

If someone built a house on a plot of land that didn’t belong to them you’d wonder why they were spending time and money on such an inherently risky project.  The owner of the land could evict them at any time.  Even if the land was for sale, it would make sense to first
                                                                                                       buy it in case someone else beat them to it and bought the plot first.  Demolishing your house and finding another plot to rebuild it on would be very expensive.

So, if you don’t want to register your name as a trade mark, an appropriate IP strategy can accommodate that, and you have various choices for approaching this. Effectively, you could decide to just to build a temporary shed on the plot for now, with a view to building a house later, either on that land or elsewhere once your fortunes improved. 

Not securing the intangible rights to something like your brand name is the equivalent of building a house on a plot of land you don’t own.  It’s far easier to buy the rights at the beginning than to conjecture whether you would have strong enough rights to fend off someone else who beat you to the punch and registered the name first.   

Moreover the name you choose determines how good your plot will be to build on.  Some name choices will give you a completely clear area to call your own.  It’s as if your land were in the middle of countryside with few neighbors looking on.  On the other hand, other name choices would put you in a heavily overlooked area with the likelihood of trespassers constantly coming onto your land no matter how hard you worked to ring fence your patch.  

If the aims of the business are to first see whether it is viable before incurring costs registering rights, then an appropriate IP strategy might be to rebrand in a couple of years if the business succeeds.  However, it is a mistake to then completely neglect all IP issues.  There are some IP rights which are lost forever if not addressed in the early days. Once the business succeeds its intangible assets acquire value.

So even a modest start up needs an IP strategy.  If the business will generate IP rights which others are unlikely to freely sign over if left until the business succeeds, then the IP strategy will involve securing those rights immediately rather than postponing this.  

I hope this post will serve to demonstrate that an IP strategy is not set in stone. Its details will vary for each business, based on the industry, the available budget and resources, and most important of all, the business’ goals.

If you have yet to set your IP strategy, now might be the time to do it.  The economic climate is tough, and deferring decisions about IP protection can mean that important IP issues are neglected.  Neglect is not an appropriate IP strategy for any business.

Arguably unique in the personal computer industry, Apple exercises strict controls over every element of its product line.  This control over both the hardware and software used in its computers, peripherals and devices has enabled the company to ensure a consistent user experience worldwide, and to avoid compatibility issues which have in the past plagued other platforms.

However, this monopoly also means less choice for consumers.  Often, PC users choose to buy their own commodity hardware, put it together and install their operating system of choice.  The motivations for this are varied: some users are searching for bleeding edge performance; others are looking for value; and some simply enjoy the experience of building their own PC.

In the past a number of businesses have established themselves as alternative Mac hardware vendors – typically selling cheaper PCs tailored to be compatible with Apple’s OS X.  A recent example of such a business, fighting Apple in the courts for the right to do so, is Psystar.

Some would argue that Apple are shooting themselves in the foot by preventing other vendors from selling compatible packages that might increase the user base of OS X, sell more copies of the operating system and, possibly, sell more devices developed to integrate with that operating system.  However, Apple differs from companies like Microsoft in that it is arguably a hardware business.  Allowing hardware competitors into the marketplace to increase software sales is not good business sense for the company.  Particularly as the strength of Apple’s brand depends upon its ability to exercise strict controls over the user experience – “It just works”.

So, Apple’s software licence for OS X imposes significant restrictions on licensees.  A recent US ruling highlights the utility of software licences in enabling developers to control how their work is used.  At issue was whether the US first sale doctrine applied such that a purchaser could sell on Apple’s software as they saw fit – think buying a car and selling it on second hand.  The court found, unsurprisingly, that customers are not buying the software itself – they do not own the software after they buy a disc holding a copy of OS X, or download it – they are merely granted a licence to use it subject to a range of restrictions.  The terms of the licence they are granted preclude its use on other hardware.

This is bad news for Psystar but, as Groklaw points out, good news for proponents of Open Source Software.  It affirms the (albeit widely accepted) presumption that a US purchaser of open source software is not entitled by way of the first sale doctrine to resell it on their own terms and thereby circumvent an open source licence.