IP (Intellectual property) rights can be a business’ most valuable asset. For example, Forbes magazine reported that while Disney’s 2013 hit Frozen grossed US$1.3 billion at the box office, the licensing of the IP rights accumulated US$107.2 billion in retail sales. Lucasfilm’s astute decision to retain IP licensing rights for consumer products for the first six Star Wars films helped George Lucas become a billionaire.

A business may have a brand, a unique concept, or maybe even a new idea; instead of shouting the details of this valuable knowledge from the rooftops, the first step is to formulate a plan and brainstorm ideas to market and commercialise them. This plan is essential to ensure IP rights are protected, and to achieve the best commercial outcome.

The term “intellectual property” does not refer to a single item; rather, it’s an umbrella term that collectively refers to many distinct forms of rights. These individual forms of IP rights can include (but is not limited to) trademarks, designs, patents, copyright, marketing concepts, “know-how,” and of course, trade secrets.

Once IP has been identified and defined, it can be protected, or others can be allowed to use it for a fee. The fact IP rights can be traded or dealt with provides a starting point for how these rights can be protected in a contract or licence.

Unlike other property or assets, when defining IP rights, the specific characteristics and “what needs to be protected” will determine whether a trademark registration, design registration, or licence agreement is needed. Other considerations include:

  • IP rights are intangible, meaning they require careful identification and articulation in a contract.
  • It can be difficult to verify ownership and provenance of some IP rights (particularly copyright) which subsist without formal registration, and may exist only in someone’s mind, lacking substantiation or form.
  • The fact IP rights are more vulnerable to being extinguished than other property poses significant risk. For example, if a registered trademark is not used by the owner for a continuous period of three years, it is vulnerable to cancellation. Similarly, if a patented invention can be shown not to have been new at the time the patent was granted, the patent can be revoked. If work is not sufficiently original, its copyright can be vulnerable.

Examples of situations in which IP enforcement can arise – but only if IP rights have been appropriately registered – include:

  • IP is used without permission or inappropriately, and the rights owner wishes to stop them;
  • The owner of intellectual property rights claims their IP rights have been infringed.

Enforcement methods will vary depending on a number of factors, including the type of IP and whether the action arose before or after the grant of a registered IP right. Good strategies for protecting IP will also assist the effectiveness of any enforcement action.

Rankin Business Lawyers provides expertise in intellectual property law. Contact us now for advice on how to manage intellectual property and to discuss your business’ IP licensing requirements.

Stacey Brennan
Lawyer