The importance of intellectual property
The principle of Intellectual Property (IP) protection is that there is value in the output from research, writing and the creative arts. The point is that this output is very easy to copy. If there's no protection, then there's no point in creating intellectual property, to the detriment of the whole economy.
IP is a specialist subject, and IP lawyers are expensive. But for companies with big ambitions, protecting IP is crucial. For instance, whenever you raise finance or try to sell your company, the investors will want to be sure that all of your assets are protected.
Some of the issues that can be faced include "passing off" (where a company pretends to be you), theft of text, images, photography and designs, competitors advertising using your brand, and rogue use of your name implying a false relationship.
For a catalogue or online store operator, the major IP issues are around the theft of catalogue materials, the use of domain names that try to leverage your brand and advertising on your brand.
Deciding on your brand name
If you are starting a new business, or a new brand within a business, it's worth thinking about IP issues up front. Obviously your brand needs to convey the image you want, but there's more to think about than just that.
Unique or less common names can be found more easily online so rarity has value. It will be much easier to trademark unusual or made up words widely. You should choose a brand where popular domains such as .co.uk and .com are available, and the brand should not have unfortunate associations in any major language.
Over time, you will build value around your brand, and you must defend it. Otherwise the courts may later rule that you have lost that right.
Methods of protection
The methods of protection are patents, trademarks, copyright, registering URLs and other online identities, establishing design rights and contractual protection. Patents are the hardest and most expensive, and require specialist advice. They have little relevance to the catalogue and E-Commerce industry so they will not be considered further within this article.
Contracts and copyright
In contrast to patents, copyright is recognised internationally in a consistent way, is granted automatically and can be sold or licensed. So if you, or your staff create IP covered by copyright law, it's good news.
The big hole in this protection is when someone who is not an employee creates the IP. Unless you explicitly cover this in a contract, you will merely possess an implied licence to use the IP. In fact, the originator is free to license it to others, despite the fact that you paid for it.
To protect yourself, you should have a contract that ensures that any non-employee or company involved in writing, design, photography, artwork or programming, signs a contract that assigns the IP to you as it is being created. You should also insert a clause that indemnifies you should your supplier infringe a third party's IP.
You should also ensure that contracts of employment assign all IP created on your equipment, in your premises and connected with your business. This avoids the claim that staff were working on something out of hours, so it doesn't belong to you.
Trade marking your brand is the key to many other protections. Trademarks embrace words and logos and can be registered for a few hundred pounds - see www.itma.org.uk.
Registering a trademark gives you the right to stop others using the mark on the goods or services for which the mark is registered. This protection lasts forever, provided renewal fees are paid.
Successfully defending a trademark largely depends on getting it right in the first place. In the case of my own company there were particular complications. The word "Sellerdeck" has legitimate commercial use to describe a type of radiation, so we couldn't trademark the word across the board. Instead, we trademarked the name "Sellerdeck" in relation to computer software and services, and have found that this has provided adequate protection.
Design rights cover the appearance of whole or part of a product, including the shape or the decoration applied, logos and other designs. In the UK, designs are protected by registered designs or unregistered design rights.
A registered design lasts for 25 years, and is similar to a patent. You can then mark products and literature with the registered design number.
You automatically have unregistered rights. You can make this more secure by sending the design to your solicitor and asking them to record the date that it was received. That way, you can prove the original date. In the ideal world, these protective measures should be carried out before you started trading.
The online world
When infringements happen via a responsible website, such as Google or eBay, website owners usually operate IP protection schemes and are generally prepared to help. Having a trademark is a prerequisite to joining these schemes.
The most obvious IP issue online is in the use of URLs and the equally most obvious defence is to own the domain names and main variants, which could include .info, .biz and common misspellings.
When domain names first arrived, many companies did not realise their significance and were slow to assert their rights and the industry was unaware of the issue. Nowadays, if someone is using a domain in a field where you have a relevant trademark, you should be able to get the domain registrar to transfer the domain to you.
The same issue is now occurring on Twitter and other social media sites. Vogue magazine has recently fallen foul of this "Brandjacking" after a third party obtained an account for "Vogue Australia" on Twitter. Twitter is sympathetic to trademark holders and will generally take action if someone is impersonating you or your brand. However, they allow parody, so the account may just have "Not" or "Fake" added to the front. Remember that if you open a Twitter account to defend your brand, it will be closed if it has not been used in six months.
Although Google and Yahoo allow pay per click (PPC) advertising on a brand by competitors, a decision is pending from the European Court on this subject (Interflora versus M&S). This may well lead to PPC advertising being disallowed on trademarks. Google do actually have an "Adwords trademark complaint" service which allows you to object to advertisements on your trademark, provided the advert is taking the prospect to a site which is not directly relevant to the search term. My company has used this service very successfully.
Selling the business
If you are ambitious, IP will matter, and if you are successful, your IP will be abused. When you come to sell the business, having your Intellectual Property clear may impact the price and even make or break the deal.
The key lesson is to have chosen your brand and company names carefully, defended them regularly and made sure that you have 100% ownership of your online store, catalogue and their related assets. This needs to be backed up by a paper trail.
It's a great idea to get some legal advice early, or do a lot of personal research. If you are at all successful, this will save a huge amount of time and cost at a later stage.
Chris Barling, CEO of E-Commerce & EPOS supplier, Sellerdeck. Originally published on catalogue e-business.