Intellectual property rights (IPRs) exist, to a different extent, in every business and protect certain intangible assets being inventions, designs, artistic or literary works or software. 

IPRs are generally divided into two categories: registered IPRs (such as patents, registered trademarks, registered designs) that provided that certain formalities have been observed, grant a monopoly right to the owner of the relevant rights ensuring that only the owner can exploit and enforce the monopoly rights in return for the owner’s investment of money and time and unregistered IPRs (such as copyright, unregistered design rights and database rights) that arise without the need for any registration or other specific action by the owner provided that the relevant asset has certain characteristics. They do not create a monopoly and it is possible that two similar works are independently produced by different owners and valid unless “copying” has taken place.

Failure to identify and protect IPRs may cost a business more than “just revenue or profits”.  For example, it may find that having spent considerable resources in collaboration or on a research and development project with other parties, it is unable to make full use of the final product because it does not own the underlying IPRs. If the same business goes on to commercialise the developed product it could be exposing itself to an infringement claim with the dear consequences briefly explained later in this article.

In a less disastrous scenario, knowing what has been created in other parts of a group of companies can create significant economies by sharing using what is there.

Correct use of IPRs plays a critical role in preventing that a business infringes the rights of a third party’s and in stopping infringement by third parties of rights owned or used by a business.  An adverse judgment in an intellectual property court action in addition to payment of damages has also a real business effect;  for example, in a patent related action the business may have to stop selling the infringing product or using the infringing process and incur the related costs in finding alternatives, suffering loss of market to competitors and adverse PR.  In a copyright/design action the business may have to re-design and also lose part of its brand and goodwill and, in a trademark action, the business may have to re-brand with similar problems.  An adverse trial result has a potentially damaging effect on a business by way of reduced prices, reduced market share and losses against any competition. All of which may affect further future investment in the business or its expansion plans.

Steps that the business can take to protect itself and its intangible assets range from ensuring that employees’ contracts contain the appropriate confidentiality and intellectual property provisions, adopting clear guidelines for its departments and subsidiaries (including policies for research and development), and the publication of papers and notification of claims, to entering into non-disclosure agreements and other appropriate agreements to ensure that copyright ownership vests with the company, obtaining the appropriate licenses and confidentiality provisions before a patent application is submitted, and generally monitoring and ensuring that the business strategy coincides with its intellectual property strategy.