IP ownership and exploitation

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IP ownership and exploitation

We work to help you generate revenue from intellectual property ownership and exploitation. We offer you expertise at all stages of the intellectual property ownership and exploitation cycle from creation of the asset, raising finance through to sale. 

Most of our clients are involved in businesses reliant on intellectual property ownership and exploitation such as technology, media, creative, design and retailers.

Maximising intellectual property revenues

You can usually improve the exploitation or revenue generation arising from ownership of intellectual property by reviewing:

  • The structure for revenue to be generated from your intellectual property; and
  • How to make your intellectual property saleable.  Saleability starts with revenue generation from licence agreements during your period of ownership through to sale proceeds upon sale of your business.

Selling your business

The  sale of your business will require proof of ownership of all intellectual property. You will find it much easier to establish ownership of intellectual property at the point of creation of the asset.

Problems with others claiming ownership of your intellectual property most frequently arise when there is a sale on the horizon.  A sale can bring the lure of a quick gain for others at your expense.

Setting up the structure for revenue to be generated

Intellectual property revenue generation flows from a variety of avenues.  We look avenues such as:

  • What, if anything, needs to be registered. We consider registration of:
  • For IP that has already been registered, is the registration is still valid. Connected with that exercise is a review of whether existing intellectual property ownership is in form of the best registration you can obtain. Sometimes, existing registration is worthless for a variety of reasons.
  • Whether the agreements related to generation of revenue are up to the mark.  Typical agreements we review include patent licences, R&D agreements, manufacturing, supply and distribution agreements, collaboration agreements and, technology transfer agreements.
  • Can new models for revenue generation such as licensing, franchising, merchandising, joint ventures or outright IP sales be introduced.
  • The corporate structure and making it attractive for future investment.

Ring fencing

Ring fencing means that intellectual property ownership is separated from revenue generation often via a separate company.  A licence agreement enables the ownership of intellectual property to work with the trading entity.

  • Ring fencing can safeguard the intellectual property assets against the risk of insolvency.
  • Ring fencing is also used when there is a sale of the trading entity or IP ownership entity as separate businesses.

Establishing ownership of intellectual property

To claim entitlement to revenue from your intellectual property you need to be sure that you can prove ownership. The lines of ownership of intellectual property can become blurred.  Blurred lines can and weaken your negotiation position and the revenue generated.

Intellectual property ownership can be broken down into two camps:

  • Establishing ownership when the asset is created; and
  • Protection of the intellectual property if someone is infringing it or taking your revenues.

Establishing ownership of your intellectual property

Ownership of intellectual property can be established by you via a variety of tools. For example:

Establishing ownership via commercial agreements

  • When the asset is being created or developed the agreements need to reflect your ultimate ownership.
  • When the asset is being exploited, usually by sale via licence agreements, the licence agreement needs to establish your ownership.

Establishing ownership via registration

  • Ownership for some assets is capable of registration.  For example, trade marks, design rights and patents can be registered.
  • For assets which are not capable of registration you will need to rely on commercial agreements.

Using the system of registration to your advantage

The system of registration of intellectual property for trade marks, design rights or patents can be worked to your advantage.  The advantage gained is that ownership can be secured.

Protection of intellectual property ownership can take place in a number of ways such as:

  • Oppose a trade mark application – before it is registered
  • Apply for a trade mark to be revoked – after it is registered
  • Apply to a trade mark to be invalidated – after it is registered
  • Apply to rectify a registered trade mark
  • Prevent others from passing off their goods as yours
  • Anticipation of infringement in the legal agreements.

Exploitation and ownership of the brand

The brand is often the key revenue generator resulting from the ownership of intellectual property.

A strong brand may comprise several intellectual property assets, all of which will need to have protection built in.  A typical strategy will consider:

  • Intellectual property assets capable of registration; and
  • How to protect other assets forming part of the brand.

Assets forming part of the brand which cannot be registered

Some intellectual property owned by you, that makes up your brand, is not capable of registration in the sense of placing the details on a public register.  Often such assets are capable of protection by other means. Most commonly the solution is to carve out rights in commercial agreements.   For example, confidential information is most usually protected via agreement.

Confidential information and trade secrets

Confidential information is usually protected by a confidentiality agreement.  Marking a document “confidential” is sometimes not sufficient to protect the information. Revenue generation from IP ownership can be more secure if the commercial agreements go into detail about what you regard as confidential information and a trade secret.

Managing corporate reputation

You can be liable for your employees’ actions. There are a number of strategies you can deploy such as:

  • The business should have appropriate internal policies in place to mitigate your risk of being held responsible for your employees’ actions.
  • Most businesses publish company and product information online.  If content damaging the corporate reputation is posted anonymously, we can obtain a court order to identify the poster. We then claim damages for defamation or passing off.

Portfolio management

No intellectual property registration lasts forever. You will need to monitoring and review intellectual property on a regular basis.  This is time consuming and you may not know what to look out for.  We therefore offer a service to help you. Our services include:

  • Registration of intellectual property rights across multiple jurisdictions;
  • Market research to identify the best avenue for exploitation;
  • Continuous assessment of the scope and strength of your registered and unregistered IP; and
  • Monitoring for infringed goods online to ensure no one is utilising your intellectual property without your consent. This is important in order to protect your business and particularly your brand.
  • Compliance with legislative frameworks including Portfolio renewal, plus informing you about legal developments.

Taxation of intellectual property

The disposal and licensing of intangible IP assets have inherent tax implications. During the heat of the deal, tax considerations are often ignored. However, you can avoid adverse tax charges by using the right deal structure. We will help you find the right structure for your situation.

Intellectual property ownership and exploitation recent cases

Most commonly, clients want to know all of the IP used in the business is protected and directed towards revenue generation. We get involved in IP protection across the range of assets as indicated below.

  • Confidentiality agreement– we reviewed a confidentiality agreement for an innovative tech start-up. This agreement enabled our client to pitch to high net-worth individuals.  We registered our client’s intellectual property and know-how, and protected it from passing off. He in turn secured investment.
  • Copyright protection – we advised on copyright protection for creative musicians. Their works were created for a series of successful concerts. We documented the group’s rights to prevent future passing off.
  • Franchise agreement – we ran the grant of pan-European franchise agreements across multiple markets.  We acted for the franchisor on a retainer. The key issue was competition law to prevent monopolisation.
  • Intellectual property rights registration – we dealt with the intellectual property right registration for a computer software company. This enabled the company to assign its intellectual property from the date of registration.
  • Joint venture – our drafting of the joint venture agreement safeguarded a digital media company in its joint venture with a marketing platform. We drafted the agreement that catered for complex IP rights.
  • Licencing – we set up a subsidiary to hold all the parent company’s intellectual property. In future, the subsidiary will grant licences to the parent company.
  • Taxation – we worked with the accountants to claim research & development tax relief for UK car manufacturer’s passenger safety product development.
  • Trade mark and design rights registration – we helped a comic book publisher register their trade mark and design rights. The publisher required protection across the EU. We demonstrated that the publisher’s designs contained the required level of distinctive character.

Intellectual property rights are intricate. Non-registration or incorrect registration can allow competitors to exploit your intellectual property ownership.  By protecting your intellectual property, you are creating an asset.  By choosing the right model to exploit your intellectual property you are ensuring income and brand recognition. Expand your business with watertight agreements.