On World Intellectual Property Day, we're breaking down the top 5 mistakes companies make when it comes to IP.

1. Thinking your business doesn’t own any IP

All businesses own IP, not just companies that have invented a product. Patents are not the only IP asset a company can have (although they are often seen as the most valuable). Copyright can protect a wide range of outputs including website articles and reports, intellectual property rights can cover business databases and most commonly your company name as well as your product/service name can be valuable trade marks . Registering those trade marks is not essential but is certainly recommended. This can prevent a third party copying your name and benefitting from the “goodwill” in that name that your company has built up in the course of trading.

2. Not owning all the IP you thought you did

This is a very common pitfall. When investors are thinking about investing in your company, they will want to know that the company owns the key IP it uses and that there are no issues with it. So it is worth considering who has generated IP for the company. IP generated by employees as part of their employment is owned by the company but often third parties such as consultants will have been engaged in work that resulted in IP being created (e.g. software developers, website developers, logo designers etc), If you employed a consultant or other third party make sure they have assigned over all the IP they created as part of their services. Why is IP so important for investors? Investors see this as a competitive advantage, protection against competition, and an asset that can be sold or licensed regardless of the company’s success or failure. This means there is a lower risk in investing money into your company, and by mitigating risk the company is more attractive for investment.

3. Not checking you are safe to use a business or product name

This can be a very costly mistake to make, particularly for early stage companies who need to focussing their energies into driving the business forward rather than getting embroiled in trade mark infringement disputes. It is a common mistake but easy to avoid. Firstly, don’t assume that just because you have managed to register your company name at Companies House that this creates any IP rights in your favour. It doesn’t. Companies House does not operate a trade mark register. Therefore, you should always carry out checks on the name you are proposing to use for your company name or product name. Lawyers and trade mark attorneys can help carry out detailed searches but you can also do your own desktop search checks including checking the online trademark registry at the Intellectual Property Office. And if you want to trade abroad consider engaging a trademark agent to conduct a freedom to operate search in the country where you may sell products. And if you are in any doubt about whether a third party might have existing rights in a name you want to use, you should take advice on the matter.

4. Not using NDAs properly to protect your IP

Requesting to have an NDA signed when you’re sharing proprietary information is of course good practice, but you can’t force someone to sign one. Nonetheless, disclosing confidential information without an NDA in place is risky. Although the law allows you to imply an obligation of confidentiality in the absence of a written obligation, you need to be able to prove that it was reasonable in the circumstances to do so. Much safer therefore to use an NDA. If the other party objects and you feel you still want to disclose confidential information to them you should be very cautious about what and how much you disclose. You certainly shouldn’t disclose confidential information which relates to patentable technology you have developed as this could ruin your chances of patenting that technology.

5. Not having an appropriate written agreement in place to cover use of IP

With all the costs that developing a new product or service can incur, it is easy to overlook the importance of having a solicitor draft or review key contracts that a company may have in place. For example, if you are collaborating with a partner to develop new IP, a contract should be clear on the ownership of that IP and also the rights to use it. Jointly owning IP sounds equitable but can be limiting and difficult to manage. Equally you want to ensure that the key customer contracts you are using to commercialise and exploit your IP are robust and fit for purpose. Cutting corners by not having documents drafted or at least checked by qualified professionals could lead to costly disputes later on, and problems with investor due diligence.

If you think your company could benefit from an IP audit, or if you would like to chat to a member of the IP team on any of the above matters, please feel free to contact us.