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Intellectual Property Guidelines
 
Intellectual Property - that is trade marks, patents, copyright and design registration

This is the first in a series of articles that will be of interest to readers thinking of starting a business, already in business, those contemplating exporting and others eyeing the Internet. They will provide essential guidelines in relation to the many aspects of Intellectual Property - that is trade marks, patents, copyright and design registration. They will spell out the many costly pitfalls that await the unwary and highlight the huge opportunities for those who cleverly exploit the potential.

Kicking off on the right foot

There are a number of issues which, anyone contemplating starting a business to supply products or services, should be aware of, because ignorance of them can have dreadful consequences.

There is a misconception that having a limited liability company name or business name registration allows use of that name and provides trade mark protection. Not so! The only way to obtain exclusive rights to, and protect, the name under which you wish to trade is by way of trade mark registration.

A trade mark provides exclusive statutory rights so that a rival cannot legally use an identical or confusingly similar trade mark to an earlier registration. Similarly, if you infringe, then all the investment in design, printing and promotion may be wasted.

The golden rule therefore must be, at the outset, do not attempt to market goods or services until the identity under which you intend to trade has been cleared for use. That is, that it does not conflict with an earlier trade mark registration in the target market.

Therefore it is essential that, before using a new identity, a search is made of the trade mark registers in the target markets (be that Ireland or further afield) to ensure that it does not infringe the rights of others. Expert advice, such as that of a Trade Mark Attorney, is advisable because what appears to be clear to the untrained eye may, in fact, conceal a sustainable objection from a rival. Once it has been established that the way is clear the mark should be applied for registration immediately and so secure the position.

Any existing businesses who have not as yet registered their portfolio of trade marks should do so now. As will be shown later these are valuable assets and, if exploited fully, can be of enormous value. It is also worthwhile examining how these can be extended through registration into other classes of goods or services and the new potential for additional branding. It also feasible to apply to register, not only names and symbols, but also, slogans, colours, shapes and even smells.

As a slight aside, but to prove a point, the Walt Disney Company holds no direct ownership in Tokyo Disneyland. However, it licensed the use of its characters for five per cent of the gate money and ten per cent of the sales of merchandise, food and beverages.

It is essential to apply to register your trade mark at least in the home market, Ireland.

Utilising the Community Trade Mark (CTM) it is now possible, with only one application, to apply to register a trade mark in all 15 countries of the European Union. Anyone who currently trades, or intends to trade, in the EU in the foreseeable future should seriously consider this option. This facility has an added benefit in that when one successfully secures a CTM registration, it is only necessary to use the mark in ONE of the 15 countries to maintain exclusive protection in all 15 member states. This opens up huge possibilities for the entrepreneur.

The costs involved in both the national and CTM options are very modest. In Ireland, about €500 is required on application, with the same amount in perhaps 12/18 months at registration. These figures increase to about €1,500 in the case of the CTM with a lapse of more than 18 months between application and registration. In both cases the period of cover is for an initial 10 years and is renewable.

One of the biggest selling coffees in the world started out as the brainchild of an American salesman. His spare time labours resulted in his developing a method for making instant coffee. Rather than put his own name on his creation, he called it after the first hotel to stock his product, Maxwell House. His family name was, by the way, Cheek! A brand that has become a run away success is Nike and small wonder, it is called after the Greek goddess of victory and who would argue with a woman? When the founder’s favourite song is the classic Al Jonson best seller “Sonny Boy” and Sonus is the Latin for sound who would object to Akio Morita calling his company Sony? Two famous trade marks - protected world-wide by registration!

Liam Birkett

Before you set sail or sale

As was said in an earlier article, everyone should ensure that the name under which they trade/intend to trade is free for use and, if so, should take steps to register their trade mark. We now look at the prospect of exporting those goods or services.

Even if expansion into EU countries is not contemplated in the immediate future,

one should seek registration in any field of activity where there is a possibility of use.

By covering these additional product/service classes in target markets, the businessman gives himself the opportunity to get on with current matters while preserving future options. Moreover, by virtue of multi class filings, in a market place as big as the EU, the intrinsic value of the original trade mark is enhanced.

Many foreign companies are availing of the CTM facility ( at last count it was in excess of 200,000 and growing each week), and so it is imperative that companies in Ireland protect their national interests at least. Otherwise someone with the same or confusingly similar identity may obtain registration before the indigenous user. Then the burden of proof falls on the complainant to prove, in a court of law, that his goodwill is being damaged by the new entrant; an expensive and time consuming exercise, with no guarantee as to the outcome. The simple way to avoid possible lengthy litigation is to seek to register now!

By the same token if one moves speedily, and secures CTM registration, a plethora of possibilities await. Not only is one faced with a protected environment for personal expansion but also the prospects for franchise arrangements and licensing agreements.

As your horizons expand you need only repeat the same steps for each new market. Go through the same process of searching the target market to ensure you are not infringing the rights of others and then file registrations in respect of your portfolio of trade marks. As time passes you may end up with registrations in all the major countries in the world. These will need to be renewed every ten years but can be maintained in perpetuity thus creating brands of immense value.

There are many examples of how strong branding can reap its rewards. The Coca-Cola Corporation had a market capitalisation that was valued at circa $115 billion when its net book value was nearer to 10% of this figure. Likewise when Nestle was purchased by Rowntree the latter paid most of the $4.5 billion price tag to get its hands on the powerful portfolio of brands in the Rowntree stable.

At its simplest, the market value of a firm is the net present value of all future cash flows expected to accrue to the firm. As a result, a large proportion of the value of a firm is based on its growth potential, which in turn is enhanced by its brands. Brand valuation is therefore now beginning to confirm that brands are centrally important and enormously valuable corporate assets. Brands create trust, goodwill and ultimately loyalty. It is the loyalty that delivers sustainable income to the companies that own or acquire brands.

There are many examples of Irish Brands that now hold centre stage in any international line-up. Irish companies, through self-development and acquisition of foreign brands now enjoy an eclectic list of trade marks whose value grows with each passing year. Many an Irish entrepreneur has gone on record to say that he bought companies to get his hands on the brands rather than the products themselves. There is a lesson in that for all of us.

Liam Birkett

Oops, I thought it was mine

New start up Internet companies who value their names or have clever names should take immediate steps to register them as trade marks. If they fail to do this they may quickly build up recognition in the minds of consumers which other, more alert, marketeers may exploit. Registering a domain name does not give proprietary rights!

Because of the huge coverage provided instantly by the World Wide Web, a new domain name can very quickly become the buzzword on the lips of literally tens of millions of consumers. Many of the new Internet companies hit the headlines for a variety of reasons, the goods or services they make available, the insatiable demand for their shares or the personalities involved. The common denominator throughout all this is the domain name and this will be repeated time after time in all the media, newspapers, radio and TV. The name almost takes on a life of its own. One thing is certain, notwithstanding the money that may be spent on commercial advertising of the site, the gratuitous promotion of the name by the various media can be immense.

For this reason the owners should be aware of the potential, and pit falls, associated with this enviable notoriety. They should examine the possibilities of their branding goods or services with the new name. To this end it is worth reflecting on the merits of trade mark registration. The purpose of a trade mark is to distinguish the goods or services of one competitor from that of another. This protection also extends to the prohibition of a rival mark which is identical or confusingly similar to the registered mark - domain name registration does not.! Moreover, the exclusivity is territorial, that means it has effect in every country in which the mark is registered. There is also a Community Trade Mark (CTM) facility, which, with just one application, can provide exclusive rights throughout the 15 member states of the European Union (a market of 370 million consumers which will grow to 500 million when the new entrants come onboard). Therefore the owner of the domain name can utilise this protective mechanism to secure trade marks rights for whatever goods or services he has honest intent to brand with his name in whatever markets he envisages exploiting in the foreseeable future. This now adds not only increased value to the new name by virtue of the breath of cover but also open up great possibilities to expand usage by way of licensing agreements and the like.

On the other hand if these provident steps are not taken then the potential can be usurped by others. Should someone else, in the early days, recognise the potential which the popularity of the name provides and moves to register it to his own ends, then the possibilities can be lost forever for the originator.

So, although any start up web based company may only have its sights and aspirations focused on the Internet it would be foolhardy and costly to overlook the wider picture.

By the same token anyone who has created a clever name for a non-web based business and fails to apply to register can also receive a rude awakening. Consider this scenario; you have a new branding which goes, unprotected, into the marketplace. Someone else sees it, thinks “that’s clever” has a search done of the trade mark register, finds the way clear then files on his own behalf for a similar class of goods or services. Once the registration comes through, which may take up to 18 months, he can go to the original, unregistered user and legally insist that they cease usage of his now registered mark.

Liam Birkett

Being inventive need not be a taxing matter

The other side of Intellectual Property (the overall title for such things as trade marks, patents, copyright and design registration) is patents. These too can be highly profitable.

Far too many of us believe that being creative is way outside of our capabilities and, to be an inventor, one must be an Einstein. This is far from the case. A huge number of the best known inventions were developed by people who came from different walks of life to the subject matter they created.

It would be fair to assume that an engineer invented the ballpoint pen but in fact the idea was developed by a Hungarian hypnotist. Equally surprising are the inventors of the following list: Frisbee, a building inspector; Monopoly, a heating engineer; Photocopier, a land-claim official; Brillo, a manufacturer of costume jewellery and the Telephone Answering Machine, an American businessman!

Therefore, if the likes of these can do it why can’t you? Every day in manufacturing, for instance, people come up with novel ways to get the job done. Oftentimes, this is merely to overcome an obstacle, get it out on time, and rush onto the next task. But the same applies to everything from farming to services. Something is put together to solve a problem whether that be using a piece of farm machinery or implement in an unusual way; coming up with a new way of fixing a garden hose or stopping a pot from boiling over on the cooker. If these are of use, and solve a known, regular problem, then they are of interest to others who encounter similar difficulties.

Many inventions are improvements on existing items and/or combining two known elements from other areas in a novel way in another. You should also realise that simplicity is no objection to patentability. In addition, there is an advantage in “being first and brand it”. You can apply for a patent which allows you to put “Patent Pending” on your invention and this may dissuade others from coping you for fear of infringing your patent. Then launch your product under a trade mark which you have registered. The potential rivals will not know the details of your invention for at least 18 months and this will allow sufficient time for you to establish your product on the marketplace and have the public become familiar with your trade mark.

The life of a patent is usually 20 years, so if royalties can be attached then a positive cash flow can indeed be rewarding. This can be all the more attractive in an Irish context because, under certain circumstances, royalties from anywhere in the world can be free of Irish income tax.

Back in 1968, an inventor, Ron Hickman, filed a patent for “A workbench”. At first he could not interest any company in his invention, in fact, Stanley Tools reckoned the product might sell in dozens rather than hundreds. Ron started to manufacture the workbench himself in his own garage and market it under the name WORKMATE ( a name he rightly registered as a trade mark). Four years later Black & Decker agreed to manufacture and sales began to explode. Ron wrote a small book detailing his story in which he recounted Stanley Tools’ observation. He was happy to point out that, at the time of writing, the 10 millionth WORKMATE had been sold! That was in 1981 and, it is believed that, through various improvements to the workbench, patents are still in force to this day.

If you do have something that you think might be the basis of an invention there are some basic rules and guidelines about which you should be aware. In the first instance, do not disclose your invention to anyone, except in confidence. Discuss the details only with an experienced European Patent Attorney who will be able to assist in assessing whether the concept could be subject to patent protection. If this proves to be the case then a detailed specification can be drawn up and filed immediately. A ballpark figure for this part of the exercise is €1,000. There are then 12 months, before a final filing, during which you can amend any details of the invention, decide in which countries to file and arrange the necessary finance. In the meantime you are free to disclose the invention virtually world-wide with impunity.

In conclusion, do not dismiss any ideas you may have, out of hand. Remember that many of the world’s great inventions came from people just like you. There is great satisfaction, as well as financial rewards, in bringing into being something that you have devised that is benefit to others.

Liam Birkett

Don´t turn up your nose to a strong identity

You will remember in an earlier article you read about registering trade marks. Well let’s take that a stage further and list the sort of things that can be protected by registration. In addition to names and symbols, slogans, colours, shapes and even smells can be exclusively yours by applying to register them as your particular trade mark. The variety that raises the most eyebrows is smells. Some examples of applications to date are; the smell of lavender in respect of automobile tyres by a Japanese manufacturer, the smell of stale beer for the flights on darts and tennis balls impregnated with the whiff of newly cut grass.

Now, a brand new wave of odours are making their presence smelt in the marketplace.

Some enterprises are spraying the air of their establishments with a distinctive fragrance that they hope will support brand awareness amongst their customers. That well known retailer of expensive shirts THOMAS PINK has chosen air dried linen as its olfactory mark and some stores in the United States are currently being used to assess client reaction.

The first class and business class lounges in BRITISH AIRWAY’S locations at London and New York airports are now sprayed with meadow grass so that the company’s high flying clientele will experience a stronger brand awareness as they linger between flights.

In an effort to capitalise on these growing needs of the marketeers, new forces are being called into play and companies are being formed to exploit the burgeoning demand. There are now sensory design research laboratories emerging plus commercial interests who concentrate on meeting a variety of requirements.

Some of the marketing giants of soap powders and the like are interested in being able to get prospective users of their products to enjoy a whiff before purchase and appeal to the pocket through the nasal passages. To this end a US point of sale company has developed a method of applying advertising patches to the floor of supermarkets, which, when walked on, will cause to be emitted the smell of an adjacently merchandised product.

Already, a wide selection of other marketeers, from after-shave to coffee suppliers are examining the potential to highlight their offerings, where it matters, at point of purchase.

Research is now being expanded into wider applications and the notion of having cash desk computer printers that can emit odours when, for instance it is dispensing a receipt. This marketing device could be used to prompt customers to purchase another product that is being promoted in store.

And then there are sound trade marks those that assist you to recognise brands by assaulting the ear. You may not realise it but there are many sounds in your daily life that you use to alert you to what’s happening. For instance, you’re in the kitchen and hear the signature music for Fair City, so you rush into the living room to watch the programme; a simple example of a possible trade mark since that particular music is used to distinguish one offering from that of another. J S Bach’s “Air on a G string” has been registered as a trade mark by the manufacturers of HAMLET cigars. The sound of a certain dog barking helps identify, and brand, DULUX paint while the unmistakable noise made by the exhaust of a HARLEY DAVIDSON is registered a its exclusive trade mark.

For those in the field of marketing, begin a New Year by considering how you can utilise these additional forms of branding to augment the products or services you promote. We should not lag behind in this country but avail also of the publicity that will attach to those who are the first to file these novel forms of branding. You never know, you might get a mention in an article such as this one!

Liam Birkett

Put a price on "new" and exploit it

A whole new series of metrics appear by which businesses are valued and judged. These have turned conventional wisdom on its head. Now, some of the most sought after shares are those of companies that have lost, and continue to lose, millions of dollars every month from inception. Many of these concerns have no tangible properties such as buildings and transport they are purely clicks and mortar.

The catalyst for this change has been the internet. A classic example being Amazon.com which now offers for sale almost anything under the sun via the world wide web.

But the past holds many examples of how innovation radically changed how we perceive and utilise that which surrounds us. In so doing fortunes have been made by those who saw that their time had come and reacted promptly. Let's go back 100 years.

Thomas Edison, inventor of the electric light bulb, experimented with electricity for many years before the introduction of his product. He bided his time until the critical mass of urbanisation justified the investment of resources and provided the consumer market on which to capitalise.

A jeweller, Otto Rohwedder, in the early days of the 1900s, was a man who was fascinated with the concept of having a sliced pan. His efforts and idea was of little avail until 1925 and the introduction of a bread wrapping machine. He filed for a patent in 1928 and within a few years 80% of bread sold in the United States was pre-sliced. However poor old Otto died in 1960 without realising a fortune.

In 1904, New Yorker, Thomas Sullivan (he's got to have Irish connections) to save money on the tin boxes needed to send out his tea samples, used tiny silk sacks instead. His customers (probably not Irish) put these bags into the tea pot and, unwittingly, invented the tea bag!

A secretary, in an effort to cover up her typing errors, took to using a tab of white paint. With a little help from her friends she perfected this somewhat and marketed it as Liquid Paper, selling it in some 30 countries. In the late 1900s she sold out to Gillette and was worth more than $50 million and continued