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Module 4: Intellectual property and commercialisation

1.1 Types of intellectual property

Within Australia, a number of forms of intellectual property are afforded legal protection. Some of these are protected under legislation (the various acts including the Copyright Act, Patents Act, etc.). Other forms of intellectual property are protected by ‘common law’, that is legal principles that are developed based on precedents established by previously decided cases concerned with similar facts (e.g., cases involving passing off and treatment of confidential information).

  • Patents
  • Designs
  • Trade marks
  • Copyright
  • Plant breeders' rights
  • Circuit layout rights
  • Trade secrets/confidential information
  • Passing off
  • Business names/domain names
  • Open licensing/open source.

1.1.1 Patents

Patents are granted for inventions which may be thought of as new solutions to technical problems. According to IP Australia, patents cover "any device, substance, method or process which is new, inventive and useful". As with most forms of intellectual property, a patent grants a limited monopoly in return for some knowledge being returned to society. In the case of patents, the inventor shares their know-how by providing a full description of how their invention works. This information becomes public and can provide the basis for further research by others.

Artistic creations, mathematical models, plans, business schemes, or other purely mental processes will not be granted patent protection.

Key Requirements for Patenting

Patent protection is not automatic and a patent application must be filed and prosecuted with the national patent office in each territory where patent protection is desired. They will assess whether the invention satisfies three main criteria:

  • Novelty (has it been known, used, or published before?)
  • Inventive step (does it have an inventive step; could anyone skilled in the art have done it?)
  • Commercial utility (is it useful for anything?).

The application must describe the characteristics of the invention broadly and accurately, and state the extent of the patent rights sought. A thorough search of the patents database and academic literature and careful drafting of the application is necessary. This searching should be carried out in collaboration with your commercialisation office, who will be able to advise how best to carry it out.

The patentability of an invention can be jeopardised by public disclosure, even if such disclosure does not disclose the full detail of an invention. In order to qualify for patent protection, new inventions must not be discussed, demonstrated in public, or sold prior to filing a patent application. Publication in an academic journal, a presentation at a conference, or even a poster describing an invention can undermine the required novelty criteria mentioned above.

Patent applications are published and join a library of more than 30 million patent documents world-wide. It is estimated that more than 70 per cent of technical information is published on this database, making it a valuable source of commercial information. For researchers, or those wanting to keep an eye on their competitors' activities, the patents database is a unique resource, and complementary to conventional databases of academic publications.

Rights

The holder of a patent has the exclusive right to stop any other party commercially exploiting the invention. This is a negative right as it does not explicitly give the patent holder the right to exploit the invention, only to prevent others from doing so. This is an important factor in understanding the role of patents in translating research outcomes.

Reasons that the patent holder may not be able to exploit the invention themselves include:

  • The existence of other patents covering aspects of the invention
  • Regulatory issues not associated with IP.

An example would be a patent for use of a known drug that was currently used to treat cardiovascular disease where it was now discovered that it could be used to treat certain types of cancer. In order to exploit the new invention you would need to see if there were existing patent rights in relation to the composition of the known drug, and also obtain regulatory approval for its new use. For further examples and explanation see:
http://www.ncbi.nlm.nih.gov/pmc/articles/PMC526265/#fn1

Duration

Standard patents provide protection and control over an invention for up to 20 years from initial filing of the patent.

In Australia it is possible to obtain an innovation patent, which is a relatively fast, inexpensive protection option, providing protection and control over an invention for a maximum of 8 years.

It is recommended that university researchers wishing to patent their IP should:

  • Consult with their commercialisation office early in the process to ensure the invention has the best chance of being patented and that you comply with your university's policies;
  • Do not publicly disclose the invention before filing a patent application (public demonstration, sale, or discussion of the invention before filing may invalidate the application); and
  • Only discuss the invention with staff from other organisations (commercial or academic), business partners, or advisers on a confidential basis. Written confidentiality agreements are advisable and can usually be arranged by your university commercialisation office.

1.1.2 Designs

Designs are registered on the shape or appearance of manufactured goods. The visual features that form the design of goods can include the shape, configuration, pattern, and ornamentation which give the goods a unique appearance. Design registration does not protect the feel of a product, the materials it is constructed from, or its function. A design can be registered if it is new or original.

  • New: a design not previously known or applied in Australia
  • Original: although the design may have been applied to other products, it has never previously been applied to yours. Design registration prevents others using the design without agreement and initially applies for 12 months. This period can be extended up to 16 years, but varies by country.

Design registration prevents others using the design without consent from the owner. Design registration does not confer any rights to produce the product. Careful searching should be conducted to ensure a proposed registered design does not infringe any other existing rights. There are provisions in the legislation dealing with the overlap between copyright and design protection.

Cost and Complexity

A ‘registered design’ application requires the preparation of quality drawings. The registration process typically takes a few months. In Australia, a cost estimate is about $1000 per product. To be enforceable against third parties, a registered design must be certified, costing about another $800.

International Aspects

Generally speaking, design registration systems are similar in most countries, but the laws and procedures can differ greatly.

In countries where English is not an official language of the industrial property office, applications and associated documents will need to be translated into an official language used by that office. Obviously this can add considerably to the cost and time required to obtain registration.

Some countries require foreign applicants to use the services of a local agent to conduct the registration process. Fees for obtaining and maintaining a registered design in foreign countries vary from country to country, as does the length of protection.

Link to more detailed overview http://www.ipaustralia.gov.au/designs/index.shtml

1.1.3 Registered trade marks

Trade marks can be an identifying word, picture, logo, sound, or smell (or a combination of these) used to distinguish the goods and services of a trader from others. Trade marks are used to associate a certain quality and image with goods and services. Consequently a trade mark can become an important means of maintaining goodwill. Once a trade mark is registered, the owner has the exclusive right to use it within Australia for the goods and services for which it is registered. However, it is not strictly necessary to register a trade mark. A trade mark can be established merely by using it and becoming well known.

In order to be registrable, a trade mark must:

  • be capable of distinguishing goods or services from the same or similar goods or services of other traders
  • not be a mark that other traders would expect to able to use in the course of their trade (e.g., place names, commonly used trade terms)
  • not conflict with an earlier trade mark
  • mislead the public about the nature of the goods and services, or about connection or association with another’s goods or services
  • not be descriptive words or phrases.

Rights

Once a trade mark is registered, the owner has the exclusive right to use it within Australia for the goods and services for which it is registered and to prevent others using the mark without consent from the owner.

Duration

Trade mark registration can be renewed indefinitely.

Cost and Complexity

Approximately $1500 per class for Australian registration, up to $7000 per class per country for international registration. The Australian registration process can be expected to take from 7 to 12 months.

It is not strictly necessary to register a trade mark. A trade mark can be established merely by using it. This is referred to as a ‘common law’, or unregistered trade mark. Such marks are protected under the ‘common law’ action of ‘passing off’ and under legislation such as Section 52 of the Trade Practices Act 1974 (Cth) and the various state equivalents that cover misleading and deceptive conduct. However, a registered trade mark is afforded better legal protection than an unregistered mark.

Link to more detailed overview: http://www.ipaustralia.gov.au/get-the-right-ip/trade-marks/

1.1.4 Copyright

Copyright law provides incentives for creators to invest their time, talent, and other resources in creating material from which society benefits. In return for the creation of material, creators are granted limited monopolies to exploit and control their work.

Copyright protects against the unauthorised reproduction of original artistic, literary, musical, or dramatic work. It protects the expression of the ideas of the author, not the ideas themselves. It should be noted that copyright applies to computer software, and that copyright initially vests in the creator of the code, but ownership may also be covered by other agreements, such as employment contracts.

Rights

Copyright protection is provided under the Copyright Act 1968 and grants exclusive rights to license others in regard to copying, performing, broadcasting, publishing, or making an adaptation of a work. Rights vary according to the specific nature of material created. The phrase ‘all rights reserved’ often used in relation to copyright protected material is a good general summation of the creator’s (or owner’s) position.

There are some very limited and specific exceptions, allowing some copying without permission under the fair dealing provisions of the legislation. Educational institutions have some rights to copy under licensing arrangements.

Copyright does not protect against independent creation of a similar work.

Moral Rights

Moral rights are an important component of copyright protection and refer to the ongoing rights of the creator of the work in which copyright vests.
Moral rights are personal legal rights of individual creators of copyright material (artificial persons such as companies or institutions do not have moral rights), and cannot be transferred to another party the way that the other ‘economic’ rights associated with copyright material can be. This means that a user of copyright material must be mindful of the creator’s moral rights as well as the rights of the copyright owner, since these may well be two distinct parties.

The moral rights are the right to:

  • be attributed (or credited) for their work;
  • not have their work falsely attributed; and
  • not have their work treated in a derogatory way.

Key Requirements for Protection

Copyright is automatic and material is protected once it has been recorded. A work does not need to have been published to be covered by copyright.

Rights

A copyright notice (with owner's name and date) is not necessary in Australia, but it can help prove matters needed for protection, and may be necessary to establish copyright overseas.

Duration

The term of copyright varies, and can last as long as 70 years after the author's death – so copyright can be passed on as a 'property' within a will.

Cost and Complexity

As registration is not required, or even possible, there are no upfront costs. Legal costs incurred in addressing infringement would range from hundreds of dollars for an initial ‘cease and desist’ letter from a legal practitioner to very costly litigation.

Link to more detailed overview http://www.copyright.org.au

1.1.5 Plant breeders' rights

Plant Breeder's Rights (PBR) are used to protect new varieties of plants that are distinguishable, uniform, and stable. A PBR is legally enforceable and gives you, the owner, exclusive rights to commercially use it, sell it, direct the production, sale, and distribution of it, and receive royalties from the sale of plants.

PBR lasts for up to 25 years for trees and vines and 20 years for other species. To be eligible for protection, the new variety must be shown to be distinct, uniform, and stable. In a comparative trial the variety must be clearly distinguishable from any other variety, the existence of which is a matter of common knowledge. A new variety may be sold for up to 12 months in Australia, and 4 years overseas, yet still remain eligible for plant breeders' rights. The rights do not cover the use of a grower's crop (the grower does not have to pay a royalty on the crop produced) nor do they extend to retention by growers of seed for the production of another crop or the use of the variety in plant breeding.

Grants of plant breeders' rights give exclusive commercial rights to market a new plant variety or its reproductive material, including the rights to:
(a) produce or reproduce the material;
(b) condition the material for the purpose of propagation (conditioning includes cleaning, coating, sorting, packaging, and grading);
(c) offer the material for sale;
(d) sell the material;
(e) import the material;
(f) export the material; and
(g) stock the material for any of the purposes described in (a) to (f).

Duration

Registration lasts for up to 25 years for trees and vines and 20 years for other species.

Cost and Complexity

$300 plus any legal fees for filing application, then full registration fee is $1700 plus legal fees, with annual fees of $300 per annum.

The Australian registration process can be expected to take from 7 to 12 months.

Link to more detailed overview http://www.ipaustralia.gov.au/get-the-right-ip/plant-breeders-rights/

1.1.6 Circuit layout rights

Circuit layout rights automatically protect original layout designs for integrated circuits and computer chips for up to 20 years. These rights are based on copyright law principles but are a separate, unique form of protection under the Circuit Layout Act 1989 (Cth). The owner of an original circuit layout has exclusive right to:

  • Copy or authorise the copying of the layout in a material form
  • Make integrated circuits from the layout
  • Exploit it commercially in Australia.

Commercial exploitation may occur by importation, sale, hire, or distribution of a layout or an integrated circuit made according to the layout.

Key Registration Requirements

As with copyright protection, there is no requirement, or provision, for registration.

To be protected under the Act, a circuit layout must be original. A circuit layout is considered original under the Act, unless:

  • its making involved no creative contribution by the maker; or
  • it was commonplace at the time it was made.

Duration

The maximum possible protection period is 20 years from the year of making an eligible layout – 10 years from the date of first exploitation, which must be within 10 years of it first being made.

Cost and Complexity

As with copyright, given that registration is not required, or even possible, there are no upfront costs. Legal costs incurred in addressing infringement would range from hundreds of dollars for an initial ‘cease and desist’ letter from a legal practitioner to very costly litigation.

Link to more detailed overview http://www.ipaustralia.gov.au/get-the-right-ip/other-types-of-IP/circuit-layout-rights/

1.1.7 Trade secrets/confidential information

The ability to protect your IP can be affected if you have made a disclosure before the IP is protected. This may be via publishing a paper, giving a talk at a conference, or even by having a discussion with someone who is not part of your institution. Maintaining secrecy can also be used as a strategy for managing intellectual property generally. In some instances this approach may be more effective or better suited than other forms of protection and may be the only approach available in some circumstances due the nature of the material.

Also known as “know-how”, this includes information such as secret recipes or mixtures, or manufacturing techniques, processes, and conditions.
This is often used as an alternative to patenting for a number of reasons:

  • cost – patents are costly and time-consuming
  • the time limitation on patent protection does not apply to information that is kept confidential
  • the release of details, required for patent registration, may assist competitors
  • some intellectual property may not be eligible for other forms of protection.

Know-how can be protected by secrecy agreements. This is particularly effective in the case of chemical compositions and manufacturing processes where reverse engineering is either unlikely or excessively difficult. However, once a trade secret or confidential information has been transferred, it may lose value as further dissemination is more difficult to control.

Legal protection of confidential information is available under the common law principle of breach of confidence, which requires three elements to be satisfied.

  • The information must be of a confidential nature. This mean the information must not be public property or knowledge, though this requirement is less stringent than for a patent. If the information is generally known in a particular industry or discipline, it will not be considered to be of a confidential nature, even though outsiders may be unaware of it. Publicly available information that has been collected, arranged, or analysed through the effort and expense of a researcher may be considered protectable.
  • The information must have some commercial value, though such value need not be great, a “significant twist or slant on a well known concept” has been held to be of value.
  • The information must have been treated as confidential. This can be established by ensuring information is marked as confidential, physical access to information is restricted, and written instructions to staff, contractors, and others advising of the confidential nature of material are issued.

The law distinguishes between an employee’s general know-how, skill, and experience acquired in the course of employment (referred to as subjective knowledge), and other information that a reasonable person (one of ordinary honesty and intelligence) would be expected to consider as the employer’s property. Only the latter will be protected.

There must be an obligation not to disclose or use the information. Even without a specific contractual term, this obligation is generally accepted to exist in certain relationships such as those with:

  • employees and former employees
  • consultants and advisors
  • partners
  • those granted licenses.

Naturally, the most effective way of establishing this duty is a carefully prepared contract including appropriate and enforceable non-disclosure/non-use clauses.

There must be unauthorized use of the information to the detriment of the owner. This requirement could include the use of information to establish a competing project, to seek funding, etc.

Depending on the existence and nature of agreements between parties, legal action for breach of contract may also be a possible basis for legal action to restrain another from unauthorised use of information. An action for breach of confidence does not require a contract, though having one in place will generally make it easier to establish the required elements, and is, of course, prudent practice generally.

To avoid disclosing information via a conversation or discussion, it is always prudent to put confidentiality agreements in place for discussions of your research with other external parties.

A confidentiality agreement allows disclosure of confidential information without prejudicing the patenting process. Such agreements are often used to protect trade secrets and other confidential information; it gives a contractual right of control over your intellectual property. There are various issues regarding confidentiality agreements. Before issuing or signing a confidentiality agreement, always consult with your commercialisation office. For example, some agreements are written in such a way that they require the discloser to keep his/her own information confidential, which is usually not desirable.

Researchers may also be bound, after they complete a project or cease to be a university employee, not to disclose or use certain confidential information. This may be the case even if a confidentiality agreement has not been expressly entered into.

1.1.8 Passing off

Passing off is a ‘common law’ form of protection – that is, a legal principle that has been developed based on precedents established by previously decided cases concerned with similar facts. Passing off can protect a device or mark used by a trader, such as a name, a logo, aspects of packaging, or the general ‘look and feel’ of an item, even though these have not been registered (or are incapable of registration) as trade marks.
While relying on a passing off action may seem to have some benefits, such as not requiring registration and offering protection that may be broader than under trade mark legislation, there are some significant downsides. The challenges with a passing off action typically lie in establishing the existence of a reputation and proving some harm (or the likelihood of harm) has been suffered.

The other element required to establish passing off is some conduct that has misled, deceived, or confused third parties into making some association between the party’s products or services.

1.1.9 Business names, domain names

Business Names

The mere registration of a business name – although it is a necessary requirement prior to conducting a business (under the various state Business Names Acts) and is one possible basis for supporting the registration of a domain name – confers no rights to use that registered name. One shortcoming of the business names registration system adopted by the states is that searches for similar/identical registered trade marks are not conducted prior to registration.

Domain Names

There are no proprietary rights arising from the registration of a domain name in Australia, or anywhere else in the world. A party who registers a domain name does not ‘own’ that name, but holds a licence to use the domain name, for a specified time period and subject to the terms and conditions set out by the administrators of .au domain names in Australia. These terms include restrictions on the transfer of the license to use a domain name.
Domains with a .au suffix may only be registered where the registrant is:

an Australian registered company; or
trading under a registered business name in any Australian state or territory;
an Australian partnership or sole trader;
a foreign company licensed to trade in Australia; or
an owner of an Australian registered trade mark; or
an applicant for an Australian registered trade mark; or
an association incorporated in any Australian state or territory; or
an Australian commercial statutory body.

“.com.au” and “.net.au” domain names must:

a) exactly match, or be an acronym or abbreviation of the registrant’s company or trading name, organisation, or association name or trade mark; or
b) be otherwise closely and substantially connected to the registrant”.

Furthermore: there is no hierarchy of rights with domain names, a registered trade mark does not confer any better entitlement to a domain name than a registered business name, and are there are no checks by the domain name registrar to ascertain whether a proposed domain name is identical to or similar to any company name, business name, or trade mark registered by another party. Domain name licences are allocated on a ‘first come, first served’ basis. Provided the relevant eligibility rules above are satisfied, the first registrant to apply for a particular domain name will be permitted to license it.

The registration process is much more open with regard to top level domain (TLD) names, such as .com, .net, and .org. The registration of these domain names is regulated by the Internet Corporation for Assigned Names and Numbers (ICANN), an international non-profit corporation, not auDA, and there are effectively no pre-conditions for registrations of TLD names. Any party may therefore register a .com, .net, .org, etc. domain name that is similar or identical to an Australian registered trade mark.

Although there are some pre-conditions for the registration of a .au domain, registration is still a relatively easy process that requires, at a minimum, the registration of a business name.

Link to a more detailed overview
http://www.theage.com.au/news/business/web-of-confusion-between-domain-names-and-trade marks/2007/07/19/1184559956079.html

1.1.10 Open licensing / open source

There is a movement, evident by a number of alternative approaches, to make intellectual property more ‘free’. Not ‘free’ in the sense of ‘a free lunch’, but ‘free’ in the sense of ‘free markets’ or ‘free speech’. It is sometimes expressed as the distinction between gratis (for zero price) and libre (freedom).

Two common examples of this approach are:

Creative Commons

Creative Commons is a nonprofit organisation established to make it easier for “people to share and build upon the work of others, consistent with the rules of copyright”. The organisation provides free licence wording and other legal tools to “mark creative work with the freedom the creator wants it to carry, so others can share, remix, use commercially, or any combination thereof”.

The terms of use under a Creative Commons licence are one (or a combination) of the following.

Attribution – a general license allowing all others to copy, distribute, display, and perform copyright protected work – and derivative works based upon it – provided acknowledgement of the creator is made.

Share Alike – a general licence allowing all “others to distribute derivative works only under a license identical to the license that governs the original work”.

Non-commercial – a general licence allowing all others to “copy, distribute, display, and perform a work – and derivative works based upon it – but for non-commercial purposes only”.

No Derivative Works – a general licence allowing all others to “copy, distribute, display, and perform only verbatim copies of a work, not derivative works based upon it”.

See www.creativecommons.org

Open Source
Examples of open source are typically online content, such as www.wikipedia.org and community developed and supported software, such as the Linux operating system and the Mozilla Firefox browser.

This material is still covered by copyright law, as copyright protection arises automatically, but creators have granted wide (but not unlimited) licences for most uses of the material.

Only the owner of copyright material has the right to grant any licence (including licences such as those under a Creative Commons or open source model), so issues of ownership and the rights conferred under appropriate university IP policies must first be determined before considering granting any licence or other rights, either to specific persons or to the world at large.

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