Every business, big or small, will own or use some form of intellectual property (IP) but in many cases don’t realise that it’s one of the most valuable assets you can own. Find out why understanding confidentiality and licensing may be key to business success.
The four main types of IP rights are:
- Patents – which protects the processes that
make things work
- Designs – which protects the look of a product
- Trade marks – which can protect your ‘brand’
in the market place
- Copyright – which protects written or recorded
material
Like physical property, IP can be
bought, sold and licensed. These rights can allow the owner to try and stop
others from replicating, using, importing or selling their creation.
Licensing
IP can be “licensed-out” or
“licensed-in”. You can “license-out” to another company in return for a fee.
You can “license-in” if you want to use another company’s IP to develop your
own business and products. The person granting the licence is usually called
the licensor, and the person receiving the licence is usually called the
licensee. There may be more than one licensor or more than one licensee in a
licence agreement.
There are many benefits of licensing
which include:
- Sharing costs and risks
- Broadening your reach
- Accessing expertise
- Collaboration
There are however, instances when
granting or taking a licence isn’t appropriate. You can find a list of these
instances on our website.
For any further information and tips on brand licensing, check out or recent podcast
with licensing company ‘Born Licensing’.
The IPO has a database of patents that are endorsed ‘licence of
right’. This means that the patent holder has agreed to licence their patent to
anyone who asks. In contrast, if you have a patent, you can ask the IPO to
endorse your patent with a licence of right in the register of patents. This
means that you must grant a licence to anyone who wants one.
The main advantages of having your patent endorsed with a licence of right is that it lets other people know you are happy to licence your intellectual property. For more information on confidentiality, licences of right, visit our licensing webpages.
Franchising
If your business is thriving and
you’re wanting to expand, one option is to license IP to franchisees. In
addition to the actual product or service, the various forms of IP such as
trade marks, promotional materials, business and marketing systems, shop
fit-outs and confidential information can all be licensed to the franchisee to
use.
Franchising is a way of sharing IP
with others to distribute goods or services – the franchisor owns the IP rights
and the franchisee pays a fee or regular royalties to use them.
A major benefit of the franchise
system is the ability to trade under a well-known trade mark. Usually, the
franchisor grants a trade mark licence to the franchisee in return for a percentage
of the gross turnover.
One example of a successful franchise
is Costa® coffee. They give the franchisee permission to use their brand and a
business template to use. This sets out how the premises must look, the service
levels and training required. The franchisee then gives Costa® a percentage of
their earnings.
Watch our IP Basics video on licensing and franchising to learn more.
Non-disclosure agreements
At some point in your journey, you may
need help from a third party to create or distribute your products. That’s
where a non-disclosure agreement (NDA) will come in.
An NDA is a legal contract which sets out how you share information or ideas in confidence. A good NDA restricts the use of the ideas and information to a specific permitted purpose such as evaluation or the discussion of a collaboration. Either way, make sure you specify the purpose in your NDA as precisely as you can.
NDAs are especially important when applying
for patent protection. Many countries including the UK have firm rules on when
an invention is considered to be in the public domain.
If you reveal your invention to
anybody before applying for a patent, it is considered a public disclosure and
may prevent you from getting a valid patent. For example, producing your
invention in a public exhibition to how it works, would jeopardise any future
patent protection.
An IP attorney or solicitor can advise on confidentiality and licensing and draw up an appropriate NDA for you to use. You should consider what your NDA covers. It could protect information which is recorded and marked ‘confidential’, and it could also protect information you share in meetings or presentations.
For further help with NDAs, the IPO
has developed a free online tool called the IP
Health Check. This will help
you identify the necessary practical and legal steps to keep your ideas and
information confidential.
IP for Business
The IPO promotes innovation and growth by offering a vibrant programme of activities and informed advice and support for businesses. So, whether you’re new to IP, brushing up on your skills, or wondering how to differentiate trade marks from copyright, this is the best place to start. Get help understanding confidentiality and licensing for your business today.
For help growing your business, accessing finance or connecting to the right people, be sure to get in touch with the Innovation SuperNetwork team.
