In this series of posts about starting a new business, I’ve discussed How NOT to name your new business, funding your startup, 5 pre-registration decisions you need to make for your company, documents you need to have for your company before you start conducting business and tax obligations for your new business. So now you are set up to start trading and have considered your tax obligations, what else is there to think about?
One very important area to consider is your business’s intellectual property. Intellectual property are intangible business assets which arise out of creativity or innovation. As assets your IP needs to be protected just as any other asset would be. Potential future investors or purchasers will want to be sure that business critical IP are protected. Read this guide to find out five facts that new businesses owners should know about IP.
1. Confidential business information is considered intellectual property. Protecting confidential information should be a priority for any business, but especially a new business in the process of collaborating with other businesses or developing new ideas. If you are going to share business secrets, you should consider signing a nondisclosure or confidentiality agreement, which helps to ensure that your business secrets stay confidential. By signing Rocket Lawyer’s confidentiality agreement both parties agree that a breach of such a contract will result in remedies such as damages, injunction, specific performance and other relief.
2. Registering your company name at Companies House does not give you any IP protection. Although no other company can register the same company name as you, it does not prevent other people from selling good or services under the same name. This is why it important to register your brand as a trade mark, which will deter other parties from copying or using a confusingly similar brand and give you the right to stop someone who is. Registering your trademark gives you (or your company, depending on who owns the trademark) the exclusive right to use the it when selling your goods or services.
3. Employee creations made in the course of employment are owned by the employer. If an employee creates intellectual property in the course of their employment and as part of their employment duties, the employer owns this work (unless agreed otherwise). Intellectual property could arise from literary (eg books, software), dramatic, musical or artistic works, or a film. If the employee is not employed to create intellectual property, but does so, then the employee will own the intellectual property even if they use the equipment they use for work to create it.
4. Employees are bound by the duty of good faith not to reveal confidential information or trade secrets. As well as written terms in an employment contract there are certain implied terms included, such as the duty of good faith. This implied duty obliges employees to refrain from any action which would damage an employer’s business such as revealing confidential information.
5. Protect your inventions before showing people. As well as registering your trade mark, you should register inventions with the Intellectual Property Office to protect them from being used by other people. Make sure you do this before showing people your invention in a non-confidential manner (such as on a crowd funding website!). Patent law requires an invention to be both new and non-obvious over everything known to the public anywhere in the world. If you show someone your invention without signing an NDA before filing your patent application, it may not be possible to get a valid granted patent.
For more information on different types of IP and their respective rights read Intellectual Property