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Home > > Business finance > Business growth and development > Safeguard business ideas and intellectual property
Safeguard business ideas and intellectual property
Intellectual property can form an important and valuable part of a firm's assets.
Not only can intellectual property distinguish a firm and its products or services from its rivals, it can also represent an additional source of revenue if the property is licensed or sold.
Protecting its intellectual property should be a high priority for many firms.
Intellectual property covers more than just product or technological innovations. As well as inventions, firms can extend protection of their intellectual property to safeguard names, logos, designs and creative products.
The purpose of providing or securing protection for intellectual property is to guarantee in law the sole right of the firm to make or sell or use a certain product, or to prevent other firms from making or selling it without permission. Protected property rights also mean that a firm can generate income from the property by licensing or selling it.
There are a number of ways a firm can legally protect its intellectual property.
Patents
Patents are used to protect innovations or inventions that no one else has hitherto patented. A patent will protect intellectual property for a set period of time. A firm must apply for a patent from the Patent Office.
Copyright
Copyright is a protection which the law extends automatically. It covers original literary and artistic works, but also applies to such things as software, the content of a website and instruction manuals.
Trademarks
Trademarks are those things which identify or represent the products and services of a business. Among others, they include logos, brand names, symbols, straplines and packaging. The best way to safeguard a trademark is to register it.
Design
Design right, like copyright, is a protection which the law extends automatically to the design of three-dimensional objects. The protection, however, is not comprehensive.
Design registration affords greater safeguards and covers two- as well as three-dimensional objects.
More details on intellectual property protection can be found by visiting the Patent Office website. When considering the protection of its intellectual property, a firm should take professional advice.
Non-disclosure agreements
It is an axiom of business that to innovative is not merely to survive but to thrive.
But for an innovative idea to be truly worth its weight in gold, a business must make sure that its competitors do not steal a march.
When a business has an innovative idea, perhaps for a new product or service, it can protect that idea using the law of confidentiality.
The law stops anyone - an employee, another business, a supplier, a customer, a consultant, or a potential partner - who has been given access to the secret or confidential idea from sharing the information with anyone else.
If, for example, a business wishes to take advice from a manufacturer on the feasibility of making a new product, but wants to limit the information to the manufacturer, then the law of confidentiality can be used to prevent the information from being divulged to, say, a competitor.
A confidentiality pact between two parties is known as a non-disclosure agreement.
A non-disclosure agreement is a legal contract that binds the party with whom the business idea or secret information is being shared to a promise not to pass the idea or information on.
Information is defined as being confidential or secret if it is not publicly known and if its value is dependent on its remaining secret and unknown.
What non-disclosure agreements can protect
A non-disclosure agreement can be used to safeguard a number of things.
It can be applied to, among others, a new manufacturing process, designs, formulae and business concepts.
A non-disclosure agreement can be used when one business is sharing confidential information with another party or when two businesses are sharing confidential information with each other.
Non-disclosure agreements can also apply to employees. Although employees have a duty not to hand over information that could compromise the commercial position of their employers, it may make sense to have this put in contractual form where important and specific information is concerned.
Drawing up a non-disclosure agreement
It is possible to buy a template non-disclosure agreement which can then be adapted to suit a particular situation.
However, you need to be sure that the agreement provides the cover you are seeking. In which case it may be worthwhile investing in the services of a lawyer who can draw up a one-off agreement.
Where an agreement applies to a public organisation, it will need to accommodate the requirements of the Freedom of Information Act.
When putting together an agreement, there are a number of issues that will need to be detailed: how the information can be used, for example, and the exact restrictions placed on it. It is vital the non-disclosure agreement is precise about what information is being shared and the level of detail.
Before drawing up a non-disclosure agreement, it is advisable to seek professional legal guidance.
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