Too many Australian small business owners see Intellectual Property (IP) as being an issue for “big” business. In fact, IP is found right across most small businesses; it comprises everything from your brand, ideas, inventions – even new twists on existing ideas. So, does your small business own IP? If so, what steps should be taken to protect it? Here’s a look at what you need to know about Intellectual Property and small business:
Does Your Business Own IP?
You own IP if you:
- created it (and it meets the requirements for a patent, trade mark, design or plant breeder’s right), or
- bought IP rights from the creator or a previous owner.
You usually won’t own the IP for something you created as part of your work while you were employed by someone else.
- have more than one owner,
- belong to people or businesses,
- be sold or transferred, and
- be licensed.
Businesses often rely on employees and independent consultants to develop their ideas, and assume that they automatically own the IP rights. This, however, is not always the case. In Australia, the employer owns the IP created by an employee if it is related to the employer’s business, unless the employment contract stipulates otherwise. For contractors, IP created is by law considered the property of the contractor unless otherwise stated in the contract. See IP Australia’s quick tips to avoid IP ownership disputes.
How to identify your IP assets
It’s good practice to value your IP assets just as you would value physical assets. Valuing your IP also makes your business more attractive to potential investors and buyers, especially if that value can be formally recognised for accounting purposes. Other benefits include:
- determining the overall value of your business
- providing a tool to measure and manage your assets
- providing security and backing for lenders
- providing taxation benefits (tax deductions)
- reducing the proportion of your business’ net worth attributed to goodwill – important when selling a business.
When identifying your IP assets, think about the products or services that are key to your business, your legal rights in relation to your products or services and the market advantages your rights give you.
How to legally protect your IP assets
Once you’ve identified your business IP, you may wish to protect it. There are different types of IP protection options:
- patents protect inventions,
- design registration protects their look,
- registered trade marks protect brand names, logos, original sounds and scents, and even aspects of packaging, or
- plant-breeder’s rights (PBR) to protect a new plant variety.
It’s important to explore all benefits and risks associated with registering your IP. You may decide that keeping your IP secret, or even making it public, provide greater benefits than legally protecting it. Consider seeking professional advice from a qualified person in order to fully understand all implications.
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Source and for more information visit: www.ipaustralia.gov.au.