What Does It Take To Create A Company?

Value the value of intellectual property, and learn all about trademarks, copyright, patents and your design rights. 

 

The importance of intellectual property (IP) to the success of any business cannot be overestimated, and this is true for small as well as large businesses.  Unfortunately, appreciation and knowledge of IP is still lacking in our region.  In addition, many companies around the world view IP as a cost center or expense.  However, the reality is that IP is one of the most important assets a company owns and by having the proper knowledge and strategy, this will not only ensure that the company is using this asset properly, but also helps it to avoid infringing on others’ IP, thus avoiding costly legal cases that distract from the company’s core business.

 

What is Intellectual Property? 

IP is a term that covers creations of the mind and cover a number of properties such as trademarks, copyrights, patents (new inventions), industrial designs, and geographical indications.    

 

Your Trademarks

A trademark can be almost anything that identifies your company’s goods or services than those of a competitor.  Examples includes a word, name, phrase, number, sounds (think of Dell computers), shape (coca cola bottle shape is trademarked) or even aspects of packaging (color, style, ribbons-The famous Tiffany box).  At its basic, a trademark is an indicator of your company or products/services and it is how your clients and customers come to know you by and attach certain characteristic to your trademark.   

 

Choosing the right trademark

When choosing a trademark keep in mind the following different categories; Fanciful/inventive; arbitrary; suggestive; descriptive and generic.  These categories indicate the trademark’s ability to stand out on their own.

 

Generic words are not protected as they are simply the common name of the product or service that is in question as are descriptive trademarks.  However, descriptive trademarks may be protected if they have been used for over 5 years and the company shows it has invested heavily in promoting the trademark and has become largely associated with that company’s products.  For SMEs, this would not present a good idea since it requires a heavy investment and effort, which most cannot afford.  Therefore, it is best to go for fanciful, arbitrary or a suggestive trademark, but even then you must have a clear idea of your business plan and objective.  If you are launching a new product that has a life cycle around 2-3 years, then a fanciful trademark may not make sense since it takes time to build the trademark’s value and may take longer than the product’s life, thus a suggestive trademark may be more appropriate in this situation. 

 

Copyrights

Copyrights cover works as novels, lyrics, music, paintings, pictures and databases.  A work gains protection as soon as it is fixed, meaning it was expressed in an appropriate medium, which for a novel may mean writing it and for a painting it means drawing it on a canvas.  Remember that an idea is not protected- only the expression of the idea- the fixation- is protected. 

 

Who owns the copyright?

Copyright law states that the creator of the work is the copyright owner, unless there is a clear agreement that the creator assigns, or gives up, the economic right to another.  As an employer, if the employment contract does not clearly stipulate that the company is the owner of any copyright work created by an employee, then the employee may be able to claim right to it and use it in other employment.  The same principle applies if you hire an agency to develop a marketing campaign or designs.  Make sure that the contract clearly indicates that any paid work they perform belongs to your company. 

Also, be careful not to infringe on others’ copyrights.  People sometimes use a photo which they found on the internet assuming that it is free to use and place it on their company websites or brochures, and that could spell legal issues for you.   

As a precaution, always assume that any picture or piece of music you find is copyright protected (because most probably it is) and then investigate to verify if the work is in the public domain or free to use or if a license to use is required, this will help you avoid getting involved in legal troubles.   

 

Patents and industrial designs

Patents and industrial designs are somewhat similar in that they both need to be new and novel, however a patent is an invention of a new and useful product or method, while an industrial design is merely an aesthetic feature of a product that has no real usefulness to the product except to make it look more appealing or distinctive.  Industrial designs also incorporate industrial drawings, which can also protect a design or pattern on a fabric used for clothing.  The threshold for receiving a patent is much higher and more cumbersome that that for an industrial design. 

 

What to do (and not to do) 

Except for copyrights, IP protection is jurisdictional, that means that you have to register your IP in the country where you want to be protected.  By filing your trademark in the UAE it does not provide protection in Saudi, so you have to file in each country separately to protect and that requires a clear understanding of your expansion plans and markets.  In addition, trademark ownership rights mainly belong to the one who files it first.  That means if you have been using your unregistered trademark for the past 2 years, and someone else files it before you today, you could be in deep trouble 

 

You also need to indicate to everyone that your trademark is not just another word, but that it is your trademark and you will take action against any infringement.  This is done by using indicators such a TM or ®.  Also, where possible, use statements such as ‘XYZ is a registered trademark of XYZ Corporation’ on your website and marketing materials and do not use your trademark as a stand-alone noun or as a verb or even in a plural sense. 

 

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