Navigating others’ intellectual property (IP) rights is a challenge faced by all businesses. So many business activities potentially infringe others’ rights that it can be hard to know where to start.
Perhaps the simplest advice is to be alert to the risk factors, be cautious and don’t be afraid to pick up the phone to an advisor such as a patent attorney or a trademarks attorney. A good advisor should be happy to have a brief free-of-charge discussion about risk, any recommended steps to assess and minimise risk, and the cost of those steps.
As we discussed last month Intellectual property for small business, others may have exclusive rights in products and/or processes, in trademarks and/or in artistic works under the patent, design, trademark and copyright systems. The Australian Consumer Law (ACL) prohibits misleading and deceptive conduct, and ‘judge made’ or common law prohibits passing off.
So what are the risk factors?
Copying or doing something similar
Copying another’s literary work (e.g. text in brochure or on a website) without their permission is more than likely an infringement of copyright. On the other hand, in Australia, copying a typical manufactured product is unlikely to infringe copyright.
Either way, if you’re doing something similar to another trader, copying is a risk factor to consider. If you’re making a copy of a manufactured product, while that might not infringe copyright, valid patent or design rights might apply. In this case, a check of the patent and design databases for rights held by the other trader is likely to be in order.
Market confusion
If you have any reason to suspect that your actions could cause confusion in the market, that’s reason enough to tread carefully – that is, take genuine steps to avoid confusion and/or seek advice. In particular, be careful to avoid anything that might confuse customers into thinking that your goods and/or services are associated with an unrelated trader.
Use of a trademark deceptively similar to someone else’s trademark registered for sufficiently similar goods or services is prohibited.
Even if a competitor’s trademark is not registered or even if you don’t take the competitor’s trademark, confusing customers can still breach the law if it amounts to passing off your goods or services as those of another trader, and/or it amounts to misleading and deceptive conduct. For example, adopting similar packaging could cause confusion.
Entering a new market
Before spending the money to enter a new market, it can pay to take the time to check the ‘IP landscape’ in that market. You might find that it’s a highly litigious field dominated by prolific patent filers, which may significantly change the assessment of the risks and likely costs of operating in this new market.
Operating in a litigious market
Of course, if you know that you are operating in a litigious field, it pays to be cautious. It may be advisable to routinely monitor your competitors’ patent, design and trademark activities so that you can take early action to avoid more significant costs later on.
Expanding overseas or online
Just because there’s never been a problem in the local market, that doesn’t mean you’ll avoid problems overseas (or online). You need to remember it’s a new market every time you roll out to another country. At the very least, basic trademark checks are needed.
Someone’s likely to be offended
It pays to consider who might want to take action against you and to check whether they have relevant rights. It’s important to consider both the ‘strict legal position’ and the commercial reality – a sufficiently motivated competitor with deep enough pockets could cause you great difficulty, even if their position against you is only arguable.
Making a significant investment in something new
And finally, aside from the likelihood of having a problem, the size of that problem is also something to consider. It of course makes sense to spend thousands checking for problematic IP rights that might stop you making a new product before investing millions building a new production line dedicated to that product.
Belinda Wadeson Principal , Wadeson
