When businesses fail to adequately protect their intellectual property, they are exposed to the potential risks of competitors imitating their ideas and/or passing them off as their own.
Unfortunately, it is often the case that well-established, macro corporations with an abundance of resources prey on the vulnerability of small and medium sized enterprises (“SMEs”) by way of theft of the intellectual property of such SMEs. Without adequate intellectual property rights to fall back on, SMEs usually have very little chance of taking on big corporations. The world is becoming increasingly competitive and successful innovative ideas tend to attract copycats, making it of vital importance that businesses understand the risks that they face in failing to properly protect their ideas.
What is defined as Intellectual property?
Intellectual property refers to intangible property that is the product of human creativity and which often attracts substantial commercial value. The law of intellectual property allows creators of such inventions to attain various rights to the intellectual goods that they create, known as intellectual property rights. It is important that SMEs have a solid leg to stand on in circumstances where potential disputes as to who is the original creator arise.
Types of intellectual property protection:
Registering a design
SMEs are advised to register the new and unique physical features of their products as registered designs, the sooner the better. A design may have both aesthetic and functional features, both of which can be protected separately. If a design has been registered, the person or business who registered the design will be granted a monopoly of rights in respect of the external appearance of the product and this will effectively protect the look-and-feel of the product against copycat designs. By registering a design, the owner of the design is able to control the way in which the design is used, enabling them to prevent the big corporations from copying and profiting off of their design without consent and monetary compensation.
In the event that copying occurs despite the registered design, the owner may then decide to charge the imitators royalties for the use of their design and take legal action against them. In terms of the Design Act, two of the most important requirements when registering a design is that the design is both new and original. A design is deemed new if it can be distinguished from what has been done before and it is therefore important that the owner of the new design is careful not to disclose the design publicly before filing a design application. However, in terms of the Design Act a grace period of six months, from the date of the first public disclosure of the design, makes it possible to obtain valid design protection. Therefore, it is very important for SMEs to be aware of the opportunity to register their design rights during the early stages of the design process in order to avoid any potential stumbling blocks further down the line.
If SMEs are aware of the potential risks as well as the benefits of registering their designs, internal procedures can be put in place to identify opportunities to protect their intellectual property and prevent copycats from using their designs.
Registered trade marks
Further to the registration of a design, it is also possible to safeguard intellectual property in the form of a registered trade mark. Trademarks are words or other marks, such as a logo or slogan, which identify the product or service of the trade mark owner from the goods and services of other providers, with very little limit as to the form which the trade mark can take.
According to the Trade Mark Act, a mark is defined as “any sign capable of being represented graphically.’’ In terms of our law, trademarks may be registered, and the registration remains in place for a period of ten years, after which the registration can be renewed. Much like the advantages of registering a design, the registration of a trade mark allows the owner to prevent and stop the use or registration of another trade mark in respect of the same or alike goods or services if the other mark closely resembles the registered mark so as to cause confusion. SMEs should be aware that trade marks which are not formally registered enjoy only a limited form of protection in terms of our common law and proving ownership requires far more evidence than what would be required had the mark been registered.
On the other hand, copyright is a form of intellectual property which does not require any formal registration but still provides protection against another party copying the work. In order to be eligible for copyright protection, the particular type of work must be covered by the Copyright Act and must be in a material form. The Act also requires that the ‘work’ is original and includes works such as literature, art, music, sound recordings, cinematograph films, broadcasts and computer programs. SMEs should ensure that their original works are reduced to material form in order to protect their intellectual property in terms of the Copyright Act.
Another category of intellectual property that has been recognised for legal protection are patents. A patent is an exclusive right granted for an invention which can take numerous forms such as a process, a method, a machine, a device, a new material, a chemical compound or chemical composition. The requirements are that the invention is new, that the invention is not an obvious variation of known technology it must be capable of being applied in trade, industry or agriculture. If SMEs have met these requirements, they are advised to file a patent application in every country where they wish to patent their invention, especially in circumstances where the invention will disclosed to the public.
Filing a patent for an invention secures and protects the rights of the inventor and further, adds value to the invention. Once a patent is secured in a particular jurisdiction, the owner of the patent will have a monopoly over it, allowing them to make the invention, use the invention as well as having control, over the sale, licensing and leasing of the invention. If SMEs fail to protect their inventions by filing a patent application, they run the risk of larger competitors stealing their ideas and out-competing them.
It is vital that SMEs understand the commercial value of intellectual property and the importance of protecting these assets against imitators. SMEs should identify the types of intellectual property they may have, whether it be a trade mark or an invention, and take steps to guard against any potential risks by adequately protecting their intellectual property.
It goes without saying that a large retailer capable of manufacturing and producing products at much cheaper rates than local SMEs typically can, can cause great damage to a local business and even cause them to go under. Although it can be said that big corporations have a corporate social responsibility to support small enterprises it is up to SMEs to ensure that their intellectual property rights are protected to ensure that these big corporates in fact “toe the line”.
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Natalie Macdonald-Govender is an Associate Attorney at De Beer Attorneys. De Beer Attorneys specialise in all aspects of Intellectual Property Law including patents, trademarks, design rights and copyright in South Africa and the African continent.