Intellectual Property Rights | Protection and Exploitation
The description ‘Intellectual property’ (‘IP’) covers intangible creations which may be protected by registration by, for example, as a Patent, Trade Mark or Registered Design, as appropriate.
IP takes many forms and may well carry far more value than the physical assets of the company owning it to the extent that the right to ownership of such IP Rights (‘IPRs’) will be fiercely guarded and protected.
Prudent businesses protect their IPRs by registration where possible and appropriate to do so and rely upon such legislation as is available to protect that which cannot be registered.
By protecting IPRs by registration, it is easier to pursue legal proceedings in circumstances where a third party infringes the legal owner’s rights in any way.
In order to protect and maximise the potentially substantial financial benefits afforded by the exploitation of IPRs, it is essential to ensure that, in addition to registration, all marketing and handling activity which is agreed is properly recorded in a formal Agreement.
Stuart Southall of Kangs Solicitors comments upon IP protection, provides some examples of successful IPRs exploitation and the necessity for engaging the certainty of a written Agreement.
Intellectual Property Protection
Appropriate IP protection assists in preventing third parties stealing or copying:
- The name of a product or brand
- A particular invention
- The design or look of a product
- Items made or produced
Patents, Designs and Trade Marks are all forms of IP protection and, in general terms, provide the following protection:
Patents inventions, machines, medicines.
Designs the appearance of a product such as shape, packaging, patterns and decoration.
Trade Marks product names, logos and jingles.
Exploitation of IPRs
Since the technological ‘explosion’ of the 1980s the value of IPRs has become far more recognised as evidenced by, for example, sporting associations:
- In the 1980’s, Michael Jordan, the USA basketball star, concluded a deal with ‘Nike’ which introduced the ‘Air Jordan’ basketball shoes
Such is the success of this liaison that nearly forty years later, the financial returns remain staggering.
It is reported that Nike still sells $3,000,000.00 worth of ‘Air Jordan’ basketball shoes every five hours, being the amount which it originally expected to achieve every three years.
NIKE, by associating itself with Michael Jordan’s on court achievements made itself synonymous with basketball.
- Demonstrating its expertise in IP exploitation NIKE subsequently sponsored golfer, Tiger Woods. The original deal between them was allegedly worth forty million dollars over five years, thereafter increasing to one hundred million dollars for a further five years, eventually increasing, according to some press reports, to two hundred million dollars
- Other sports companies which have followed in the wake of NIKE offering such sponsorship include Adidas, which sponsors Lionel Messi, reportedly for a lifetime deal of twenty-five million pounds a year and Gym Shark, a well-known brand, sponsoring athletes including Katie Taylor and Francis Ngannou
Clearly, sports star sponsorship reaps enormous profits resulting from sales of, inter alia, the sponsor’s clothing equipment.
Away from the sporting arena, the McDonalds Corporation is a massive example of successful exploitation of IPRs.
Customers instantly recognise the distinctive ‘Golden Arches’, signifying the presence of a McDonalds outlet, which in themselves, in or around 2010, carried a value of around $34,000,000,000.00.
No matter where you are in the world, upon seeing the ‘Golden Arches’, you know what the brand is and the products being sold.
The ‘Golden Arhes’ are just one of the IPRs held by the McDonalds Corporation.
However, even goliaths such as McDonalds has its own difficulties with regards to the goodwill and value of its Trade Marks. It encountered a dispute in respect of “Big Mac” – Supermac’s (Holdings) Ltd vs. McDonald’s International Property Company, Ltd CANCELLATION No 14 788 C (REVOCATION) before the EUIPO in respect of its “BigMac” Trade Mark evidencing that assumptions about Trade Marks should not be made.
Further examples of the value of an IPR to its owner.
- As security which a company may offer when seeking to raise capital. Recently, SUPERDRY entered into a Licensing Agreement with Cowell Fashion Company, (‘CFC’), which covers South Korea and Asia, worth £40,700,000.00. Under the terms of the Licence, CFC is entitled to own and use the SUPERDRY brand in specific markets
- Where a new company is seeking a capital investment, rather than requiring a Personal Guarantee from one or more directors, a proposed lender may be prepared to exercise a lien over the available IPRs which would be discharged when the investment has been repaid
- IPRs may also be sold, assigned or transferred
How Can We Assist?
In circumstances where it is wished to exploit IPRs, in whatever manner, it is absolutely essential to ensure that not only are all of the terms that have been agreed are clearly set out in a written detailed Agreement but that all conditions and restrictions of use of the IPRs are documented.
Should the commercial activity involve the granting of a Licence it will be necessary to confirm whether it amounts to an Exclusive Licence, a Sole Licence or a Non-Exclusive.
Before seeking to exploit your IPRs, it is essential to ensure that the IP is properly protected by appropriate registration of the nature outlined above.
The team at KANGS is highly experienced in advising upon all matters involving the protection and exploitation of IPRs and will be pleased to assist and provide such expertise.
Who Can I Contact for Advice & Help?
Please do not hesitate to contact the team at KANGS through any of the following who will be pleased to speak to you:
Tel: 0333 370 4333
Email: info@kangssolicitors.co.uk
We provide initial no obligation discussion at our three offices in London, Birmingham, and Manchester. Alternatively, discussions can be held through video conferencing or telephone.
