Intellectual Property Issues for Corporate Innovators
In 2024, Intellectual Property (IP) continues to be a vital intangible asset on the balance sheets of many organizations. It plays a crucial role in fostering competitive advantage in the ever-evolving innovation landscape. IP rights, arising under both common law and statute, protect a broad range of intellectual efforts. These rights fall into two categories: registrable and non-registrable.
Registrable IP Rights in Australia (2024)
Two key registrable IP rights affecting software development projects in Australia include:
1.Trade Marks
2.Patents
Non-Registrable IP Rights in Australia (2024)
Three non-registrable IP rights with implications for software development are:
1.Copyright
2.Trade Secrets
3.Confidential Information
Identifying the IP rights in innovation projects
Trademarks
Registering a trademark under the Trade Marks Act 1995 (Cth) is a way of protecting a brand to ensure that it can be promoted with less likelihood of being confused with other brands. A registered trademark is a vital component of an effective marketing strategy to ensure that the brand is more capable of being protected. A trademark can be a letter, number, word, phrase, sound, smell, shape, logo, picture or aspect of packaging or any combination of these.
Too often innovators launch new products without conducting any searches of the trademarks register only to receive a cease and desist letter from the registrant of an 'allegedly similar' trademark. Subsequently, the choice is to rebrand and apologise profusely or defending trademark infringement proceedings, either way, prevention would have been preferable.
With increased digital marketing and e-commerce, conducting thorough searches of both national and global trademark registers before
launching new products is even more critical. This ensures brands avoid the risk of infringement disputes, especially given the heightened
focus on global intellectual property enforcement in the digital space.
Patents
A patent, registered under the Patents Act 1990 (Cth), grants exclusive rights, to the holder in possession of or control over a new invention in return for its public disclosure. This provides protection over the patent owner's intellectual property while:
- the invention is further researched and developed; or
- the patent owner commercialises and obtains the economic benefit from the invention.
During the patent period, the owner is entitled to defend the invention against infringement.
The Patents Act 1990 (Cth) recognises two types of patents, standard patents granted under section 61 Patents Act 1990 (Cth) and innovation patents granted under s 62 Patents Act 1990 (Cth).
In 2021, the Australian Government phased out the innovation patent system, with the final applications accepted on August 25, 2021. However, existing innovation patents will continue to be in force until their expiry. In software development, software patents are possible but remain challenging to obtain due to stringent requirements. For new products based on technology, consulting a patent attorney is still advised to determine if the creation is patentable.
Copyright
Copyright is a suite of rights, referred to in the Copyright Act 1968 (Cth), which is intended to protect the expression of an idea such as literary works, films, music, pieces of arts and computer software. Where copyright subsists it prevents other parties from reproducing that work. Copyright automatically protects the results of the owner's skill and effort in producing and recording the work in a material form.
Copyright provides the owner with certain rights including the right to publish, present or performs the works, adapt them or grant a right to use them to some other person. The classes of copyright which usually apply to IT projects include:
Literary works
Section 10 of the Copyright Act 1968 (Cth) provides that the term 'literary work' includes tables, compilations, figures and symbols expressed in words, as well as computer programs whether or not they are compiled. Literary works can be as little as paragraphs of text written for a website to entire books.
- Computer code: Defined as a literary work, computer code receives automatic copyright protection when recorded in a material form. This protection is significant given the proliferation of AI-driven and complex software in 2024.
- Artistic works: The Act protects various forms, including graphics, icons, and UI elements often used in software interfaces.
With the growing use of AI in generating content, copyright protection for AI-generated works has become an area of debate. While AI cannot hold copyright, the status of works created with AI assistance is subject to ongoing discussions in Australian copyright law. As of 2024, copyright still protects the expression of human creativity in software, but companies must stay informed about potential legislative changes.
Trade secrets
In simple terms, a trade secret is any secret commercial information that provides one business with an advantage over another. For example, trade secrets have been used by Coca-Cola for decades to ensure that its formula remains secret.
Despite the lack of a settled, legal definition of a "trade secret", their value is recognised both at law, and in equity. At law, restraints of trade can be legitimately used in order to prevent the disclosure of trade secrets, or to prevent the use of trade secrets by employees in any subsequent business or employment. Trade secrets are protected in equity by way of an action for breach of confidence even in the absence of contractual agreements restraining their use. Whilst its unusual, trade secrets can arise in software development projects.
Due to the changing nature of work environments and cybersecurity threats, organizations are increasingly using robust technological measures (e.g., encryption, access controls) alongside contractual agreements to safeguard trade secrets.
Confidential Information
When a party usually referred to as the (Discloser) communicates the information to another generally referred to as the (Recipient) it is considered confidential if that information:
- has the necessary quality of confidence; and
- has been communicated in circumstances importing an obligation of confidence.
For information to be confidential, it must not be public property, in the public domain, or common knowledge. Ultimately, there are no formal standards in which information must adhere to in order to be confidential. Different types of information may be subject to different requirements. In regard to information disclosed in person, whether a court will protect personal confidences depends on:
the nature of the communication;
- the relationship between the discloser and the recipient; and
- prevailing notions of public policy.
Perhaps the biggest myth that needs to be debunked in this area is that "Confidentiality agreements aren't worth the paper they are written on". This is just not true, provided of course that their terms are carefully and professionally drafted.
With increasing digital data sharing, the enforcement of confidentiality agreements has become more significant. Properly drafted confidentiality agreements (NDAs) continue to hold their weight in protecting sensitive information, provided they are detailed and legally sound.
Chain of Custody for IP
Ensuring a clear chain of custody for IP, particularly in collaborative innovation projects, is vital. This includes addressing IP ownership
with contractors and contributors to prevent disputes. Without explicit written assignment of IP rights, the creator (often contractors or
freelancers) retains ownership.
Key Takeaways for 2024
Identifying, registering, monitoring, and enforcing IP rights is a crucial part of any business strategy. Whether it’s the outcome of R&D, marketing efforts, or other intellectual endeavors, businesses must proactively ensure appropriate protections are in place and respond swiftly to infringements. As technology evolves, staying up-to-date with IP laws and practices is essential to effectively safeguard your intellectual assets.
