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4 ways you can legally protect your tech start-up

4 ways to legally protect a tech startup blog post image

Many new entrepreneurs are very secretive of their new business idea. Their thinking is that if they were to share a business idea with others, they risk being copied. This is sometimes an unfounded fear and it is worth understanding how your startup can be legally protected and what options you have.

Can an idea for a startup be protected?

An idea itself cannot be protected under any intellectual property right. However  expressions of an idea can be protected, for example when they are artistic in nature, copyright could subsist. Examples of this include a painting, a poem or a song. A business idea itself is not considered an artistic work. This is why it cannot be protected as a copyright, but once you start building the business, if it requires original coding then you  could be copyright protected. The name under which a startup proposes to trade could be registrable as a trade mark, as another example.  Similarly, if the business idea consists of producing an innovative product then there is a potential to file a patent.

In what ways can my startup be protected?

Use a nondisclosure agreement (NDA)In cases where the business idea itself cannot be protected by an intellectual property right, as is often the case, an NDA can be used to prevent others from sharing or benefitting from the idea. Developers, employees and any others you share your idea with can be bound by an NDA. An NDA is a legal contract between two people that states what information will be shared between them and what information will not be shared with other people.

Some entrepreneurs have a policy of getting everyone to sign an NDA including investors. Some investors consider this to be an unnecessary step so it is advisable that you remain flexible when dealing with investors. They come across a large number of ideas and their intention is not to copy the ideas, only to judge their suitability for investment.

Read our blog post on 7 ways to legally protect your mobile phone app 

Start building your business and obtain copyright protectionAs with many tech startups, you will have to code it, which could attract copyright protection. If you are getting developers to do the work, then you can and should ask them to assign the copyright to you. Copyright protection arises automatically  in most countries and it is important to keep all records evidencing creation/authorship so that the copyright can be verified.

It is worth mentioning that open source frameworks and platforms (WordPress, Drupal etc.) are copyright of their creators and are available under specific creative licenses. If you to build any part of your startup using such open source tools, you will not be protected under copyright laws.

File a patent application if possibleA patent protects new inventions. In the UK and the EU, computer software programs are generally not patentable. There are exceptions to this rule, but you have to create a new method or process to obtain a patent. A software app or part of it may fulfil the necessary requirements to obtain patent protection. It is best to get advice from a patent attorney who can advise you on whether your tech startup is patentable.

If you are creating a new innovative product, then a patent is absolutely necessary so that you can financially exploit your product and stop others from making unauthorised use of it.

Register a trade mark for your brandIt is incredibly common to see the names and brands of successful startup ventures being used by others. Identical or similar names are considered trade mark infringement in certain circumstances and registering these as trade marks, assuming they fulfil the requirement of distinctiveness. A trade mark will make it easier to stop copycats in the markets you have filed your trade mark in. You can trade mark your name, logo, slogan and even a specific design. This is one important method of making sure your tech startup is protected from being copied by others. Especially your branding.

Having a tech startup can be hard work. Knowing how you can protect it is important. After all, you want to benefit from your hard work and not have to worry about being copied.

If you need help or advice about intellectual property (IP) protection for your startup, please contact us on 0207 791 9050 or email us on trademarks@freemanharris.co.uk

Unregistered and registered design rights

What rights does your registered and unregistered designs have?

Good design lies at the heart of any good business. An excellent design transforms a product into a brand- think Coca-Cola’s distinctively curvaceous bottle or the iPhone’s iconic product design- so it’s important to protect the appearance of your product. The most common methods of protecting the design of your product here in the UK are through registered and unregistered design rights.

What is a design?

It’s not just fashion brands that need design protection. Your ‘design’ is anything related to the visual aspects of your product. It could be a distinctive logo, a pattern you decorate your goods with, symbols, product shape or packaging.

In simple words, a registered design is protection for the appearance of the whole or part of your product.To register your design, it needs to be original and unique. A similar design cannot already exist in the marketplace.

UK Unregistered Design Rights

Here in the UK, we have a two-fold system of protecting design rights; unregistered and registered design rights. Unregistered design rights are automatically given with no formal application. You acquire the rights by creating a product to the design, or producing a design document. If a third party copies your design, they will have infringed upon your design rights.

Unregistered design rights don’t last forever. They expire 15 years from the year the design was first recorded, whether in manufacture or a design document. However, if your product containing the design is made available for sale or hire anywhere in the world  within the first 5 years then the date shifts to 10 years from the first sale. This mean that for most commercially useful designs, the unregistered design rights last for 10 years from first marketing. In the last 5 years of protection, any party is entitled to obtain  a Licence to make or sell the design.

Unregistered design rights exist throughout the European Union as Community Unregistered Design Rights, giving roughly the same amount of protection but lasting for only 3 years.

UK Registered Design Rights

Registered design rights are received through a formal application to the UK Intellectual Property Office. In order to qualify for protection from UKIPO, the design has to be ‘new’ and show ‘individual character’. It can’t be a generic mark or a design that produces no overall different impression from other designs. Registered design rights grant you monopoly rights, that is, only the holder of the rights has the exclusive right to use all or part of the design.

A UK Registered design can last for 25 years of protection, but has to be renewed every 5 years.  Registered design rights exist throughout the European Union under the name of Registered Community Designs. Like UK Registered designs, the protection lasts for 25 years but must be renewed every 5 years.

So why register for Registered Design Rights when Unregistered Design Rights exist?

The difference between registered and unregistered design rights is all about the level of protection. Registered design rights have much better protection than unregistered designs.

Say, for example, you think another company is infringing on the design of your product. If the mark is unregistered, you have to prove that the third party has copied your design in order to win against them. You have to prove that they took the idea directly from you to make their product. If your product is a registered design, then you only have to prove that their product is too similar to yours- regardless of whether the alleged infringing design was created entirely independently or with knowledge of the design.

There are other reasons as to why registered design rights; registered designs last much longer than unregistered designs (25 years for the former or 3 to 10 years for the latter);  Unregistered design rights are limited, they do not give you monopoly over a design. On the other hand registered designs can provide extra protection on top of registered trade mark rights if your logo has graphic elements; and finally having a registered design helps your market competitiveness by adding business value. After all, shows your commitment to the product and is a registered design is an asset like any other- it can be sold, licensed out or transferred as the owner sees fit.

A comparison table of unregistered and registered design rights in the UK and EU

Protection under rules of ‘passing off’

Passing off law

It is often believed that the only way to effectively protect your company’s sign (name, slogan, logo, colour, shapes etc) is to obtain a trade mark registration. This might be true in most cases, but in others it is also or only possible to protect your sign through other intellectual property (IP) rights. Copyrights, unregistered designs and laws of unfair competition can potentially be used when another party is unlawfully using any of your signs.

In the UK, one form of protection that is often relied upon (sometimes in conjunction with claims for registered trade mark infringement) is the law of passing off, which is a common law right. Passing off is used to protect signs that cannot be registered for e.g. packaging, get-up or colours,  or signs that have not been registered but have acquired goodwill.

So what is passing off?

Passing off is defined as making false representation which is likely to make customers believe that a company’s goods or services are those of another. Usually, this happens when someone has copied someone else’s sign e.g. packaging, slogan, trade name… without getting permission, and uses it in a way that creates confusion amongst the public.

What are the passing off requirements?

In order to prove passing off, you will have to fulfil three essential requirements which were set in the Jif Lemon case:

  1. Goodwill: you have to establish that your goods or services have acquired goodwill. There is no particular definition of goodwill in relation to passing off, however it has been described as “the benefit and advantage of the good name, reputation and connection of a business. It is the attractive force which brings in custom”. Goodwill and reputation are often connected but goodwill should not be confused with reputation. Goodwill isn’t built only because you are reputable in the country, but also from actively selling your goods and/or services in the country to acquire goodwill.
  2. Misrepresentation: you have to demonstrate that the public has been led or will likely be led to believe that the goods and services provided by the defendant are yours or have some association/connection to yours. The fact that the defendant has intentionally used your goodwill or not is irrelevant.
  3. Damage: you have to establish that you have suffered or will likely to suffer damage due to the misrepresentation.

Each passing off action is determined on its own individual facts, but they all require the fulfilment of the three above elements. If you do not manage to provide enough evidence to fulfil one of those requirements, your passing off claim will fail.

It is important to be aware of the fact that there exists an extended form of passing off which was established in the Advocaat case. In that case, five characteristics need to be present to bring a valid action for passing off in the extended form. Due to the relevancy of this article, this will not be explored in details but you  can visit this link to see if this form of passing off applies to you.

Who may use passing off?

You may assume that passing off can only be relied on by big established businesses, but that is not the case . Small and medium businesses should explore the possibility of seeking legal actions based on passing off. Such actions may be brought by any traders who can prove the existence of the three requirements mentioned: goodwill, misrepresentation and damage. The tricky part for the trader is to have enough evidence to show sufficient goodwill in a certain location or among a group of customers in the UK.

When use passing off?

Trade mark registrations are highly recommended to protect your brands, because generally it will be easier and be less costly to sue an infringer. However, when you cannot rely on a trade mark registration, passing off actions should always be considered.

Moreover, it provides protection for signs which have not been registered formally or which cannot get registered (some signs are not  in compliance with trade mark law for e.g. descriptive marks or get-up). As explained above, you may rely on the law of passing off for any signs or characteristics recognised by the public as being associated with any goods and services. If you believe you can prove the existence of the three elements of passing off, you should make a claim on that basis.

The downside of passing off

We have established that passing off actions should always be considered when facing unlawful use of your brand, especially when you have no registered rights. However, you have to be aware that passing off actions have to be brought before British courts, and this is very costly and time consuming. This is because a high amount of evidence has to be presented to prove passing off. When you are a small or medium sized business, this can be very damaging and often leave you defenseless. That is why, it is important to also register your trade mark and/or design when possible, to consider all your options and never exclude other actions that could be taken.

Should you need assistance in bringing an action of passing off or any other intellectual property matters, our legal experts are available anytime Monday to Friday 9am-5pm to discuss this further.

Trade mark infringement on Google Adwords

Trademark infringement on Google Adwords

Does the use of a trade mark in Google Adwords considered to be an infringement? What about the use of trade marks as keywords to trigger an ad on Adwords?

Early last year, Samsung gained some positive coverage within the marketing industry for running the ad shown below.

Samsung ad on iPhone trademark in Adwords

Terminology

Keyword – A keyword in online advertising is a word or phrase which can be used by an advertiser to target their products or services to an audience. When a search engine user types in a keyword, they will see ads from advertisers who have selected the keyword to display their ads.

The ad was shown to users searching for the then new ‘iPhone 6s’. The ad cleverly omitted the use of the word ‘iPhone 6s’ while being creative enough to mention their own new phone model. The use of registered trade mark as keywords for advertising is one issue which has been taken to court by Interflora against M&S.

Use of registered trade marks as keywords for ads

Google Adwords and other similar tools allow users to select keywords, which they can bid upon to display their adverts. This is a common and popular method of advertising on search engines like Google. The Samsung example above displays an Adwords ad.

In the case brought to the court by Interflora, the company claimed that M&S was using its trade mark to advertise their flower service. They sued M&S for trade mark infringement. The High Court found that the advertisements led users to believe that the M&S flower service was part of Interflora. M&S took the case to the Court of Appeal on various grounds, one of them being wrongful burden of proof on the defendant to prove their ad made a clear distinction between  M&S and Interflora.

Read more about the Interflora v M&S case.

The Court of Appeal overturned the judgement of the High Court. They came to the conclusion that the there was nothing objectionably wrong with keyword based advertising. The argument put forward was that in such scenarios, trade mark rights should not prevent fair competition.

This case sets a good precedent for the use of keywords to advertise on. Based on this case, the onus is upon on the claimant to prove that their trade mark was infringed.

The use of registered trade marks as keywords for advertising is commonly practised today. The European Court of Justice (ECJ) had set the following principle after the Interflora v M&S case:

Offering a keyword which is similar or identical to a registered trade mark is not ‘use’ of the trade mark in the course of trade (arts 5(1) and (2) of the TM Directive 1989 (repealed and superseded by TM Directive 2008) (Google France)

However, one the preceding principles also state that:

The owner of a trade mark with a reputation (TM Directive 1989, art 5(2) repealed and superseded by the TM Directive 2008) can prevent a competitor from advertising using a keyword which corresponds to the trade mark where without ‘due cause’ it takes unfair advantage of, or is detrimental to, the mark’s distinctive character or repute.

Google Adwords has an updated policy which reflects the rules by the ECJ. They do provide a complaint form for matters where the trade mark owner is unhappy with the use of their trade mark in Adwords.

Use of registered trade marks as keywords in ads

In terms of using a trade mark within the ad text,  if they are used, Google can investigate and restrict the use of trade mark with in ad. However, there are exceptions for Australia, New Zealand, the United States, Canada, the United Kingdom or Ireland. In these countries, trade marks can be used in ad text in the following cases:

  • Reseller and information websites – A trade mark can be used by a reseller if the product or its component are the primary product or service being sold on the landing page. There has to be a method of purchasing the product or service or display commercial information about it. Information pages should also have a landing page focused on the trade marked goods or services with informative details about it.
  • Authorised use – A trade mark can be used in ads provided the trade mark owner has authorised its use. The process involves obtaining permission from the owner using Google’s own authorisation form,

We have had enquiries where a business owner has requested assistance on what to do if their company name or trade mark is being used on Adwords. This blog post should clear up a number of issues surrounding the use of trade marks on Adwords and other similar advertising tools. Be cautious if you are planning on using trade marked keywords, If you have an issue with a trade mark, then it would be best to consult a professional.  All cases are different so for further advice, please contact us and we will help you over this matter.

7 ways to legally protect your mobile app

image of mobile phone and intro text to protecting your app

There have been plenty of great mobile apps in recent years that have gone on to be huge successes. Some could say that app development is in its ‘golden age’ right now. The app market is huge, and by the end of next year, there will be almost 2 billion smartphone users worldwide and not surprisingly by 2017, the app market will be worth $77 billion.

With the world becoming more globalised and connected by the internet, what this means as an app developer is that you can now sell your app by the millions all over the world. The fact that there have been so many app successes of late means app developers are moving fast to create the next big app.

However it is difficult to come with a great app like Uber or Whatsapp and that is why when you browse through the Google play store or Apple app store, you will find app clones, monetising off the ideas of someone else’s good idea.

If you currently have a great app idea or you have already created your app, you might want to know your legal rights to your app. Here are 7 ways to legally protect your app:

1. Get a non disclosure agreement

Creating an app isn’t a one man job, you’ll need a lot of brain power to get it off the ground. You’ll probably need to get some help from a freelance app developer who already have the technical skills to build something great. But how do you make sure that they keep the project confidential and that they don’t steal your idea after they’ve helped you?

Firstly, you could keep it vague without giving away the specifics by talking about the functionalities. For example, you can tell your app developer that you want your app to process PayPal payments, you want pictures to appear which you can swipe away or you want maps installed.

However the problem with not telling your freelance app developers the whole vision of your app is that they won’t be able to build your app the way you want it to built. It’s better for your app business if you can speak freely about your vision rather than hiding the small details in the fear that your idea will be stolen.

The best way to do this is for you both to sign a non disclosure agreement before they start working on your project. An NDA is a legal contract between two people that states what information will be shared between them and what information will not be shared with other people. The great thing about a non disclosure agreement is that you will have peace of mind that your idea or trade secrets are kept confidential.

2. Start building your app

Having an idea or concept is one thing but building it is another. Once you’ve got the code down, no-one can outright steal it from you. Copyright law can only protect how an idea expresses itself, it doesn’t protect the idea itself. That is why if you have a great app idea, the best thing for you to do is to start coding it and saving it onto your computer.

3. Get your freelancer to sign over the copyrights to you

Although building your app is a good way to protect it, sometimes you don’t have the skills to write the code or design it and you need to bring someone on board. Since your contractors are the ones who are essentially ‘creating’ your app, technically from a copyright point of view they own the copyright. This is why you need to get them to sign over the copyrights to you once they’ve finished the project for you. That way if your app is a huge success, they can’t come after you claiming to have copyright to it.

4. Get a trade mark for your app’s name or logo

If you browse through the app store, you will find plenty of clones. These clones could be infringing trade mark but they are not infringing copyright. Alternatively they could be infringing copyright but not infringing trade mark.

The good news is that it is easy to make a copyright infringement claim if you have two things: copyright ownership and proof that the defendant had access to copy the app. The first is easy to demonstrate in a legal battle if you have all the necessary paperwork. However it is the second part that is tricky to prove. How can you prove that they directly copied you?

5. Consider a patent application

The general rule, in the UK and the EU, is that computer software are not patentable. However there exists a few instances where a computer software has been patented. So in exceptional circumstances, your app or part of it may fulfil the necessary requirements to get a patent. The best way to find out is by getting in touch with an patent attorney to see if your app meets the requirements to get a patent.

6. Pursue the developers who infringe your work

If someone is copying your app, take action against your infringers. Pursuing people who outright copy you will deter other people from doing the same.

Although you may have the copyright to the original app, if someone was to take your idea and create the same app game and add additional features to it such as different characters or different scenes then your app and their app starts to become differentiated. Both sides can have solid arguments in a legal battle.

In 2013, the Flappy Bird founder decided to take down his app which led to app opportunists to create clones of his app and make money from his idea. At its hype, copycat developers uploaded 60 Flappy Bird apps a day, equivalent to one clone every 24 minutes. These copycat developers would argue that they added new elements to the game and therefore it is a new game altogether.

Google have 1.6 million apps in their play store and they don’t have someone who checks for quality or copyrights when apps get uploaded. Your app could be cloned and uploaded to the play store without you realising it. It would only be taken down by Google if someone flags it as fraudulent. This means that they can profit from your original app before it is removed. If you have the copyright and trade mark ownerships, it should be easier to have clone apps taken down.

7. Protect yourself from infringing on the work of others

A lot of the time we are inspired by the works of others and from what we’ve seen already in the play store. The best way to avoid infringing on the works of others is to try to be as original as possible. Although Flappy Bird made lots of money in the time that it was up and Uber is dominating the cab industry, try not to just create what is popular at the minute. Instead create something original that fills a real need and try to avoid replicating the business models of other apps.