Primary navigation:

QFINANCE Quick Links
QFINANCE Topics
QFINANCE Reference

Home > Human and Intellectual Capital Best Practice > Protecting Your Intellectual Property—Registered Rights

Human and Intellectual Capital Best Practice

Protecting Your Intellectual Property—Registered Rights

by Jeremy Phillips

Executive Summary

  • There are many types of intellectual property right, only some of which are registrable; those that are registrable have little in common other than their registrability.

  • Registration of intellectual property rights provides objective and verifiable legal protection against competitors.

  • Registration provides national or regional protection and can be costly, requiring careful budgeting.

  • Failure to register a transaction involving an intellectual property right may have adverse legal consequences for the beneficiary of the transaction.

  • Once registered, an intellectual property right is presumed to be valid until the contrary is established, thus providing a powerful strategic weapon for controlling a market.

  • Registered intellectual property rights may be expensive to maintain, incurring renewal fees and, in some cases, regular policing against unauthorized use.

Introduction

Although some intellectual property rights come into existence on the creation of their subject matter, most intellectual property rights are not recognized by law until a process of registration is completed. Patents for inventions, trademarks, and some types of design are generally subject to registration systems.

Patents protect inventions that are new, nonobvious, and industrially applicable. Trademarks protect words, names, logos, product packaging, and shapes, among other things, that enable the consumer to distinguish the goods or services of one business from those of another. Designs protect the aesthetic and not totally functional elements of the shapes of manufactured products.

Registration of each of these rights enables others to ascertain: the nature of the right protected; legal entitlements of owners and users of the right; and information from which the expiry date of that right can be calculated.

Registration is not synonymous with examination: It may follow a rigorous, often interactive application procedure over a period of months or years—this is usually the case for patents and trademarks—or it may only require a deposit, as in the case of some designs.

Registration and Certification

Proof of registration of any interest in an intellectual property right is necessary if that interest is invoked in litigation. In patent and trademark infringement proceedings, for example, a court will accept a certificate of entitlement to that right as evidence. Registration helps a prospective licensee of a right to identify who must be approached for a license request. When a business is acquired, registration enables a due diligence search to find out which of the assets used by the target business are owned by it. Where the information recorded on the register does not accord with reality, it may be necessary to seek rectification of the register, a process that may be both slow and costly.

In some circumstances the state of the register will not accord with reality because of the length of time taken by the registry in question to record an assignment or license. Sometimes the information on the register may be up to two years out of date, or more. Local practitioners should be able to advise, in any given jurisdiction, on the state of the register.

International, Regional and National Registration

With some exceptions, patents, trademarks, and designs are rights granted under national law; the scope of their exercise is thus coextensive with national borders. The owner of the rights must therefore factor into any business plan the identity and number of countries in which protection of the registered right is needed. More than 200 countries provide some form of intellectual property protection, but the cost of obtaining registration in each of them is often prohibitive for even the wealthiest corporations (the cost of truly international patent protection can easily exceed US$2 million, and many new products and processes incorporate several separate patentable concepts). Therefore, proprietors have to balance the cost of formalities in protecting the right against the potential value of exploiting that right in a particular country. In all cases, the intellectual property owner incurs official fees as well as those of local professional representatives. In the case of patents, further expense is incurred in searches of the patent records and technical literature to see whether an invention has been anticipated by an earlier patent, and by the cost of translating the patent into the language of each country in which protection is sought (this may exceed 85% of the total cost). For trademarks, additional expense is incurred in finding out whether the mark to be registered would be likely to cause confusion to consumers or damage an earlier mark.

The World Intellectual Property Organization (WIPO) administers facilitative systems that enable an applicant to seek registration of a patent, trademark, or design in a multiplicity of countries through a single application that is processed by WIPO and then forwarded to the granting office of each target country. These schemes (the Patent Cooperation Treaty, the Madrid System for trademarks, and the Hague scheme for designs) reduce the cost and bureaucracy of international protection but do not remove the obstacles to registration that exist at national level.

Not all registered rights are limited by national borders. As an alternative to national registration, the European Union has introduced pan-European trademark and design rights that confer protection via a single registration throughout the 27 EU member states, and the African Intellectual Property Organization offers a single patent that covers 16 francophone African nations. The European Union does not yet have a pan-European patent; the European Patent Office, which processes and examines patent applications for up to 35 European countries, is not an organ of the European Union.

Back to Table of contents

Further reading

Books:

  • Bently, Lionel, and Brad Sherman. Intellectual Property Law. 3rd ed. Oxford: Oxford University Press, 2008.
  • Chisum, Donald. Chisum on Patents. New York: Matthew Bender, no date. 27 volumes, looseleaf, updated with revisions.
  • McCarthy, J. Thomas. McCarthy on Trademarks and Unfair Competition. 4th ed. New York: West Publishing, 1998–2008. Binder/looseleaf.

Websites:

Back to top

Share this page

  • Facebook
  • Twitter
  • LinkedIn
  • Bookmark and Share