What you need to know about intellectual property rights

Published: 15 Aug 2014 09:30

HAVING a powerful and vibrant website is a given for businesses wanting to engage with existing and potential customers. However, whether operating an e-commerce site, offering a service or providing advice, there are potential threats and pitfalls for all companies operating online - particularly when it comes to protecting their intellectual property (IP).

By Deborah Niven

The law relating to intellectual property rights and protection of goodwill and reputation is essentially the same online as it is offline. An online presence simply adds a further layer, and possible complexity, to the legal issues.

With the right information businesses can protect their intellectual property and at the same time avoid a situation where they could be pursued for infringing a third party's rights.

Intellectual Property has a wide meaning, but in the context of this article I refer to branding, reputation, goodwill, copyright, and trademarks. Here are some key issues to consider:

Selecting Domain Names

Having the right domain name provides a powerful business tool, driving online traffic and acting as the online face of a business or brand. Therefore, choosing the right domain name and being able to use it to its full potential is vital when setting up and developing a website.

Domain names are offered on a first come first served basis and problems can arise as a result e.g

• A third party deliberately registers a domain name knowing that another party needs or would like it and then seeks to sell the name to that party, or uses it to undermine the other party. This is referred to as "cyber squatting" when different

• Different parties have competing legitimate interests in the same domain name.

The registration of a domain name does not of itself create an intellectual property right. However, since domain names are used by businesses to act as a source of information on the internet, then it can be argued that this acts as a trade mark and therefore attracts protection, either from registration as a trade mark, or from the common law claim for ‘passing off'.

Passing Off - or misrepresentation

A claim under passing off is intended to protect the goodwill or reputation which is attached to the relevant goods or services. It covers situations, whether or not intentional, which may lead the public to believe that the goods or services on offer are the goods or services of another business (the Claimant). As a result of this mistaken belief damage is caused to the claimant's business.

Passing off is a useful tool, traditionally used by a local business who finds another business operating under a similar name - often in a nearby location - resulting in confusion for customers.

This can happen with online businesses too as the internet has opened up a whole host of businesses who might not be geographically close to each other, but turn up next to each other in a search engine result.

Therefore, businesses should consider how their chosen domain name will appear on a Google search and who are their competitors are - particularly those who have been operating for some time and have a built up a reputation.

Trade Marks

If the domain name contains a key word which is also registered as a trade mark then infringement of a trade mark occurs if a third party uses it or something similar to it in a commercial context. (Section 10(3) of the Trade Marks Act 1994). Examples include:

• a third party uses it in the course of a trade, in relation to goods or services

• a sign is used which is identical with, or similar to, that trade mark

• where the trade mark has a reputation in the UK

• the use of the sign takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the trademark

It is a good idea for a business to search the intellectual property office website to check whether the chosen domain name is a registered trade mark. If it isn't registered, it is worth a business registering its own name or brand as a registered trade mark. The process takes around 6 months, and costs approximately £500- £700. A registered name and using the trademark ® sign is a warning to competitors a name is registered and builds brand awareness among customers.

Avoid misusing Google Adwords

Google's AdWord service which allows businesses to reserve keywords can be a vital e-marketing tool. When one of those keywords is entered into Google's search engine, the brand owner's URL and a short commercial message will appear as a sponsored link on the upper part or right hand side of the results screen.

A high profile case involving Interflora and Marks & Spencer, has focused on passing off and trade mark infringement within the context of Adwords.

In the case of Interflora v Marks & Spencer, (21 May 2013) M&S used the key word 'Interflora' which resulted in the display of adverts for M&S's flower delivery service which Interflora claimed infringed Interflora's trademarks. Interflora said a significant proportion of consumers who searched on Google for 'Interflora' and then saw or clicked on M&S's adverts which were displayed in response, believed incorrectly that M&S's flower delivery service was part of the Interflora network.

Key word advertisers should consider whether a significant proportion of reasonably well-informed and observant internet users would be unclear on whether there is an economic connection between the advertiser and a trade mark owner. If so, there is a risk of infringement. The burden of proof in a double-identity case is on the advertiser. The law on this is still developing and M&S have been given leave to appeal.

Setting up your website

Businesses must also be aware of how to protect what they make available on their websites and how to avoid infringing rights belonging to third parties.

A large proportion of websites comprise works which are protected by copyright e.g the text, the software itself, graphics, music, photographs and logos. Copyright generally comes into being without registration or any other formal requirements - it exists once an original work has been created.

Even if a website has been commissioned by a third party, then the copyright remains with the designer. It is a common misconception that if a business has paid for a website or other design service, the ownership immediately passes to the purchaser. In fact, ownership of the designs remains with the designer and the party who has commissioned the work will have a licence to use these, although use may be limited. Businesses should try to ensure that the copyright is assigned to them as website owners, so that they can amend or develop the website as necessary.

Businesses should obtain appropriate licenses when using graphics or photographs belonging to a third party on a website. Also, they need to be vigilant about their own copyright and put suspected infringers on notice as soon as possible. It is worth including copyright notices on websites and to consider monitoring the internet through search engines to identify conflicting rights or infringers, particularly in relation to trademarks. There are a number of companies which offer trade mark monitoring services, however as unlawful threats of trade mark infringement can be actionable, great care should be taken before raising such allegations.

In an increasingly competitive digital landscape, savvy businesses will be constantly harnessing new e-marketing and online tools to remain competitive. Protecting your brand on-line need not be daunting. The first step is to be aware of your rights and of any possible threats. Then you can take preventative measures to police the situation as outlined in the tips below.

Top 10 Tips for On-line Protection

1. When registering domain names, consider registering slight variations

2. Register a trade mark for your company name, brand name or logos.

3. Take care to ensure that trade mark and domain name registrations are not allowed to lapse.

4. Carry out regular online checks against your registered trade mark or company name to ascertain whether there are any threats to your brand against which you should be aware and/or take action;

5. Place copyright notices on your website and on any photographs on your site.

6. Make sure that you have the right to use any images, graphics or text on your website. If you have a licence to use these for limited purposes, make sure you know the limits of the licence.

7. Create your own content and text for the website; don't be tempted to copy others.

8. Have clear website terms and conditions and a privacy policy.

9. Monitor use of your own name, brand and website content.

10. Take steps to protect your data and sensitive information to ensure that if key employees terminate their employment they are not able to use such information.

Deborah Niven is an associate solicitor specialising in intellectual property. Although based at Keeble Hawson LLP in Sheffield, she advises clients throughout the UK, including in the east of Scotland.

Jump to first paragraph.