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Legal Aspects of Running a Business. Brighton Summer School.
Tuesday, 13th June 2017
(c) Copyright Reydoog Limited 2014‐2017 1
Legal Aspects of Running a Business
By Ian Goodyer
For Bee Purple Summer School
June 2017
© Copyright Reydoog Ltd 2014‐2016. All rights reserved
Today’s agenda
• Legal Agreements
• Organisational structure• VAT and how it works• Intellectual Property
• Trade Marks• Copyright• Patents• Designs
• NDAs• Exercises
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Legal Aspects of Running a Business. Brighton Summer School.
Tuesday, 13th June 2017
(c) Copyright Reydoog Limited 2014‐2017 2
Legal Agreements
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What is a legal agreement or ‘contract’
• A legally binding agreement between two (or more) parties
• Essential ingredients required to create a valid contract• Offer & Acceptance• Consideration: an element of exchange
• An Intention to create legal relations• Certainty as to the terms of the agreement
• Capacity to contract• The contract must be legal
• If one or more of these ingredients are missing contract will either be void, voidable or unenforceable.
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Tuesday, 13th June 2017
(c) Copyright Reydoog Limited 2014‐2017 3
“Legally binding”
Legally binding means:
• You have to stick to it or the other side can take you to court
• If you break the agreement you will lose in court and • Have to pay other sides costs. • Pay damages for loss suffered by other side
• Perhaps be issued with a court order or injunction which will make you do or stop you doing what you agreed.
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What can legal agreements cover
• Supply / sale contracts
• Employment contracts
• Confidentiality contracts
• Licences
• Shareholders agreements
• Many many many others
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Legal Aspects of Running a Business. Brighton Summer School.
Tuesday, 13th June 2017
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General Principles
• Doesn’t need to be in any particular form• Can be ‘scribbled on back of envelope’ as long as intention is clear and both sides agree it
• Can be verbal – although proof then is often hard to obtain (unless recorded or witnesses)
• Can be inferred from actions
• Best to have a written properly structured and signed contract• Much easier to enforce
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Do you have to use a solicitor?
• Sometimes when it gets complex
• Usually can manage with a stock template
• Stock templates can be obtained from• Membership organisations: IoD, Federation of Small Businesses (FSB)
• Businesses that sell such agreements – e.g. www.simply‐docs.co.uk
• Bee Purple• Friends / agreements you have received from others (watch copyright!)
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Legal Aspects of Running a Business. Brighton Summer School.
Tuesday, 13th June 2017
(c) Copyright Reydoog Limited 2014‐2017 5
Structure of a typical agreement
• Preamble – “This agreement is made on [date] between”• Parties. Needs to be accurate. Who is bound by agreement?• Purpose (Recitals). Why is contract being made?• Definitions. What does each term mean?• Details
• What each side will do and by when?• What happens if they don’t?
• Term and termination. How long will it last for and how can it be stopped?• Misc clauses – e.g. English law• Signatures / witnesses• Schedules
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Exercise
• Look at the example contract and identify the different parts.
• Is it easy to understand?
• When would you use this contract?
5 MINUTES
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Legal Aspects of Running a Business. Brighton Summer School.
Tuesday, 13th June 2017
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Company Structure
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Two main choices for company structure
Do it as part of yourself
• You and the business are the same thing
• You can be personally sued
• Easy to start and stop
• Paperwork relatively easy
• Hard to get investors
Do it as a separate entity
• The business is separate from yourself
• You have ‘limited liability’
• Relatively hard to start / stop
• Tax efficient
• With Ltd Company can issue shares to investors
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You have 2 options1. Run the business as an extension of yourself – self‐employed, sole trader,
partnership2. Set up a separate entity – Limited Company, LLP, Charity
Legal Aspects of Running a Business. Brighton Summer School.
Tuesday, 13th June 2017
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An Extension of You – Self employed
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• Also called sole trader• You and the business are intertwined• Starting is easy – fill in SE1 form at HMRC. Stopping is easy, tell HMRC you have stopped
• Tax• You complete a ‘self assessment’ tax return each year (6th April – 5th April)• On self‐assessment tax return you enter amount of profit made and pay tax on it as an employee would
• Pay two types of National Insurance• Class 2. £2.75 a week by direct debit. Payable unless profit <£5,885 a year• Class 4. Payable at 9% of profit between £7,956 and £41,865 and 2% above that
An Extension of You ‐ Partnership
• Same as self employed except:• Partnership files own tax return stating profit made between 6th Apr and 5th
April next year
• Each partner then enters proportion of profits on their self assessment form
• Need legal agreement between partners:• What if a partner wants out?
• What if a partner is hit by bus?
• What if the partners disagree about a course of action?
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Legal Aspects of Running a Business. Brighton Summer School.
Tuesday, 13th June 2017
(c) Copyright Reydoog Limited 2014‐2017 8
Separate Entity – Limited Company
• Forming a new company is like giving birth to a new baby
• Can write its own contracts, be sued independently of you, have its own bank accounts and create its own personality
• Forming a Limited Company• Fill in online form at Companies House – company name, address for service, shareholders (owners), directors (runners). Pay £15
• Maintaining a Ltd company• Inform Companies House of changes• Every year send Companies House abbreviated accounts and summary of company details• Send HMRC detailed accounts each year – often needs help of accountant• Pay corporation tax – 21%
• Closing a Limited company• Relatively difficult. Winding up / striking off or liquidation and administration
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Separate Entity – Limited Company
• The people who run a company (Directors) may not be the people who own the company (Shareholders)
• Earning money with a Limited Company• Money earned by company is not your money!• Owned by shareholders. Shareholders can be paid dividends. Tax efficient.• As a Director/employee company can pay you salary – not as tax efficient• Service company – IR35 rules
• Getting investment• Investors can be given shares in exchange for their funds. This makes investing in a company easy
• Shareholders agreement• If more than one shareholder, an agreement is likely to be required
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Legal Aspects of Running a Business. Brighton Summer School.
Tuesday, 13th June 2017
(c) Copyright Reydoog Limited 2014‐2017 9
Separate Entity – LLP
• Limited Liability Partnership• Bit of a mix between a partnership and a company
• Easy to bring in or retire partners in the business but hard to get investment
• Usually used by ‘Professional service” firms – accountants / solicitors
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Separate Entity – Charity
• Charity• Cannot make a profit – any surplus must be reinvested in business
• Instead of shareholders a charity has ‘members’ or ‘guarantors’
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Advantages over Ltd Co
• No tax on surplus income, reduced rates and stamp duty. Other tax benefits
• Access to wider range of grants
• Credibility that represent stakeholder interests
Disadvantages over Ltd Co
• More paperwork and rules. Harder to register / more complex
• Restrictions on things you can do –some ‘commercial activities’ not allowed
• Cannot get investors• Increased accountability / public records
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Tuesday, 13th June 2017
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Exercise
What is the right company structure for you?• Do you need investors?• Will you need partners?
• Will the activity be temporary?
• Do you need limited liability? Is there a possibility of being sued?
• Is being a charity important for your image?
• Do you want to make a lot of money out of this?
• Is it going to get really big?
5 minutes – discuss in pairs and feedback
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Demystifying VAT
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Tuesday, 13th June 2017
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What is VAT?• A tax on consumption
• Paid by the end user / consumer of an item or service
• Currently charged at 20% on most items
• ExceptionsTax Exempt 0% VAT 5% VAT
Insurance Books Gas / Electricity
Education / research Food Energy Saving materials
Postage Train / airplane fares Building work and materials
Professional memberships Printing Mobility aids for elderly
Rent Some bank charges Smoking cessation products
Physical education / sporting activities
Sales outside the EU Sanitary protection products
Charity shop sales
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How does VAT work?
• Organisations who are VAT registered collect VAT from their customers and give it to the government.
• In return any VAT they pay from their suppliers can be reclaimed
• The non‐VAT registered person or company who is at the end of the chain actually ends up paying the VAT
• VAT registered companies work as the government’s tax collectors!
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Example• John’s business buys some “Parts” from a VAT registered supplier. He pays £500+VAT for the Parts. The parts are
standard rated at 20%
• John makes the Parts into “Widgets”. These are also standard rated for VAT purposes
• He wants to make £500 profit from selling the widgets
Questions:
1. If John’s business is VAT registered:a) How much does he pay the supplier in total for his parts?
b) How much does he charge his customers if they are VAT registered?
c) How much does he charge his customers if they are members of the public?
d) How much does he pay to HMRC?
2. If John’s business is not VAT registered:a) How much does he pay the supplier in total for his parts?
b) How much does he charge his customers if they are VAT registered?
c) How much does he charge his customers if they are members of the public?
d) How much does he pay to HMRC?
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IMPORTANT QUESTION: Can John charge lower prices if he is VAT registered or not? What would his customers want him to be?
Example• John’s business buys some “Parts” from a VAT registered supplier. He pays £500+VAT for the Parts. The parts are
standard rated at 20%
• John makes the Parts into “Widgets”. These are also standard rated for VAT purposes
• He wants to make £500 profit from selling the widgets
Questions:
1. If John’s business is VAT registered:a) How much does he pay the supplier in total for his parts? £600 (£500+VAT)
b) How much does he charge his customers if they are VAT registered? £1,200 (£1,000+VAT)
c) How much does he charge his customers if they are members of the public? £1,200 (£1,000+VAT)
d) How much does he pay to HMRC? £100
2. If John’s business is not VAT registered:a) How much does he pay the supplier in total for his parts? £600 (£500+VAT)
b) How much does he charge his customers if they are VAT registered? £1,100
c) How much does he charge his customers if they are members of the public? £1,100
d) How much does he pay to HMRC? £0
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IMPORTANT QUESTION: Can John charge lower prices if he is VAT registered or not? What would his customers want him to be?
Legal Aspects of Running a Business. Brighton Summer School.
Tuesday, 13th June 2017
(c) Copyright Reydoog Limited 2014‐2017 13
How and when to register for VAT
• Easy procedure via HMRC website
• You have to register for VAT if turnover is more than £85,000 in any 12 month period
• You can volunteer to register for VAT early
• When might you want to volunteer to register for VAT early?• When you sell to other VAT registered businesses (you can sell cheaper than non‐VAT registered businesses) and claim VAT back on purchases
• When you are a long way from market – lots of R&D. While making a loss HMRC pay you!
• If you are selling to the public – delay VAT registration!
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Intellectual Property
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Legal Aspects of Running a Business. Brighton Summer School.
Tuesday, 13th June 2017
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What are intangible assets and IP?Company
Tangible assets
Property
Vehicles
Computers
Intangible assets
IP
Patents
Copyright
Trade marks
Designs
Resources
Know how
Trade secrets
Domain names
Unique services / processes
Unregistered designs
Trading names
Customer / market
Contracts
Supplier / market info
Intelligence
Customer lists
Franchise
Licence holder
Reputation
Awards
Grants
Certifications
Financial assets
Cash
Current Account
Savings
Debtors
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How much are intangibles worth?
• “70% of a typical company’s value lies in its intangible assets, up from 40% in the early 1980s” (Gowers Review, 2006)
• UK investment in intangibles is one‐third higher than tangible assets ‐ £137bn to £104bn in 2008 (Digital Opportunity, 2011)
• 80% of value in S&P500 companies now attributable to “implied intangible assets” (Ocean Tomo, 2011)
© Ocean Tomo ‐ http://www.oceantomo.com/productsandservices/investments/intangible‐market‐value
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Tuesday, 13th June 2017
(c) Copyright Reydoog Limited 2014‐2017 15
Intangibles Characteristics and Properties
• Like tangible property:• Can sell / assign it• Can rent / licence it• Can use it yourself exclusively
• Unlike tangible property:• Doesn’t wear out• Can be ‘sliced and diced’• Are unique generally (can stop others copying you)• Generally, more it is used the more it is worth• Often time limited (apart from trade marks)
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Main types of IP
COPYRIGHT
Protects Creative works
Automatic
Long lasting
TRADE MARKS
Protects brands, names and trading style
Potentially lasts forever
Prevents impersonation
PATENTS
Protects ideas, inventions and new ways to do things
Very strong monopoly but expensive
Lasts 20 years
DESIGNS
Protects external appearance / look & feel
Registered and unregistered versions
Can last up to 25 years
Intellectual Property
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Tuesday, 13th June 2017
(c) Copyright Reydoog Limited 2014‐2017 16
Trade marks
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Trade marks
• Protect your name and reputation – brands
• Advanced disclosure does not prevent protection
• Can last forever as long as used and renewed
• Badge of origin / quality
• Must be used – subject to revocation for non‐use
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Registered Trade Marks Offer
• Exclusive right to use mark on your goods / services in specified territory.
• Prevents:• Use of same or similar sign on same / similar goods• Fixing of mark to goods or packaging• Offering for sale and advertising• Importing / exporting
• Right to use the ® symbol next to your trade mark
• Exclusions• Prior use
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What can be protected?
• Any sign that can be represented graphically• Names• Logos / shapes• 3D Shapes• Domain names• Slogans• Letters• Colours• Gestures• Sounds• (Smells)
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All trade marks and copyright belongs to their respective owners
Legal Aspects of Running a Business. Brighton Summer School.
Tuesday, 13th June 2017
(c) Copyright Reydoog Limited 2014‐2017 18
TM number 1. Bass red triangle
• Registered 01 Jan 1876
Manet's 1882 A Bar at the Folies‐Bergère
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Trade mark classes
• Goods and services divided into 45 ‘Nice’ classes – broad definitions.
• Too simplistic to say cannot have same mark in same class but a rule of thumb
• Detailed descriptions under each class
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All trade marks and copyright belongs to their respective owners
Legal Aspects of Running a Business. Brighton Summer School.
Tuesday, 13th June 2017
(c) Copyright Reydoog Limited 2014‐2017 19
What can’t be registered? Absolute grounds
• Lack distinctiveness
• Indicate quality, origin, quantity etc. of goods (e.g. “best burgers”) ‐ descriptive
• Customary language of trade / descriptive
• Shape relating to function or shape of goods themselves
• Immoral, deceptive or bad faith applications
• Specially protected emblems (a national flag, Olympic rings)
Who has a name for their product?© Copyright Reydoog Ltd 2014. All rights reserved
All trade marks and copyright belongs to their respective owners
What can’t be registered – relative grounds
• Identical mark for identical goods
• Identical mark, similar goods OR similar mark, identical goods and likelihood of confusion• Assessed on whole mark : visually, aurally and conceptually
• Identical or similar mark for different goods if the mark has a reputation and use would take unfair advantage of the existing mark
© Copyright Reydoog Ltd 2014. All rights reserved
All trade marks and copyright belongs to their respective owners
Legal Aspects of Running a Business. Brighton Summer School.
Tuesday, 13th June 2017
(c) Copyright Reydoog Limited 2014‐2017 20
Exercise ‐ Searching for an existing trade mark
UK IPO TMView
https://www.tmdn.org/tmview/welcomehttp://www.ipo.gov.uk/types/tm/t‐os/t‐find/tmtext.htm
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All trade marks and copyright belongs to their respective owners
Filing Options
• UK Only ‐ £170 for 1 class, £50 each additional class• Right start option (£200 – half up front and half on acceptance)
• EUIPO EUTM ‐• €850 for 1 class, €900 for 2 classes, €1,050 for 3 classes
• Madrid protocol – WIPO• Can select countries
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Tuesday, 13th June 2017
(c) Copyright Reydoog Limited 2014‐2017 21
Trade Mark Application Procedure
• Fill out form, send off and pay fee
• Office examines on absolute grounds
• Office searches for other marks
• Informs other mark owners and publishes
• Opposition period – informal negotiation
• If no opposition then trade mark is granted
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Unregistered marks and get up
Features used as a trade mark which are not protected by a registered trade mark
Who made this water
bottle?
Lookalikes
All trade marks and copyright belongs to their respective owners
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Legal Aspects of Running a Business. Brighton Summer School.
Tuesday, 13th June 2017
(c) Copyright Reydoog Limited 2014‐2017 22
Unregistered Trade Marks – Passing Off law
• Common law protection – no statutory protection
• Can use TM. No legal meaning
• Hard to prove – classic trinity1. The existence of a goodwill or
reputation attached to the goods or services;
2. A misrepresentation to the public;
3. Causes actual or likely damage by reason of the erroneous belief generated by the defendant's misrepresentation.
© Copyright Reydoog Ltd 2014‐2015. All rights reserved
All trade marks and copyright belongs to their respective owners
Exercise. Are ®’s common?
• Look around the room and list all things you think might be a trade mark• HINT: Look at your drink bottles / food; stationary, clothing, bags, room equipment (clocks / flipcharts / projectors)
• How many have ® next them?
• Do any have TM next to them?
5 MINUTES
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Tuesday, 13th June 2017
(c) Copyright Reydoog Limited 2014‐2017 23
Copyright
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Copyright
• We all create lots of this – no registration required
• Usually very poorly managed / documented by SMEs
• Long lasting, strong legal protection. Owner has control over work produced
• Do not underestimate
• As name suggests only protects copying
• Protects expression of idea but not idea itself – requires fixation
• No formal registration system in the UK
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What does copyright protect?Authorial (LDMA)• Literary
• Anything written, spoken, sung• Table, compilation, database• Software code
• Dramatic• Work of dance or mime
• Musical• Music excluding words meant to be sung, spoken or performed with music
• Artistic• Graphic work (painting, drawing, diagram, chart or plan), photograph, sculpture or collage. Work of architecture or artistic craftsmanship
Entrepreneurial
• Recordings• Recording of sounds• Recording of literary, dramatic or music• Films. Recording of a moving image –includes sound‐track
• Broadcasts• Electronic transmission of visual images or sounds
• Typographical arrangements• Layout of a literary, dramatic or artistic work
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Related• Performances
• Databases
Who is the author / owner of copyright ?
• Author is the person that creates it• Intellectual creation / Use of labour, skill & judgement
• For LDMA works a natural person (or natural people) is/are the author
• For a film producer and director are joint owners (tenants in common)
• The first owner is:• The employer is the author is an employee and work made in course of duties• The author otherwise e.g. if a contractor
• Can be multiple authors of a work
• IMPORTANT: If you use contractors you need to get the copyright assigned to you when you pay the bill!
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Duration of copyright
• Authorial (LDMA) works• 70 years after death of author
• Entrepreneurial works• Sound recordings – 50 years from being made or if published 50 years from publication
• Films – 70 years after death of last of director, producer, screenplay author, composer of music
• Broadcasts – 50 years after being broadcast• Typographical arrangements – 25 years after published
• Term directive
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Restricted Acts
Primary• Make a copy
• Including storing• Making 3D copies of artistic work • Photographing film or broadcast• Transient copies
• Issue copies to the public• Rent or lend work to public• Perform, show or play work to public
• Communicate work to public
• Adapt the work
Secondary
• Import
• Possesses of deals
• Provides means to copy
• Permitting use of premises for infringing performance
• Providing apparatus for infringing performance
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Except……..
• Transient of incidental copying (e.g. while web browsing)
• Research for non‐commercial purpose (with acknowledgement), Private study
• Criticism, review and reporting of current events
• Parody, Pastiche and caricature
• Time shifting
• Personal non‐commercial use
• Incidental Inclusion
• Single accessible copy (e.g. in braille)
• Single backup copy of computer program
Limited exceptions: No general fair dealing
Format Shifting (Ripping & Burning of CDs, backing up computers, saving to cloud) illegal (again)
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Moral Rights
• Right to be identified as author• Must be asserted• Exceptions
• Computer programs• Disk jockey exception• Employee
• Right to object to derogatory treatment
• False attribution• Right to privacy in photographs and films
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All trade marks and copyright belongs to their respective owners
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Tuesday, 13th June 2017
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Asserting and protecting your copyright
• Use “© Copyright. Company name. Year of creation. All rights reserved” on materials• Optional but ensures people know it is not an orphan work• Removes defences about not knowing who owned it
• Keep records that authenticate your date of creation. Keep your workings
• When using third parties make sure that they assign the rights to you
• You own employee copyright by default but worth having in contract and reminding them that they cannot use your copyright material outside work or when they leave your employment
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Creative Commons
All contents on this page is © Copyright Creative Commons
Icon Right Description
Attribution (BY)Licensees may copy, distribute, display and perform the work and make derivative works based on it only if they give the author or licensor the credits in the manner specified by these.
Share‐alike (SA)Licensees may distribute derivative works only under a licence identical to the licence that governs the original work. (See also copyleft.)
Non‐commercial (NC)Licensees may copy, distribute, display, and perform the work and make derivative works based on it only for noncommercial purposes.
No Derivative Works (ND)
Licensees may copy, distribute, display and perform only verbatim copies of the work, not derivative works based on it.
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Tuesday, 13th June 2017
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Open Source
This is a matter of freedom, not price, so think of “free speech,” not “free beer.” ‐https://www.gnu.org/philosophy/open‐source‐misses‐the‐point.html by Richard Stallman
http://fc09.deviantart.net/fs70/f/2010/259/5/e/don__t_touch_my_beer_by_angrydogdesigns‐d2yumcr.png
© Mr Angry Dog
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Is this infringement?
Art Rogers, Puppies, 1985. Offset lithograph on coated paper; 4 5/8 x 5 3/4 ins. © Art Rogers
Jeff Koons, String of Puppies, 1988. Polychrome on wood; 62 x 37 ins
All trade marks and copyright belongs to their respective owners
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Tuesday, 13th June 2017
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What about this one?
© 2006 Temple Islands Collections Ltd(used on London souvenirs)
New English Teas Ltd/Nicholas John Houghton(used on tea packaging)
All trade marks and copyright belongs to their respective owners
Infringement of sounds
Marvin Gaye Pharrell Williams / Robin Thicke
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Avoiding infringement
• Keep a register of everything you use and create including permissions / licence conditions
• Education! Inform your staff about copyright and tell them that they cannot just grab anything of the web for free
• Search for content licenced for re‐use
• Read licences (including open source ones) carefully as they vary widely
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All trade marks and copyright belongs to their respective owners
Patents
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(c) Copyright Reydoog Limited 2014‐2017 31
Patents
• Protect new ideas, inventions, ways to do things – technical improvements
• 20 year monopoly granted in exchange for disclosure
• Absolute protection – knowledge is not required for infringement
• Even if you are not filing a patent yourself you need to make sure that you are not infringing an existing patent
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Patent requirements
• An invention. i.e. none of these as such:• a discovery, scientific theory or mathematical method• a literary, dramatic, musical or artistic work• a scheme, rule or method for performing a mental act, playing a game or doing business, or
• a computer program
• Novel• Inventive / non‐obvious• Industrially applicable• Described in detail• Must not be immoral or against public policy
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Assessing if the idea is new
• Places to search• WIPO – Patentscopehttp://patentscope.wipo.int/search/en/search.jsf
• EPO – Espacenethttp://worldwide.espacenet.com/?locale=en_EP
• Google – http://www.google.com/patents US Only
• How to search• Keyword• Classification• Combination of both
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All trade marks and copyright belongs to their respective owners
Patent application
• Description• Outline problem being solved
• What is already out there and why it is unsatisfactory
• What the invention is and how it solves the problem
• Best mode of implementing
• Claims
• Drawings
• Abstract and title
• Assignee, inventor and other admin info
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Patent grant procedure
File application
Preliminary examination
of formalities
Search by office
Publication
•At 18 months
Examination and issue first office action
•Before 2 years
ResponseSecond
office actionResponse
Notification of grant
Grant
•Before 4 years
Renewal annually
•Up to 20 years
Procedure can be accelerated – green channel or good reason (e.g. suspect infringement). No extra cost at UKIPO
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Patent timings
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Patent costs
• UK• Initial Drafting £2k‐£5k• Filing / search / examination £230• Response to each office action £500‐£1000
• Renewal fees over 20 years £4,000Hargreaves said professional fees average £13,500 over life of patent in UK
• PCT• Official fees ~£2,000 ‐ £3,000• Legal fees £1,000 ‐ £2,000
• International• Each English speaking country ~ same as UK in terms of cost
• Each non‐UK country – translation costs in addition ‐ £200 per page
• EU – central examination process but then validation is each country
For good geographic coverage can expect to pay in excess of £100K over life of the patent ‐ Hargreaves
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Patent Infringement
• What is infringement?• If a product, making, using, selling, importing or keeping the patented product• If process, offers as a service or sells products that were made using process• Supplies of offers to supply invention so that third party infringes – requires knowledge of patent. Secondary infringement
• Defences• Private & non‐commercial• Experimental• Ships / aircraft• Prior use• Validity of patent
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Legal Aspects of Running a Business. Brighton Summer School.
Tuesday, 13th June 2017
(c) Copyright Reydoog Limited 2014‐2017 35
Exercise
• Do I have anything that may be patentable?• Am I doing anything that might be inventive and not obvious
• Does it have a technical and a physical effect – i.e. does it affect how something works
• Is it new ? • Have we disclosed this to anyone? Has the disclosures all been under confidence?
• This will require a detailed search for independent creation
5 MINUTES
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Designs
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Tuesday, 13th June 2017
(c) Copyright Reydoog Limited 2014‐2017 36
Registered Designs
• Protecting look and feel – eye appeal• EU and UK versions – only differing in geographic protection and price• Covers products, fonts materials, packaging, get‐up, surface decoration, avatars
• Protects both 3D and 2D objects (avatars, wall paper designs)• No need to show copying – absolute protection• Does not protect:
• Technical features. If shape is needed for its function• Features that are not visible during normal use• Anything offensive / immoral
• Easy, inexpensive registration. No examination. Up to 1 year after disclosing to public
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Registered Designs continued
• Requirements: Unique appearance of ‘whole product’. New and individual character
• Lasts for 25 years
• Prevents making, selling, using, importing, exporting or using in another process
• Defences – non‐commercial / experimental, exhaustion, spare parts
• Only difference between UK and EU rights:• Price• Geographic coverage
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Small changes and overall character
• ‘More cool’, ‘more rugged’, ‘more curved’, sleeker designs. Design freedom
• Would an informed, design conscious user be confused?
Dyson v VaxP&G v Reckitt Benckiser Apple v Samsung
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All trade marks, design and copyright belongs to their respective owners
Small changes and overall character
Trunki v Kiddee (Magmatic v PMS International
• Recent supreme court case
• Different overall impression: horns v antlers
• Lord Neuberger: “[t]here is no dispute that the Trunki was an innovative design” and it “has won numerous awards and has been a significant commercial success.” Furthermore, it appears clear that Mr Beverley of PMS conceived the idea of manufacturing a Kiddee Case as a result of seeing a Trunki, and discovering that a discount model was not available. Unfortunately for Magmatic, however, this appeal is not concerned with an idea or an invention, but with a design”
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(c) Copyright Reydoog Limited 2014‐2017 38
Community Unregistered Design Right
• Purpose• Allows market testing before deciding to file for registered design – 1 year
• Same as registered right except• Free and automatic. No registration (like copyright)
• Need to show direct copying (like copyright). No absolute novelty (just needs to be own creation) but no protection for ‘commonplace’ designs
• 3 years protection from date of disclosure
• Uses• Design and fashion industry
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UK Design Right
• Like Community Unregistered right• Need to show copying. Free & automatic.
• Differences• 15 years (with need to licence in last 5 years)• Must match provision – spare parts provision• Can be internal features• Only 3D objects (relatively limited right)
• Currently protects ‘any aspect’ of design. Changing• Exceptions
• Method or principle of construction – fishing nets• Must fit another product• Must match – for car spare parts. • Surface decoration – covered by copyright in UK
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Legal Aspects of Running a Business. Brighton Summer School.
Tuesday, 13th June 2017
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Non‐disclosure Agreements
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Use of an non‐disclosure / confidentiality agreements (NDA / CDA)• NDA / CDA are essentially the same thing
• Key aspects:• One party (disclosing party) agrees to tell confidential information to another party (receiving party)
• Receiving party can only use the information for a specified purpose (must be defined) and no other purpose
• Receiving party must keep confidential except for very specific exceptions• If already knew• If required to disclose by law enforcement / court• If permission giving to disclosing party
• Has time limits – after which disclosing party can use for what ever purpose or disclose
• Can be one‐way or reciprocal (two‐way)© Copyright Reydoog Ltd 2014. All rights reserved
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(c) Copyright Reydoog Limited 2014‐2017 40
Common NDA / CDA issues
• Defining what information is confidential and what is not• Not all info confidential• Often information has to be labelled as such. If given orally has to be written down and formally given to receiving party within a certain time limit
• Reluctance to sign• Often resistance to sign NDA / CDA• Receiving party may be worried they have already developed the same stuff and would not be able to exploit their own work after signing
• If receiving party is a funder or intermediary may be unable to sign as has to communicate to other parties to do job or to raise the funds
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Uses on NDA / CDA
• No disclosure for patent filing / prosecution purposes
• Information remains a trade secret
• Clear that the information is commercially sensitive
• Stops receiving party ‘running off with your idea’
• NDA / CDA does not:• Create a collaboration• Affect the ownership of any intellectual property
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Legal Aspects of Running a Business. Brighton Summer School.
Tuesday, 13th June 2017
(c) Copyright Reydoog Limited 2014‐2017 41
NDA / CDA Best Practice
• Define the purpose as specifically as possible. Define what information will be confident as precisely as possible.
• Be clear what information you have is confidential and what is in the public domain. • Public domain information can be provided before an NDA is signed or if party refuses to sign
• Confidential information can only be disclosed under an NDA
• “Need to Know” basis• Only review what is required and only to people / organisations that need to know
• Don’t reveal everything. Pieces of a puzzle are less useful than the whole picture
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Case study 1: Gearnomics
Picture © nb designs
Case Study courtesy of UK Intellectual Property Office
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Tuesday, 13th June 2017
(c) Copyright Reydoog Limited 2014‐2017 42
Gearnomics supplies a range of industries with gears of different sizes for various applicationsIt uses a particular high‐grade steel, especially suited to withstanding wear, and tooth profiles which provide very good gear engagement –both have been developed in‐houseTwo larger companies are now producing identical gear wheelsGearnomics has not patented anything; management felt the material was well known (though not previously used on gears) and changing the shape of gear teeth did not seem to be patentable
1) Were these assumptions correct?2) Is there anything the firm can do to enforce its IP against its
competitors?
Gearnomics
Case Study courtesy of UK Intellectual Property Office
Key points for Gearnomics
1) No. A known material applied to a product for the first time is patentable, provided its use is not obvious; if no‐one else has used it before, it is probably not obvious. If the shape of the gear teeth produces a new technical effect, this is patentable (and many gear teeth designs have been patented)
2) Yes. The gear teeth profile has automatic design right protection even though it is not registered. But even if this is still valid, it is UK only, and is only a right against copying. To enforce it, Gearnomics needs to show that copying has taken place
Case Study courtesy of UK Intellectual Property Office
Legal Aspects of Running a Business. Brighton Summer School.
Tuesday, 13th June 2017
(c) Copyright Reydoog Limited 2014‐2017 43
Case study 2: Screwjack®
Picture © nb designs
Case Study courtesy of UK Intellectual Property Office
Jim Stevens has created a new corkscrew design and had a prototype made by a local engineering company. He has original technical drawings which precisely match the finished itemJim has come up with the name “Screwjack” and has put an ® next to it to make it look better. He is yet to apply for a trade markJim has visited an advertising agency and commissioned them to produce promotional literature, and they have supplied mock‐ups
1) What IP rights has Jim got, and what do they protect?2) What registrable IP should Jim be considering?3) What should Jim do about the presentation of his product name?4) What’s important about Jim’s dealings with the engineering firm…5) … and the advertising agency?
Screwjack ®
Case Study courtesy of UK Intellectual Property Office
Legal Aspects of Running a Business. Brighton Summer School.
Tuesday, 13th June 2017
(c) Copyright Reydoog Limited 2014‐2017 44
Key points for Jim
1) Jim owns the copyright in the technical drawings and unregistered design rights covering the shape
2) Jim should be searching databases to check he is not infringing anyone else’s IP. He should also check domain names and company names too
3) Jim risks a fine if he continues to use the ® symbol. He should remove it and apply for registration. He can use ™ in the meantime
4) Jim should have had an NDA in place. If he does, he could still apply for a patent or design. But the firm may have rights in any tooling they created
5) The advertising agency owns the copyright by default. Jim needs to get this assigned to him
Case Study courtesy of UK Intellectual Property Office
Thanks for Listening
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Ian Goodyer
Email: [email protected]
Web: www.reydoog.com
Phone: 0787 6542722
Twitter: iggy240
LinkedIN: www.linked.com/in/iangoodyer