IP.pngIntellectual Property (IP) is a term that describes the application of the mind to develop something new or original. IP can exist in various forms; a new invention, brand, design or artistic creation. There are various types of IP available. IP is an important asset in today's knowledge economy and should be strategically managed. Some IP rights require a formal process of application, examination and registration. CIPC administer the following IP domains in South Africa: trade marks, patents, designs, copyright (films only).

Registered intellectual property (IP) rights serve as an incentive to reward innovation by providing IP creators and owners with the time and opportunity to exploit their creation. However, IP rights exist in many forms and in some cases they don't need to be registered in order to be of value (literal works, music, etc.). Each type of IP provides different competitive advantages for its owners and new commercialisation opportunities for organisations. IP has many of the same ownership rights as physical property.

It is important that you effectively manage your IP to ensure you get the best protection and the most out of your idea/invention. The creator of IP is not necessarily the owner - it is important that ownership is addressed through appropriate contractual arrangements.

Types of IP Protection
What is protected? Type of IP protection What it means Example
Logos, words letters, numbers, colours, a phrase, sound, scent, shape, picture, aspect of packaging or branding - or any combination of these.

Trade Mark

  • A trade mark identifies the particular goods or services of a trader as distinct from those of other traders.
  • The owner has the exclusive right to use, sell or license the trade mark.

 

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Inventions: Devices, products, processes, substances or combination of known elements in any field of industry and agriculture, which are new, have inventive step and industrial applicability. Patent
  • A patent protects how an invention works or functions.
  • The owner has the exclusive right to use, sell or license the invention. Patents also allow the owner to stop others from manufacturing, using, copying and/or selling the device or process.
 
Industrial designs Aesthetic designs & Functional designs
  • The visual appearance of a product is protected, but not the way it works.
  • Appearance that has a feature necessitated by its function
  • The owner has the exclusive right to use, sell or license the registered design.
Ipod
kitchen appliances footwear
fashion items
Paintings, art, literature, music, film, broadcasts, computer programs Copyright
  • Automatically protected.
  • Law protects only Cinematographic films.
  • The owner has the exclusive right to use, sell or license the copyright work
Typefaces and fonts
IP Rights

Protecting and managing your IP is important when establishing your product or service in the market and is often the difference between success or failure. The existence of IP rights restricts competitive market forces for a set period.

IP rights:

  • encourage owners to engage in innovative activities that benefit society
  • reward the innovator's effort and skills
  • promote wider access to innovations and advance further research and development by others
  • provide a set period of protection
  • provide competitive advantage
  • provide a number of competitive advantages for their owners. For example: give the owner the right to determine who can use the IP and how it can be used.
  • can provide an extremely valuable bargaining tool and in most cases can be sold for financial gain.
  • may help their owner compete on the basis of the reputation associated with a product rather than on price alone.
  • provide the owners with a number of options in the event that the owner cannot afford to manufacture the IP, or position themselves competitively in all potential markets. The most common way of commercialising IP is through licences.

The fact that IP rights are not physical means that they can be used many times without being diminished. That means, for example, that the same IP can be licensed to a number of different licensees.

IP reduces the chances of your products and/or services being replicated and passed off as those of a rival trader, and can open up new opportunities. The key attributes of IP rights are that they may be restricted and are exclusive. IP rights also entail the qualities of ownership, transferability, territoriality and volatility.

Exclusive rights

Registered IP rights provide you with exclusive rights. However, they are restricted in both their duration and scope.


Each IP right has its own restriction in terms of duration. For instance, patents last for 20 years, designs for 10/15 years subject to payment of renewal fees, and copyright for 50 years after the death of the 'author' (no renewal fees).

Note: annual renewal fees must be paid to ensure patents and designs remain in place for these periods.  Trade marks can remain in force indefinitely, provided the renewal fees are paid every 10 years.

IP laws protect the innovator while still allowing newcomers to enter and compete in a mature market. For example, patents protect only a specific invention, designs protect only the particular visual appearance of a product, copyright protects only the form of an idea's expression (not the idea itself), and know-how is protected only when it can be shown that there is an obligation of secrecy between relevant parties.

Different Countries

Most IP rights are territorial, meaning they have to be dealt with in each new territory where you intend to trade. For example, a patent, trade mark or design granted in South Africa is only valid in South Africa.

Copyright is the only IP right that is automatically recognised in the global market. All other forms of IP need to be specifically assessed and approved in each country or region in which you intend to do business.

Ownership

Ownership is based on being able to show that you are the 'inventor', 'author' or 'creator' of the IP. You may also become the owner by having the IP rights assigned to you.

An IP ownership does not have the same 'indefensibility' quality as does the title to land or other assets. IP is always open to a challenge in court from another person who believes that they can show that certain criteria were not met in the original application process. The best defence against this is proper planning and management.

Transferability

Like any other business asset, IP rights are negotiable and can be used for commercial advantage. As a business tool, IP can be closely linked to market position and this provides the capacity to negotiate the advantage to your benefit.

IP rights can generally be bought, sold, licensed, given away or made freely and widely accessible. How you sell or license your IP is limited only by your business and negotiation skills. Beware however, that there may be tax implications such as stamp duty, capital gains tax and GST.