WHAT IS INTELLECTUAL PROPERTY (IP) AND WHO REALLY OWNS IT?
In the early days of a start-up, entrepreneurs manage many challenges, from finding funding, managing cash and hiring talent, to generating vital sales. Defining, documenting, and protecting IP can be at the bottom of a very long to-do list.
Intellectual property (IP) refers to the creations of the mind, such as inventions (patents); literary and artistic works (copyright); new product designs (industrial designs); and brand-names, symbols, or logos used to distinguish products and services of one undertaking from those of another (trademarks).
IP is protected in law by patents, copyrights, trademarks and designs. Businesses may also opt for protection of their own confidential information from misappropriation by keeping it a trade secret.
WHAT IS A TRADE SECRET IN IRISH LAW?
In Irish law, a trade secret is confidential business information which is not trivial and not otherwise in the public domain and is often used to give a business’ product or service a competitive advantage. The information must not be generally known and the owner is entitled to take steps to protect it both pre-emptively and after misappropriation.
WHAT ARE EXAMPLES OF TRADE SECRETS?
Trade secrets can take a variety of forms and may involve a process, formula, recipe, method, pattern, design or practice which offers an advantage over competitors or otherwise benefits customers.
WHAT ARE THE MOST FAMOUS TRADE SECRETS?
Some of the best-known examples of trade secrets include the original Coca-Cola recipe, KFC’s original blend of 11 herbs and spices for its chicken coating, Google’s search algorithm and McDonald’s Big Mac special sauce.
WHAT ARE THE TRADE SECRETS REGULATIONS?
In Ireland, there are two essential legal bases for the protection of trade secrets – one legislative, through the trade secret regulations (European Union (Protection of Trade Secrets) Regulations 2018. It provides for civil enforcement rights and criminal sanctions for non-compliance. The other is common law derived through the recognition of a duty of confidence in certain circumstances.
Unlike traditional intellectual property rights, trade secrets are shielded indefinitely as long as they remain confidential.
But first things first, before you protect your IP from use by third parties, you must ensure you protect it internally, in this case, your employees, some of whom might be the creative force behind the technical or technology development that your burgeoning empire is built on. Why does the business own the IP if you are not the creative force?
In Ireland, the default rule is that IP created by employees during their employment belongs to the employer unless there is a specific agreement stating otherwise.
To further protect your intellectual property from potential claims by employees, employers should take the following steps:
Employment Contracts
Use clear and comprehensive employment contracts. Employers should have well-drafted employment contracts that clearly outline the scope of the employee’s duties and responsibilities, including any specific tasks related to IP creation.
The contracts should include provisions that explicitly state that any IP employees create during their employment belongs to the employer. Ensuring that all parties properly execute the employment contracts is also essential.
IP Assignment Agreement
Employers can require employees to sign and date an IP Assignment Agreement which applies at all times, both during the employee’s employment and after the termination of employment.
The agreement should set out what the employer and employee agreed regarding proprietary and IP rights, including the full and irrevocable assignment of IP rights to the employer. The agreement should include a requirement for the employee to execute documents which may be required to protect IP rights.
Non–Disclosure Agreement
Employers should think about having key employees sign a non-disclosure agreement to safeguard their intellectual property and proprietary knowledge when sharing confidential information with them. This agreement should outline the specifics of what the employer and employee have agreed upon, including obligations to keep the information confidential, the purpose of the disclosure, returning confidential information to the employer when the employment ends, and the employee’s ongoing responsibility to keep the information confidential even after the employment relationship ends.
WHEN THINGS GO WRONG
Preserving and gathering evidence is essential. The role of forensic investigators in cases involving the theft of intellectual property is paramount, given the intricate nature of such incidents. Intellectual property theft encompasses a wide range of unauthorised activities, from trade secret misappropriation to copyright infringement, patent theft, and more. In such cases, forensic investigators play a vital role in unravelling complex layers of evidence and providing a comprehensive understanding of the events that transpired.
Depending on the circumstances, there are various actions you may need to take if your IP is stolen.
These range from engaging a legal expert to issue a cease and desist letter, entering dispute resolution negotiations or instigating formal IP enforcement action.
Finally, keep in mind that prevention is better than cure so, if you are the founder of a business, don’t wait for problems to arise. Now is the time to invest some time and energy in finding experienced professional advisors who can support your goals and help protect the IP underpinning your future success. Protecting IP at the creation stage is essential to avoiding massive loss of value and all your hard work, late nights, and early mornings going to waste.
This article was first published in our 2023 Food & Agribusiness Report.