Content reviewed October 2024
What is intellectual property?
Intellectual property (IP) is defined as any type of design, invention, logo, symbol, image, or name that is used in commerce. The Intellectual Property Office is responsible for intellectual property rights.
This could be your company logo, a mascot character, a unique technique in your manufacturing process, or the packaging, style, and texture of your product. It doesn’t matter whether you’ve invented a new product or designed a new website – if it has value, someone is likely to want to copy it.
It can be unrealistic and expensive to always formally register everything about a business, but under the law, you are given some automatic protections upon creating new pieces of work. There are also other protections that small business owners have to apply for, like trademarks and patents.
Here’s what you need to know about intellectual property rights for small businesses.
Automatic protection
This is where the creator of the intellectual property does not need to apply for or register anything to have protection, it arises automatically. This means that no one can use a piece of work without the owner’s permission, and if they do so, you can take legal action against them There are various types of automatic protections.
Copyright
All pieces of writing and literary works, art, photography, films, TV, music, web content, and sound recordings are instantly protected under UK law. The material does not have to have novelty or aesthetic value to get copyright protection, but it does have to be the result of independent intellectual skill and effort. Copyright protects the form of expression of an idea, not the idea itself. For example, if you have an idea for the plot of a movie, that idea, whilst still in your head or even if communicated orally to others, will not be a copyright work. However, as soon as you commit that movie plot to paper it becomes a work capable of copyright.
This includes all work that is created by employees for the business. When it comes to logo designs and websites created by a third-party contractor, small business owners are advised to pay for a full transfer of rights as part of the deal, to ensure they have full ownership of their IP.
Unregistered design right
The shapes and configurations of certain objects are automatically protected under UK law for 15 years after it was first created, or 10 years after it was first sold, depending on which date is earlier. To qualify for this protection there must be an original shape or configuration of an article. Two-dimensional shapes such as textiles, graphics, or wallpaper are, therefore, excluded (but you may be able to register these as a registered design). The design must not common place (designs that are well-known, mundane, or routine are excluded).
Passing Off
Passing off is the area of law that protects the reputation and goodwill of a business and prevents people from selling goods under the pretence that they are the goods of another. It serves to protect the trader against the unfair competition of his rivals and also protects consumers who would otherwise be confused as to the origins of goods and services that they are offered. Whilst it protects consumers and traders alike it is only possible for the trader to bring an action and this can only be brought against a defendant who is also engaged in trading. You do not have to have to register your business name to potentially be able to take action against those who subsequently trade under the same or a sufficiently similar name.
Protections you need to apply for
There are three types of IP protections that require the owner to register their work. Unless the product is an invention potentially worth a huge amount of money, it is usually enough for small business owners to just register for trademarks and registered designs.
Trademarks
It’s a good idea to register company names, brand names, product names, logos, and jingles, and it takes four months for an application to be registered.
Digital trademarks
Secure the domain name and social media handles for your company or brand’s website, as opportunists monitoring the IPO may try to sit on URLs and social media accounts, and then demand money to release it to you.
Registered designs
Registered designs cover the appearance of a product, including shape, packaging, patterns, colours, and decoration. Until a design is registered, there is nothing to stop another small business from making and selling a similar-looking product. It takes one month for an application to be processed. Your design must be new, Not offensive, not make use of protected emblems or flags, and not be an invention or how a product works (you’ll need a patent for that).
Patents
Patents are primarily designed to protect inventions and products, for example, machines and machine parts, tools, or medicines. Patent protection is available for products and processes that satisfy four basic statutory requirements. A patent may only be granted if the invention is:
- New
- Involves an inventive step
- Is capable of industrial application
- Is not an excluded item
It takes about five years for a decision to be made by the IPO, which has to investigate the evidence submitted and ensure that the patent does not already exist. During this time, it’s common to hear references to a product as ‘patent pending’.
The UK Government strongly advises that business owners keep all IP in this category a secret until the registration comes through. If you need to discuss your idea, make sure to use a non-disclosure agreement (NDA) with anybody you consult with. Not only does this ensure that your property is protected, but it can also help you if you are accused of copyright infringement by a third party.
Need help working out what type of IP your business has? The Government’s Intellectual Property Office has a range of online training tools to help you understand what can be protected.
What is IP infringement?
Failing to protect your IP can prove costly for a small business. IP infringement is when someone is using your IP without permission, such as selling your patented products or using a trademark that you’ve registered.
You’re responsible for defending your intellectual property and taking action if someone is using it without permission. There are steps you can take to get the other party to stop using your IP, or you may wish to come to an agreement like a licensing deal. Mediation can also be used to try to resolve the dispute before resorting to legal action.
Don’t forget, it’s always best to seek legal advice before contacting the party in question or taking any action. In some cases, you can also report IP crimes to Trading Standards.
Protect your business and your bottom line
The costs involved in taking legal action when it comes to protecting your intellectual property can quickly snowball into the thousands. At the Federation of Small Businesses, you have access to a range of legal expenses insurance included with membership, including intellectual property cover. Our expert team will undertake an assessment to advise you on whether taking legal action is the best decision for your business.