Briefing Note - Managing IP - Maximising IPRs using an audit checklist

Whether in the form of digital media, software or technology reliant product or service, an awareness and proper management of intellectual property adds value to business ventures and usually reveals assets that may be earmarked for alternative revenue streams for businesses.

A key process in managing the intellectual property stemming from research and development projects is conducting the audit. The purpose of conducting the audit is not simply a stocktaking exercise. The process is undertaken with a view to further exploiting the intellectual property assets in hand, and generating alternative revenue streams to enhance the return on the initial investment. A sensible process will also implement procedures to minimise the risk of litigation by infringing others' copyright material and other intellectual property. A process to manage the rights that may be created in research and development is set out as follows.

Identification of IP

• Bring the technology inventory up to date: Identify implemented technology and record on a central register.

Create the Register

• Devise the format and media upon which the register will be held, whether paper based, database and available on an intranet.
• Monitor new work.
• Keep proper records of the new work and archive or store it using a traceable inventory system.

Maintaining the Register

• To maintain currency of the register:
  • Obtain statements from those involved in the creative process to state why or how material developed on the project is original.
  • Record the sources and products relied on to create the original work.
  • Where third parties' work has been utilised record the documents authorising the use and limitations on the use right granted. Document the copyright clearances.
  • Ensure that the persons involved in the development are not subject to a legal impediment, such as an obligation of confidentiality or restraint of trade under a previous employment contract.
  • Safeguard the secrecy of the new work; shore up employment and independent contractors’ contracts.
  • Monitor new work.
  • Keep proper records of the new work and archive or store it using a traceable inventory system

Properly Manage the Rights vesting in the Assets

• Prohibit if possible the ability to use inventions prior to application for patent protection, in circumstances other than absolute secrecy.
• Record use of the product throughout the organisation and third parties through a licensing register.

Internal Management

• Ensure renewal fees for registration patent or design rights are paid on time.
• Implement reporting procedures to track use of the work both in-house and by contractors and subcontractors where applicable.
• Implement reporting procedures for the passing of confidential information (and marked as such) and filing for the non-disclosure agreements.
• Implement procedures informing employees that the business respects the rights of other intellectual property rights holders, and post it on the corporate intranet:
  • Post notices not to copy third party code from any source unless it is known to be in the public domain. A record should be kept of its source if practical a copy of using a web archiver where possible, such as Webzip(.com).
  • Ensure the statutory and licensing criterion for reverse engineering are met.
  • Document each step.

Manage Third Parties

• Integrate intellectual property protection:
  • Apply trade marks.
  • Consider the unregistered design right.
  • Apply the UCC copyright symbol the the year of copyright.
  • Maintain confidentiality where at all possible.
• Apply digital rights management technologies prior to external distribution.
• Apply tracking technologies to documentary confidential information and restrict its use. Specific measures for software include:
  • Seed databases with redundant entries.
  • Add redundant code to source code;
  • Configure the compiler to create object code with settings that minimize the ability to decompile.
• Keep records of alleged infringements and how they were encountered.

Legal Considerations

• Add contractual terms of use, and warn of digital rights management systems, and avoid logic bombs.
• Put infringing parties on notice as soon as possible to, amongst other things, counter the assertion that consent to use has been granted.

Flexible Application

Intellectual property is applies flexibly across most assets of any intrinsic value that have been the product of capital expenditure. and the different intellectual property regimes apply concurrently and independently of one another. When considering a software product for instance it is quite likely that the product will be protected by:

• the Database right.
• Traditional copyright law: source code and design documents as literary works; database tables as a [copyright] tables and compilations; animations as artistic works and cinematograph films.
• Icons may be registrable designs, and perhaps protected by the unregistered design right.
• Patent where the software is used in an industrial process.
• Source code as trade secrets.
• Data used by the program may constitute confidential information.
• Brands, logos and other devices embedded into the source code facilitate trade mark protection under statute and at common law using the tort of passing off.

Conclusion

A crucial part of conducting an audit is the ability to see through the form of the invention and recognise the different aspects of the research and development and the breeds of intellectual property that may be used to protect it.

These steps are designed to ensure that a company minimise their risks in infringing third parties rights in developing a technology product and narrow down the avenues through which intellectual property is acquired by a third party and the terms of use to which it may be put.