Enforcing your intellectual property rights

Why enforcement of your intellectual property is important

How to protect your intellectual property

There are several forms of intellectual property that your company may own, for example trademarks, patents, designs, utility models or copyrighted works. Although confidentiality laws may protect some of these assets, it is crucial that your company remembers to take active measures and look after the intellectual property rights, and protect them in an appropriate manner early enough, after establishing the company. Trademarks act as a great example for this, as company does not generally have exclusivity to its trademark until it is registered (in some cases a company may acquire its trademark through years of extensive use). Protecting intellectual property is an investment in the company’s future that increases the value of the business in the long run.

Why protecting your intellectual property is important?

Firstly, exclusivity creates security from your competitors, which is important especially if your area of business has a lot of fierce competition. For example, not only does a registered trademark give you the exclusive right to use the trademark on the products and services you sell, but you can prevent others from using similar trademarks in a similar business area that you are operating in, as well as, depending on what your plans are, protect the trademark in fields that you plan to grow your company into. If you don’t register your trademark, someone else might, which will prevent you from using it. This might force you to change your company’s name and re-brand if another company already owns the name or brand. Furthermore, if another company uses your trademark or a similar trademark, and you have not protected it, this might dissolve the value of your brand and result in economic harm.  E.g. in China there are a lot of companies and people making business out of registering other companies’ trademarks. It is very costly to overcome these false registrations and there are several cases that prove this.

Secondly, according to investors, the one key element that they look for in startups, is that all of the important intellectual property rights are registered and protected accordingly. A sufficiently broad intellectual property portfolio essentially reduces the risk of subsequent infringements, and of course losses, from the investor’s perspective and makes the company a more attractive investment target. Therefore, strategically, it may make sense to invest quite a large proportion of early-stage resources into registrations and use those registrations as leverage in financial negotiations.

Thirdly, digitalization constitutes a huge opportunity for the use and economic exploitation of intellectual property rights. In the digital world, intellectual property is an essential resource due to the fact that it may not decrease in use and digital copies are extremely cheap and fast. The value of startups is usually based on their growth potential and scalability, and intellectual property rights are very firmly connected to these.

Creating an execution and enforcement IPR strategy

The IPR strategy is fundamentally influenced by the field and industry that the holder operates in. It usually consists of few different elements, such as what are the most important IPR’s to protect and where. It also consists of a protection strategy, so the holder of the registrations can act fast and with appropriate measures whenever there is an infringement or possibility of one (we will get into the enforcement measures below).

If the IPR holder’s product or service is scalable and therefore widely offered to consumers and companies, special attention should be paid to branding and comprehensive trademark protection in general. Some IPR experts can offer “trademark watch” -services where the holder is informed if there are any similar trademark applications or the holder can even be notified if the holder’s competitor applies for a trademark.   If your company is developing its products or services in cooperation with other operators, it is important to ensure that intellectual property rights, which are created during the development, are transferred to the intended party. This is most often done through different contracts. The same applies to employees of the company. This is of course a jurisdictional question and something that is in general advisable to keep in mind as intellectual property rights created during employment may not automatically transfer to the employer, which is why this IPR transfers should always be considered in employment contracts. This is the case for example in Finland.

Infringements of intellectual property rights and how to enforce your rights

Protecting your intellectual property rights by registering them, allows you to enforce your rights effectively against unauthorized use. If you don’t act on the infringement, your intellectual property may lose its value. Remember to protect your IPR also after registration!

Enforcement actions can be divided into initial enforcement measures, online, civil, criminal and customs enforcement. While criminal and customs enforcement involve public authorities, civil measures mean taking actions that remain a private issue (usually between two parties). In order to establish what is the right action applicable, you need to consider a) do you have any intellectual property in the jurisdiction where the alleged infringement happened, b) is this infringement applicable to your intellectual property right applicable and if so, c) what is the infringement (is it related to counterfeit goods in customs or online for example?).

One example of initial enforcement measure is the sending of a cease and desist letter which are also known as a warning letter. This is usually effective as a preliminary measure, demanding the infringers to stop the infringement. However, these letters may be ineffective and additional measures might be needed. Sending cease and desist letters may prove useful as evidence especially later in the possible infringement proceedings. If cease and desist letters do not cause the desired outcome, civil actions such as provisional measures, damage recovery measures and enforcement procedures are possible next steps.

Criminal sanctions and customs actions mainly concern counterfeiting and piracy. If the type of infringement is counterfeit goods provided online, so-called notice and take-down procedures as well as information requests from internet service providers and payment providers are good ways to enforce your intellectual rights. You can also activate the customs to observe any counterfeit goods based on your intellectual property rights even before infringements has taken place (importing counterfeit goods to the country).

It is extremely important for intellectual property holders to understand the value of their intellectual property assets and enforce their rights properly with a strategic mindset.

Text and additional information:
Maria Storey, Associate, +358 40 743 2222, [email protected]