Intellectual Property: Protecting Your Trade Marks & Confidential Information
In a series of articles Charles Hylton-Potts, a lawyer based in London, covers a range of legal topics relevant to establishing a business in the EU. Click here to check out his previous article.
In one form or another, intellectual property will likely be a cornerstone of your business. IP comes in many different forms: it could be a trade mark you use as your business name or for your branding; copyright subsisting in any works you create, such as original software source code; the design of your product; an inventive process; or confidential information, such as your customer database.
Whatever IP your business owns, it will be a valuable asset, which needs to be protected at all costs. When your business launches in the EU, your budget should cover any legal expenses to ensure any IP is owned by the right entity and put in place the necessary protection. The following are some recommended measures to protect your trade marks and confidential information in the UK.
On arrival in London, it is possible that a local business might already be using your branding. Searches should be carried out in advance at Companies House and the Intellectual Property Office to see if your company name, brand name and logo are free. This will help avoid your infringement of another’s registered trade mark. Search engines and trade directories may assist in establishing whether another business has an unregistered trade mark which clashes with yours, but 100% certainty is not possible here. These searches might also save you the costs of a later rebrand.
If your searches come back clear, registration of your trade mark is highly recommended.
Without it, whilst the law of passing off allows a trade mark owner to take action against the use of its mark by a competitor, claims can be expensive and time-consuming. To succeed in a passing off claim, you would need to establish goodwill or reputation in your mark, which would take time to build, and prove misrepresentation and damage by the other business in using your mark.
On the other hand, registration gives the exclusive right to use the mark in respect of the goods and/or services for which it is registered and thereby prevents use of that mark by another business in respect of those goods and/or services. It would also act as a deterrent to infringement, allow you to use the ® symbol (as opposed to the ™ symbol for an unregistered mark) and be a valuable, exploitable asset.
Trade mark registration could be done either at the national level in the UK, or you could apply for a Community Trade Mark to protect your mark in all 28 countries of the EU.
This could be done in advance of your launch, provided you started using the trade mark within five years to prevent your registration being attacked for non-use at a later date.
Be aware that the application to register your trade mark could be challenged by someone with an “earlier right” in the mark, such as a prior registration, under the law of passing off, or by asserting a design right or copyright.
The application process for a UK trade mark takes around four months, provided there are no oppositions, and the online application fee is currently £170 for protection in one class of goods or services. Each additional class requires a £50 fee. For a Community Trade Mark, the process takes around six months and the online fee is €900 for protection in up to three classes of goods and/or services. Each additional class costs €150. The different classes can be viewed here.
The best way to protect confidential information is, of course, to keep it confidential. Once information has been made public, there may be little you can do, economically or at all, to remedy the situation.
Trade secrets should be kept under (actual and digital) lock and key and disclosed only on a need-to-know basis.
Contracts may (and should) be used to impose obligations of confidence on parties receiving confidential information. Whilst an employee is under an implied duty to respect the confidentiality of an employer's information during employment, this should be bolstered with express provisions in the employment contract. If confidential information is to be disclosed to prospective joint venture partners, suppliers or contractors, a non-disclosure agreement should be entered into before the information is disclosed, to define what it is and detail the necessary obligations. If non-binding Heads of Terms are to be used, any confidentiality obligations should be stated to be contractually binding.
The key point under English law however, is that defining information in a contract as “confidential” will not necessarily make it so. To be protectable, information must have the necessary quality of confidence.
Examples of such information could be a secret formula, or a customer list compiled with thought and effort from data in the public domain. The information must also be disclosed in circumstances of confidence, such as in the course of employment.
For employees, the category of information will govern the extent and duration for which it is protectable. As mentioned above, during employment, an employee has an implicit duty of confidentiality. After employment ends, however:
- Trade secrets are automatically protectable;
- “Mere” confidential information is not. Contractual post-termination restrictions may be used to maintain confidentiality for a reasonable period, and these could be enforced by a court if the employer has a proprietary interest in the information, although there is no guarantee;
- The departing employee is free to use information which amounts to his or her skill or knowledge;
- Public information cannot be protected at all.
To strengthen the employer’s position where there is uncertainty as to the confidentiality of certain information, it may also use contractual restrictions to protect other legitimate interests, such as its customer connections and the stability of its workforce. The most common are covenants preventing the solicitation of the employer’s customers and poaching of other employees (but covenants preventing dealing with customers and competing with the business are used too). These must be precisely drafted to ensure they do not go further than is reasonable, otherwise they could be held unenforceable.
In summary, secrecy is paramount to protect your confidential information, and steps must be taken to maintain this.
Disclaimer: This article is intended to provide a general guide to the subject matter. Specialist, local advice should be sought about your specific circumstances and no liability is accepted by the author or Redfern Legal on the basis of this article.
This article was written by Charles Hylton-Potts, a lawyer at Redfern Legal based in London specialising in corporate, commercial and real estate matters, particularly for businesses setting up in or moving into the United Kingdom. In addition to those services, Redfern Legal provides a full range of business legal services to support inward investment into the UK, including business immigration and employment law advice.
Sign Up to our Newsletter
So you enjoy The NextWomen. Why not sign up to our monthly newsletter?
You get a Letter from the CEO :-), the chance to catch up with the best of our recent articles - and some extra things we throw in once in a while.