Managing Intellectual Property Rights and Contract Law

Intellectual property rights are by their natureallow different types of uses of the information
restrictive rights. Rights owners are granted thereleased - what those terms are rely upon what
power to prevent third parties using theirthe parties intend to achieve.
intellectual property without their consent. When itTrade Mark Rights
comes time for materials in which IP rights subsistThe law of registered trade marks and
to be exploited, it is the law of contract that isunregistered trade marks protect brands, business
called upon to do permit to use the materials,names, logos, slogans, packaging and shapes in
subject to the conditions of contract.many instances. In industry, service marks and
Contract Lawcollective are also able to be registered, creating a
A contract is simply a legally binding agreement.device to set a standard of service and
Parties to contract are at liberty to agree torecognition that becomes associated with a
what may take their fancy and the terms thatparticular standard of quality. Again, use of
may please them. The law imposes limitations oncontracts allow businesses to license use of trade
what may be contracted for when the courtsmarks to other businesses; it may be that a
find that an agreement is contrary to public policylicensor wishes to impose particular restrictions on
or otherwise restricted by statute. With thisthe size, colour, geographical location or even the
background, owners of intellectual property areplace on a website that a trade mark will be used.
free to agree to deal with intellectual property inProvided these requirements may be reduced to
any way that they see fit.writing with sufficient clarity they may form part
Contractual Dealings with Intellectual Propertyof the contractual relations and effectively restrict
Dealings with intellectual property take two basicuse of the trade mark. For example, franchises
forms. Firstly, intellectual property rights aredepend on trade marks to create a common
personal property, which means that they maybranding, as do businesses authorising others to
be assigned to another person, subject to verymanufacture packaging.
limited exceptions. An assignment of intellectualCommercial Environment
this property rights conveys the title to the rightsWhen it comes time to make commercial
to another person. Far more frequently howeverdecisions as to the types of uses and licences
these personal rights are licensed to otherthat will be granted in respect to intellectual
businesses for a limited purpose or a limitedproperty, companies would be well advised to
period, in accordance with the particular terms ofensure that that contract accurately reflects the
contract. Amongst many others, movies, music,commercial intentions of the business. Failures to
software, architectural plans, trade marks,do so may have dire commercial and indeed legal
designs, patents may be licensed to businesses orconsequences. Problems may arise by a variety
the public at large to use them subject toof different courses.
specified conditions and limitations. These licenses,For example, a company may inadvertently
which are in essence permissions, allow theaccept terms and conditions of the other business
licensee to perform some act in respect to theprinted on the back of a purchase order
intellectual property that would otherwise amountauthorising the payment. In such cases, the
to in infringement of the owner's intellectuallicensor's own terms of business may be found
property rights.not to apply. The consequences of this are that
In the commercial environment contracts allowthe business contracts on unforeseen terms of
such dealings to happen.contract that may well be contrary to its own
Copyright Lawintentions, and result in foreseen consequences. In
Copyright is the palladium of product of the arts,one case that the author has advised on, the
such as manuals, computer programs, commercialauthor of a University course inadvertently
documents, leaflets, articles, song lyrics, soundtransferred the intellectual property rights to a
recordings, photographs, film, sound recordingscompany rather than license its use. This placed it
and many others. Businesses that trade usingin a position whereby it had divested itself of the
copyright works such as these are entirely reliantassets in which had invested significant capital
granting licenses to their customers on specifiedexpenditure, that it intended to use and re-use for
terms to trade using their stock in trade.years to generate income. It had assigned the
Contract law allows these companies to restrictownership of the course to the other party
and limit use of these copyright works to a fineinadvertently.
degree. For instance a photograph might beA company may wish to license a company to
licensed for use in print media for a set price and"use" certain intellectual property rights on
electronic media for an entirely different price, orrestrictive terms. Difficulties may arise in the
indeed prohibit these uses in their entirety.contractual meaning of the word "use" when it is
Patent Rightsnot defined in the contract, and thus introduces
Of all the different types of intellectual propertyambiguity and uncertainty in the contractual
rights, it is patent rights that provide the mostarrangements between the parties. Where a
extensive and complete monopoly overlicensor asserts narrow and restrictive rights for
inventions. Products and processes which are"use" and the licensee asserts broad liberal rights
inventive may be patented. As the monopolyto "use" the work, unless there are other material
rights granted are so extensive, so the bar toin the contract indicating what the parties intended
surpass for registration is higher than any otherby "use", it is extremely difficult to ascertain what
form of IP protection. Use of patent rights maythe parties actually intended to agree to. In
be managed in the same way as other intellectualsituations such as these where intransigence sets
property rights.in, litigation is required to resolve the dispute
Confidential Information and Know-howcausing distraction and expenses that is otherwise
A common form of license is that granted byperfectly avoidable.
non-disclosure agreements. Non-disclosureConclusion
agreements are legally binding contracts designedFundamentally management of intellectual
to impose restrictions upon information releasedproperty rights takes place with contracts.
to another person, pursuant to the termsLicences and assignment of owners' rights may
recorded by the agreement. In the absence of abe coupled other objectives of the parties, for
non-disclosure agreement, the discloser ofinstance:
information would be left with their rights under
the general law to protect the information1. research grants and consequent dealings with
released from unauthorised disclosure or use. Thethe fruit of such research;
general law requires a claimant must show that2. funding arrangements and contractual
the circumstances of the case justify the courtcommitments for exploitation;
finding that the information (1) retained the3. clinical trials and use of consequent results of
requisite quality of confidence, (2) was imparted inthe trials;
circumstances importing an obligation of4. fixing royalties for exploitation of intellectual
confidence, and (3) that the information has beenproperty rights;
misused. Establishing such circumstances requires5. commercialisation of intellectual property and
meticulous preparation of evidence. Thus in therevenue sharing arrangements
vast majority of cases proving to the satisfaction6. granting of options over intellectual property
of a court that trade secrets or confidential7. grants for licences for evaluation of relevant
information have been misused is an onerousmaterials, and onward licenses
exercise.8. cross-licensing different intellectual property
Contract law simplifies this. If it were the caserights for mutual research or exploitation; and
that a contract has imposed obligations of9. software licensing.
confidence between the parties, the discloser isLike any other commercial contracts, dealings with
not simply left with his rights at general law. Theintellectual property may be complicated.
non-disclosure agreement imposes separate andFrequently this is the case because the delineation
independent rights to the general law, and indeedof rights and use rights granted are set out in
when properly drafted, may far exceed the rightsfine, granular detail. To truly appreciate the effect
that a claimant would otherwise be left with underof such dealings, readers need to appreciate the
the general law. As with other types of contracts,particular types of rights that may vest in a
non-disclosure agreements may be framed toparticular form of intellectual property.