Intellectual Property: Leverage & Licensing

An Expert's View about Intellectual Property Law in Australia

Posted on: 23 Jul 2010

INTELLECTUAL PROPERTY: LEVERAGE & LICENSING

Steve White, Principal - White SW Computer Law

Software Development businesses usually have few tangible assets. With the public’s varying ideas on ownership of intangible assets, there is a need to protect your intellectual property actively, to maintain and increase the value of your asset.

COPYRIGHT

  • Assignment of copyright must be in writing to be valid
    • The copyright in software developed as a contractor will be owned by the contractor unless assigned in writing.
  • Retain the copyright wherever possible to increase the value of your business and possible future royalty streams.
  • When licensing the use of your intellectual property, you should consider your own long term possible uses.
    • Exclude library code from any assignment
    • Limit the number of users authorised per licensing fee
    • Limit the transferability of the licence
    • Record and enforce your licensing restrictions and develop a name for enforcing your rights (Litigation to recover damages may not always be costs effective)

SOFTWARE LICENSING AGREEMENTS

  • Should be in writing and signed by all parties
  • Ideally should be non-exclusive and non-transferable
  • Intellectual property Indemnities
    • You should consider the possibility of concurrent development of a very similar product or the pre-existence of a product unknown to you.
    • You should document your development process, for example by putting into escrow copies of your various development versions of the software
    • Do not agree to an international indemnity as he risk is usually too great unless extensive (expensive) searches are undertaken

TRADE MARKS

  • Registered trade marks should be obtained wherever possible for business and company names and product logos and names.
    • Without registration, another party may register a name which you use and force you to discontinue your use.
    • Registration increases the protection and legal remedies available to you.
    • In Australia, registration may be continued indefinitely, subject to renewal fees being paid each ten (10) years to IP Australia.

PATENTS

  • Software patents are difficult to obtain, as a patent will only be registered if your innovation is commercially useful and novel.
    • Patents give the owner the exclusive right to manufacture, license, sell, import and use the invention.
    • Searches must be conducted for “prior art”, which can be expensive.

CIRCUIT LAYOUTS

  • Eligible Layouts

ASSESSING THE VALUE OF INTELLECTUAL PROPERTY

  • Examine the licence:
    • Is it non-exclusive?
    • Is it limited in geographical area?
    • Is it transferable?
    • Is an Intellectual Property indemnity provided?
    • What is the duration of the licence when compared with the time required to establish a market for the product?
  • Employees and Contractors
    • Obtain an intellectual property assignment
    • Sign a confidential information deed
  • Escrow
    • Increases the value of the intellectual property, as the source code is available for continued use and development if the licensor goes into liquidation or dissolves its business.

ROYALTIES

  • Calculation
  • Audit
  • Performance

CONCLUSION

  • The more control you maintain over your intellectual property, the higher the potential value of your asset.
  • The increased security of continued use by licensees, the higher the potential value of your asset.
  • Consider that the more comprehensive your documentation to support your ownership and rights the more valuable your intellectual property.

STEVE WHITE

WHITE SW COMPUTER LAW

JUNE 1998

www.computerlaw.com.au

© White SW Computer Law 1998

This article is a guide only and should not be used as a substitute for proper legal advice, readers should make their own enquiries and seek appropriate legal advice.


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Posted: 23 July 2010
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