What are intellectual property rights?

Intellectual property law comprise patents, utility models (the so called “small patent”), registered designs, semiconductor topography rights, plant varieties and trademarks. The individual intellectual property rights are variously regulated in respective special protection laws depending on how they come into being, as well as on the scope of protection, duration and consequences thereof.

What strategies must be considered when applying for and defending a portfolio of IP rights?

As yet the majority of IP rights is registered with a very limited idea of how to use it in the future. In many cases there is no comprehensive strategy. Especially individuals as well as small and middle-sized enterprises fear that such strategic considerations will restrict them to certain resources. In reality, however, a strategy planned well in advance guarantees for the success of IP rights management, importantly allowing a cost-benefit analysis.

If, for example, a middle-sized company asks itself whether to patent its first technical invention, which it is keeping secret at the moment, it must remember that patents are published and are thus open to a broad public. Equally, costs for application and maintaining the patent must be considered. An alternative possibility might be keeping the invention secret and exploiting the know-how resulting from it.

It can be a good idea to apply for and register a trademark for an end product that is based on this know-how, so that this product stands out from competitive products terminologically. Which of these alternatives will be less costly cannot be generally predicted, since a patent has numerous advantages over know-how protection, as it allows to monopolise the invention for the protection period of 20 years.

How to optimise the management of IP rights?

Almost every enterprise is an owner of at least one IP right (company name, business terms) and usually a number of further potential IP rights (e.g. company logo, advertising materials, trade and manufacturing secrets, other cultural and technical methods of resolution, etc.).

The management of IP rights involves among others gathering all existing or potential rights, clarifying ownership issues (company/company owner/employers/freelancers/clients/contractors, etc.), stating the (possible) duration of protection, the territorial extension of protection (typically Germany, German-speaking countries, Europe, etc.), possibilities of exploitation (self-production/ self-distribution/ granting of licence – not exclusive/ exclusive).

The first step involves gathering all existing rights and their revision under preceding premises. Then, in connection with the existing IP rights, the question should be answered, if the existing rights have been sufficiently secured by means of supporting measures.

A further management issue concerns the administration of IP rights. It is convenient for a patent holder to engage professional administrative firms, patent attorneys and attorneys-at-law so that the maintenance and monitoring of protective rights do not fail because of missed deadlines or delayed payment of renewal fees. On the other hand, there are protective rights which require almost no administrative efforts at all – professional administration would not pay in this case. Instead, it is better to make your own administration professional by e.g. training appropriate employees.

Costs constitute a central aspect of the question which IP rights are really required by a company or an individual. In addition, the bigger the company, the more rights typically exist, some of them, however, will never be exploited. It is usually of no use for a middle-sized company or an individual person to maintain a vast number of fallowing IP rights. In exceptional cases, it can be useful to register a certain protective right and not to exploit it, namely in order to pre-empt a competitor. IP rights that are not subject to official registration, such as copyright, law of industrial property and copyright and know-how lead to minor costs in the beginning and in the long run. In contrast to this, IP rights that require official registration, cause costs resulting from research, as well as from application fees, examination fees and lawyer’s fees. Furthermore, if any costs may arise from a communicating lawyer, e.g. for a trademark registration abroad, it is important to consider all these expenses in advance when considering a registration – follow-up costs, further legal fees, annual fees, renewal fees, travel expenses and other.

A simple registration of a patent put you to the expense of approx. € 2000 (legal fees and patent office fees), middle cases typically amount to € 3000 and a complicated patent registration can easily reach expenses amounting to € 5000. This applies to a German patent. In case of an international or a European patent the expenses are significantly higher.

Contrary to the above, a so-called “petty patent” can be registered in Germany at the expense of approx. € 600 (but: a utility patent is a so-called “unexamined” protective right, the Patent Office does not check its novelty, etc.).

How are IP rights obtained?

IP rights usually come into being by means of registration at the Patent and Trademark Office. Copyrights, performing rights or know-how are not eligible for registration; they come into being automatically when a work is created and the legal requirements are met.

Who is the owner of protective rights?

IP rights usually belong to the inventor. However, there are exceptions. Under the Act on Employees’ Inventions and the Copyright Act, an employer can own the exploitation right.

Are there limits regarding territory and time?

IP rights mostly provide for the so-called principle of territoriality. This means that IP rights (arising from registration) are valid only in the country in which they were registered. Thus, a trademark registered in Germany is valid only in Germany.

The duration of protection is regulated diversely. A patent enjoys a maximum protection of 20 years; owners of patents in respect of pharmaceuticals can obtain further five years of protection by means of a supplementary protection certificate. Contrary to this, trademark protection can be extended every 10 years, which means that unlimited protection is possible.

What effect and what consequences do intellectual property rights have?

Each IP right gives its owner exclusive possession, ownership, utilization and exploitation rights. IP rights are monopolist rights and serve the purpose of protecting the product.

In case of infringement of IP rights, the owner usually has the forbearance right, the right to be informed and he is entitled to a compensation for damages. The holder of the right can learn about infringements by means of monitoring measures. The holder of the right is practically forced by law to sue persons who infringe his rights, since the existing claims can otherwise be forfeited. For example, if somebody does not take action against trademark infringement within a period of five years, he loses the right to take prohibitory action against the infringer, if the latter points out expiry of this right.

Transfer of IP rights?

IP rights can be licensed to third parties generally or exclusively, but in principle they are also suitable for a transfer of rights (sale and assignment). As “rights”, the IP rights provide the possibility of licensing: The owner entitles a third party to use or exploit the right without ceding ownership. Licensing can be exclusive or non-exclusive. An exclusive license entitles only the licensee to exploit the IP right, usually within a certain territory (e.g. a state). Non-exclusive, so-called “general” licensing enables various licensees to use an IP right both in the same territory and at the same time. The ownership of the protective rights is not transferred to the licensee, but will remain with the original owner.

IP rights cannot only be licensed to others but can also be completely transferred to others. In this case the original owner loses almost all rights, except for personality rights in certain cases. In contrast to licensing, in this case it is the party buying the right that is responsible for maintaining and keeping up the right.

What do we need to check your IP rights portfolio?

At the beginning, we shall only need information on all your registered IP rights and their file number. Based on this data, we prepare a general overview and after that we are able to inform you on steps that we would suggest taking further on.