Isle of Man: Intellectual Property Audits

Last Updated: 11 January 2007
Article by Claire Milne

In today’s knowledge economy, it has been estimated that over 80% of any company’s value lies in its intangible assets, namely its Intellectual Property and its Intellectual Assets.

Intellectual Property is the name given to the output of innovation and creativity. Intellectual Property Rights is the name given to the legal rights granted to such.

"Intellectual Assets" is a wider term than Intellectual Property in that it extends to all knowledge that has market value. Examples of Intellectual Assets are staff expertise, market intelligence, strategic contracts and trade secrets. Knowing how to do something is not, in itself, an Intellectual Asset – that knowledge only becomes an asset if it has some form of commercial value or market demand. However, if you do not even know what Intellectual Property and Intellectual Assets are owned by your business, then how can you exploit them?

The principal forms of Intellectual Property Rights are:-

  • patents;
  • trade marks (both registered and unregistered);
  • copyright;
  • database rights;
  • design rights (both registered and unregistered);
  • confidential information/trade secrets.

Patents

A patent is a monopoly right that protects new products and processes, provided that such meets the requirements of the relevant legislation in that it must be novel, involve an inventive step and have industrial application. Patents are essential to sectors such as the pharmaceutical and manufacturing industries however, patents are not relevant just for big business as patents can be obtained for small, incremental improvements in technology and can generate significant value for any business.

The Isle of Man does not have its own patents register but the UK Patents Act 1977 extends to the Isle of Man. If granted, the patent gives a monopoly right to the owner of the relevant product or process for 20 years.

Trade Marks

The value and number of trade marks have grown dramatically in the post-war consumer boom. Why does the consumer buy Nike or Reebok trainers rather than a cheaper make – is it because the product is better or is it the power of the brand? Did you know that the names David Beckham and Tiger Woods are registered trade marks but that Sir Alex Ferguson has recently been refused a UK trade mark registration for his name?

Trade marks can be both registered and unregistered. Unregistered rights arise through use and the action that is taken against a third party using an unregistered trade mark unlawfully is known as a "passing-off" action. Passingoff actions are however, notoriously difficult to prove and therefore the better protection comes in the form of registered trade marks. As with patents, the Isle of Man does not have its own registry for trade marks but registration is effected via the Trade Marks Registry, which is part of the UK Patent Office and the UK legislation in this area, namely the Trade Marks Act 1994, applies to the Isle of Man.

Copyright

The law of copyright underpins many industries, including the music industry, the software industry, the publishing industry and the broadcasting industry. Copyright is a right that arises automatically and generally protects original literary, artistic, dramatic works, films, sound recordings, broadcasts and typographical arrangements of printed works. Software is regarded as a literary work and therefore the traditional protection for software is copyright, although it is now possible to obtain patents for software in certain circumstances.

In the Isle of Man, copyright is protected by the Copyright Act 1991 (Act of Tynwald) and in the Isle of Man, the general length of protection for copyright is the life of the author plus 50 years (in the UK, the general rule is that copyright lasts for the life of the author plus 70 years).

Database Rights

Database rights were introduced by Part 2 of the Copyright (Amendment) Act 1999 (Act of Tynwald). This legislation reflects generally the database right that exists in the UK. The database right is separate to any copyright that may exist in or be included in any contents within the database. The database right only exists however if there has been substantial investment in obtaining, verifying or presenting the contents of the database. The owner of the database has a right for fifteen years to prevent the extraction and re-utilisation of all or a substantial part of the contents of the database.

Design Rights

Design rights can be both registered and unregistered. An unregistered design right is similar to copyright in that it is a right that arises automatically and no registration process is required. Unregistered design right is regulated by the Design Right Act 1991 (Act of Tynwald). Unregistered design right protects the design of any aspect of the shape or configuration (whether internal or external) of the whole or any part of an article, provided that the design is not commonplace in the design field in question at the time of its creation. The right lasts for a period of fifteen years or ten years from the first sale or hire of the design.

A system also exists whereby designs can be registered under the Registered Designs Act 1949 (Act of Parliament) as this UK legislation extends to the Isle of Man. A registered design is a monopoly right for the appearance of the whole or part of a product resulting from the features of, in particular, the:-

  • contours;
  • lines;
  • colours;
  • shape;
  • texture; or,
  • materials;

of the product or its decoration.

The design itself is protected no matter what product the design is applied to. Registering a design gives the owner the exclusive right to the design in the United Kingdom and the Isle of Man for a maximum of 25 years. Before a registration will be granted however, the design must be "new" and have "individual character", as these terms are defined under the legislation.

Confidential Information

Every business will own confidential information, the disclosure of which would be detrimental to the organisation. This may consist of information such as client lists and information relating to areas such as production processes, research and development, new business projects and any finances of the business.

It is arguable whether confidential information and/or trade secrets are distinct forms of intellectual property.

However, whether they are regarded as forms of intellectual property or not, the law does provide the means by which they are protected. Indeed, in the case of information which can be commercially used, the law allows that information to be protected and exploited by the organisation that owns it. In addition, the law relating to protection of confidential information compliments the intellectual property rights system as it provides a form of legal protection to ideas and inventions before the stage when formal registration may be possible. For example, an idea may be at too early a stage for a patent application to be filed. However, to protect the idea prior to the patent application being filed, confidentiality agreements are essential if the idea requires to be shared with third parties.

The law of breach of confidence can be extremely wide. For example, the law in this area has in the past few years been used by Catherine Zeta-Jones in an attempt to prevent the publication of unauthorised photographs of her wedding. It is an area of law in which the boundaries are constantly being pushed and it can form a useful tool to the business requiring to protect its intellectual property.

Intellectual Property/Intellectual Asset Audits

The value of any business is increasingly tied to its intangible rather than its tangible assets. However, if you do not recognise what these assets are then you cannot generate value from them. All businesses should therefore be performing audits of

Intellectual Property/Intellectual Asset Audits

The value of any business is increasingly tied to its intangible rather than its tangible assets. However, if you do not recognise what these assets are then you cannot generate value from them. All businesses should therefore be performing audits of their Intellectual Property and Intellectual Assets so that they can be managed effectively.

Intellectual Property and Intellectual Assets have value in that they can: -

  • Be traded e.g., licensed, franchised, sold, mortgaged;
  • Assist in business strategy, business models and alternative streams of income;
  • Act as a marketing tools;
  • Deter competition.

Intellectual Property and Intellectual Asset Management

The stages by which Intellectual Property and Intellectual Assets are managed include: -

  • Gaining an appreciation of what to look for in your business;
  • Identifying your Intellectual Property/Assets;
  • Analyzing and prioritising your assets;
  • Developing Intellectual Property/Assets management strategy;
  • Communicating to investors, backers, employees, potential purchasers of your Intellectual Assets;
  • Extracting value.

Intellectual Property audits are of benefit to all businesses at all stages of their development in the business lifecycle. To enable businesses to start measuring and obtaining value from their Intellectual Assets and Intellectual Property, it is necessary to first identify and thereafter protect and exploit these key resources. Identifying and understanding the assets of a business is fundamental to the effective management of that business.

Any Intellectual Property audit is design to allow the organisation undertake an initial appraisal of its Intellectual Property/Assets and to recognise and protect such. As an outcome of the audit, it is possible to produce an Intellectual Property/Asset register which can form an appendix to the company’s business plan, marketing plan or other strategic documents.

Scope of the Audit

The objectives of the audit must be considered at the outset as should the scope of the audit. For example, are all categories of Intellectual Property or Intellectual Assets to be viewed exhaustively, or will the audit be focused on key product lines or territories?

Any audit consists of firstly, information gathering and secondly, the preparation of the audit report and lastly, the preparation of the audit register.

In undertaking any audit, ask yourself the following question: -

  • what are the income generating areas of my business?
  • what unique selling points does my business have? How does my business currently protect these?
  • will the business mix change in the future?

Intellectual Property Assets and the Business Lifecycle

Formation

Depending on the nature of the business, it may benefit from protection such as registering a trading name as a domain name and registering trade marks. Intellectual Property audits may also be untaken to limit liability and reduce the risk of claims of infringement of a third party’s Intellectual Property Rights.

Raising Capital - Flotation/Loan/Private Investment

A managed Intellectual Property portfolio can help make a business seem more secure/attractive.

New Products/Technology

All Intellectual Properties should be fully protected and up to date. All new produces and technology produced by the company should be assessed to determine what Intellectual Property protection is appropriate. Similarly, changes in the law require to be taken into account to assess impact on the business’s portfolio to avoid potential liability.

With an estimated 80% of a company’s value lying in its intangible assets, it is vital that organisations are fully informed and proactive to ensure their IP is protected. Legislation exists to protect IP but this is only effective if an organisation adopts a pragmatic approach and seeks appropriate advice which ensures that it operates within the legal framework.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.