Start-Up Cautionary Tales – Copyright

It is a truth universally acknowledged that start-ups will forget about intellectual property.
UK Intellectual Property
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It is a truth universally acknowledged that start-ups will forget about intellectual property. It's an understandable oversight: IP often flies under the radar as forgettable housekeeping and before you know it the once small, easy-to-fix jobs have erupted into angry, expensive messes. Today we're talking about copyright.

For the uninitiated, copyright is an automatic right that protects the creative work done to physically express an idea. You draw a picture, design a logo, make a website: you automatically own the copyright in that picture or logo or website. You don't need to register anything or pay a fee, you just own it and will continue to own it until the 70th anniversary of your death. Brilliant.

The good news you own all the copyright for anything you make yourself. The only tiny thing to watch out for here is: if you make something for your business and later incorporate, you, as an individual, will own and keep the copyright. It doesn't automatically pass over to the newly incorporated company. If you want the company to own the copyright you have to actively assign it. This isn't the end of the world (given that you're on both sides of the table), but is something that needs sorting.

The other good news is that if your employees create anything for you in the course of their job, any copyright will be owned by the employer (unless you specifically agree otherwise).

The bad news is that if you farm any of these tasks out to contractors, friends, family – anyone who isn't you or an employee – and you forget to record that any copyright will be assigned to you/your business, then they will automatically own the copyright in the work. And they will own it for their lifetime (plus 70 years).

Now it often isn't immediately obvious that this is a big deal, but bear with me.

Say you asked a friend (let's call her Alice) to design your logo when you're starting out. You'll probably be on pretty good terms with Alice when she sorts this for you – she does it on the cheap, you don't bother with a formal written agreement and forget to address copyright. Easily (and commonly) done.

Fast forward a couple of years: your business is now huge and profitable, but you've fallen out with Alice. Your logo is well known and an important part of your brand recognition. It's a valuable asset.

But Alice still owns the copyright in your logo. If the mood took her, she could bring a copyright infringement claim against you for the use of your own logo. She could agree to let you use the logo, but only if you pay her lots of money. Worse still, if you decided to register your logo as a trade mark, she could block the application and prevent you from getting extra protection. What are your options? Bow to Alice's demands (whatever they may be...) or risk a rebrand.

Moral of the story: get the copyright sorted when it's not a big deal and don't wait until it is a big (and expensive) deal.

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.

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