Information
& Communications Technology
and
Intellectual Property Rights
ICT
explained
Protecting
Intellectual Property Rights ('IPR')
ICT Contracts
The
law relating to Information and Communications Technology
and Intellectual Property Rights is complex. The
information set out below is only intended as a
general overview.
ICT
explained
In the digital age the use of Information and Communications
Technology ('ICT') is crucial to many businesses.
Because of its commercial value the creators and
developers of ICT want to protect their intellectual
property in such technology by the use of their
Intellectual Property Rights ('IPR').
What is Information
& Communications Technology?
The automated transfer and the processing of information
and communications primarily through computers.
What is Intellectual
property?
The law recognises that certain types of knowledge
should be treated as private property. The term
is used to cover a wide range of knowledge, information
and ideas. IPR (Intellectual Property Rights) may
be protected by copyright, trademark or patent.
Other know how, ideas and commercial information
may be protected by confidentiality or other similar
agreements.
IT Terminology explained
RAM 'random access memory': a temporary
storage facility for holding information.
ROM 'read only memory': a permanent
storage facility for information.
Operating or systems software:
instructs the computer to read disks, control the
screen display etc.
Applications software: carries
out the application e.g. word processing.
Object code: a translation of the
source code into a language the computer can read.
Most computer programs are distributed in this format.
Source code: the higher-level language
in which the computer program is originally written.
Access to this code will be needed in order to support
or modify a computer program.
Software licence: the commonest
way in which an owner of software will seek to 'sell'
their product. In return for a one off or monthly
payment the customer acquires the right to use the
software subject to terms and conditions. A typical
licence may prevent the copying or onward sale of
the software.
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Protecting
Intellectual Property Rights 'IPR'
This can be done in a number of ways:
Copyright
Patent
Trademark
Design law
Confidentiality
agreements
Copyright
is the right given to the authors or creators of
'works' such as books, photographic images, films
or computer programs to control the copying or other
exploitation of such works. Copyright begins automatically
on the creation of a work without the need for any
legal formalities.
(1) The work must fall into one of the eight types
defined by The Copyright Designs and Patents Act
1988 (as amended) ('the Act') these include works
of a literary, dramatic, musical and artistic nature.
Apart from books, photographic images and films,
it also includes computer programs and works of
architecture.
(2) The author must be a qualifying person (ordinarily
a UK resident or the work was first published in
the UK).
(3) There must be a written or other record of the
work. A copyright owner should keep all working
drafts, samples and materials as in any dispute
they can help to show the originality and ownership
of the work. Ideas and undeveloped concepts which
have not been committed to any form of record will
not be protected.
(4) The work must be original. Copies are not protected.
The originality need not be great, however there
must be some degree of skill, labour and judgement.
(5) The use of the symbol © is not essential,
however it shows that copyright is claimed for a
particular work.
(6) Copyright works can be sold or transferred like
any other property. The most common way of doing
this is by assignment or licence.
(7) The Act prohibits the infringement of copyright.
Remedies for infringement can include claims for
damages, account of profits and injunction. There
can also be criminal penalties.
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Patent
A patent is the registering through the patent office
of the right to exploit a product or process you
have invented.
In order to register a patent the Patents Act 1977
('the Act') lays down four conditions that must
be satisfied:
(1) The invention must be new
(2) It must involve an inventive step
(3) The invention must have an industrial application
(4) It must not be an excluded product
Although a patent may be granted it is not
necessarily valid - the validity of a registered
patent can be challenged at any time on the basis
that the product in question is not new.
A new product
The invention must have absolute novelty and not
just be the current state of the art.
An inventive step
Is an invention that is not obvious to a person
skilled in that art.
Industrial application
There is no need for the product to be mechanical
merely that it has an application in commerce or
industry.
Excluded products
The Act has seven excluded categories:
(1) A discovery, scientific theory or mathematical
method
(2) Works normally protected by copyright
(3) Schemes, rules or methods for playing games,
performing mental acts, doing business and computer
programs
(4) Information presentation
(5) Inventions that offend public morals
(6) Biological (but not micro-biological) processes
for the production of animals and plants
(7) Surgical or therapeutic treatments or humans
or animals
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Trade
Mark
Trade marks are a graphic sign, which distinguish
goods or services of one business from that of another.
Registration grants an exclusive right to use the
trade mark for a 10-year period renewable thereafter.
A trade mark can extend beyond the name of a product
or business to include packaging, distinctive shapes
and a persons name. It can consist of words, designs,
letters or numerals.
As with patents trade marks are open to
challenge
Registration of a trade mark will be refused
if:
(1) They are not distinguishable enough or do not
have a distinctive character
(2) Trade marks which merely designate quality,
quantity, geographical origin etc.
(3) Trade marks which consist only of signs or designs
in common trade usage
NB The above rules will not apply
if the trade mark has prior to registration acquired
a distinctive character as a result of the use made
of it.
Service marks etc
In addition to trade marks, service marks are also
registerable. This has now extended to include colours,
smells and sounds.
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Design
law
A design may be protected:
-
by
registration under The Registered Designs Act
1949 (as amended) ('the Act') and The Registered
Design Regulations 2001 ('the Regulations');
-
automatically
as an unregistered design right;
-
in
some cases by copyright, where it comprises
a work of artistic craftsmanship.
The
purpose of the Act was to protect the appearance
of an industrially-produced object, a surface pattern
or a shape that had 'eye appeal'. Under the regulations
this has now been extended to include amongst other
things handicraft items and graphic symbols and
the 'eye appeal' test has been abandoned.
Trade marks and Patents
If the design is particularly distinctive or involves
an inventive step then it may be registerable as
a trade mark or patentable.
Registration of a design
A design may be registered under the Act provided
it is new and has individual character.
'design'
Means the appearance of the whole or part of a product
resulting from the features of, in particular, the
lines, contours, colours, shape, texture or materials
of the product or its ornamentation.
Unregistered
design right
These are protected under The Copyright Designs
and Patents Act 1988. The design must be original.
Protection extends to both functional and aesthetic
designs. A design is not original if it is commonplace.
It does not however have to be new or a novelty.
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Confidentiality
agreements
Not all business secrets and confidential know-how
can be protected by patent or copyright. Such technical
information is often protected by a confidentiality
agreement. Such provisions may be contained in a
joint venture or employment agreement. Compliance
with such an agreement can be enforced by an injunction
Computer
programs and IPR
Computer programs are defined as literary works
and qualify for copyright protection.
Copyright is at the core
of software agreements and prevents the copying
of software without the consent of the owner. As
any use of software involves an element of copying
this is permitted by the software licence, which
places limitations on the extent to which this can
be done.
The patenting of computer
programs is of ongoing debate. Although the program
it self cannot be patented the technical effects
it produces, 'may be patented if they produce an
effect that was greater than would necessarily follow
from the running of any program on a computer' -
UK Patent Office Practice Note 19th April 1999
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IT
Contracts
We set out below some of the things you should consider
when supplying or buying IT
Contracts
For a general explanation on how contracts are made
please go to the Law and
your Business section of our website and look
under the heading of Contracts
and terms and conditions of trading.
Sale or licence
Software is more often sold under licence than by
way of outright sale. This gives the owner of the
software the maximum opportunity to exploit its
sale while strictly controlling its use and exploitation
in the hands of the purchaser. Licences will often
prevent the transfer of the software to another
party. This is done either with a view to maximise
sales or where there are on going payments to ensure
any transferee will be a good credit risk. A software
licence will normally be non-exclusive, as the grant
of an exclusive licence would transfer ownership
of the software for the period of the licence which
would mean the developer would not be able to sell
licences elsewhere.
Specification
It's important to establish what the customer's
requirements are and how they will be met. What
products does he want? What standards are to be
achieved and how will they be measured? While the
Supplier needs to prevent ever-moving 'goalposts',
the Customer should insist on some flexibility to
implement necessary changes, which become apparent
during any development or installation stage.
The parties should agree what the delivery and installation
details for the hardware and / or software will
be. For what period can it be, used, distributed,
modified or displayed. If the goods are supplied
under licence what is to happen to them when the
licence expires? It is important that the specification
details the make and model of all hardware to be
supplied. Software should state its functionality
and technical specification. Legal ownership of
all intellectual property rights in both hardware
and software should be clear.
Definitions
There is a wide disparity of technical knowledge
amongst suppliers and consumers. This makes it important
to have all key technical terms properly defined
in order to prevent misunderstandings arising.
Ownership of Intellectual
Property rights
Some companies protect their IPR by owning it through
a non-trading holding company. The customer need
to ensure that the software supplier it is contracting
with is in the position to make the guarantees and
warranties which are set out in the agreement and
is also in a position to control the source code.
If the supplier is it self a licencee then further
agreements may be needed to ensure that the owner
of the software provides the necessary escrow arrangements
and performance warranties. Equally the customer
may want to ensure that the rights being granted
to it will also be available for the benefit of
its own subsidiary and associated companies. In
many small software companies key personnel may
be essential to the programs performance and the
customer should consider making such individuals
party to any contract to obtain the maximum guarantees
and warranties of performance and quality of service.
Territory, hosts and
sites
Most software licences will define the territory,
system or location in which the software can be
used. If the customer proposes to use the software
in another country it is important to check the
supplier can grant such rights. The price to be
paid for the software will often influence the number
of computers, sites etc it can be used at.
Use of the source
code and escrow agreements
While the licence will normally include the object
code it will often not include the source code.
The terms on which access is given to source code
will be far stricter than where object code is involved.
Customers should consider what access they will
need to the source code for the future running of
their systems and take the necessary steps to ensure
they will have access to it.
Modifications and
maintenance
If a customer wants to be able to carry out maintenance
and modifications to the software then the licence
should set out his rights in this respect. A licensee
now has a legal right to decompile a program in
certain circumstances. The parties should also agree
as to who will be the owner of any such modifications
or improvements. Although the software provider
may insist on ownership he may agree to pay a royalty
on any subsequent sales of the upgraded program.
Updates and enhancements
A customer will want to know what their rights will
be to systems upgrades and user documents. They
will also need to ensure that their rights to these
mirror the terms on which the original software
is acquired. This can be of particular relevance
where rights to access the source code will be granted.
Warranties
Different warranties may be applicable between,
hardware, software, third-party products and consultancy.
The extent of the warranty and exclusion of liability
for each needs to be considered and also balanced
against the insurable risk of each. While mass market
software may be treated as 'goods', a more bespoke
product is likely to be treated as the supply of
services with different implied warranties applying.
A customer will be seeking assurances as the functionability,
reliability and service provision for the product
together with confirmation that all necessary IPR
rights are in place. The supplier will want to limit
the overall amount of liability and exclude it where
the customer has carried out unauthorised modifications
or other breaches of contract.
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