How Valuable is Your IP
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Intellectual property ("IP") rights are a valuable
commercially assets. However, it is sometimes not taken seriously because of its
The resale or book value to any IP right which is still in
enforce will have resale value and can in some cases be used as security against
However, IP rights can diminish. Listed below are some
reasons as to why this may happen:
(1) Design, trade mark and patent
registrations may lapse irretrievably if renewal fees are not paid on time.
(2) A copyright, unregistered trade mark or
design right will become of no value if a third party successfully claims that
use of the right involves an infringement of the third party's own IP right.
(3) If the owner fails to bring proceedings
against others who infringes its rights (i.e. the copying of music and films).
(4) The subsistence of IP rights
can also be challenged; for example, in a copyright infringement claim, the
defendant may allege that no copyright subsists in a literary work because it is
substantially a copy of a pre-existing literary work.
A key factors in determining the value of a company's IP is
how separable it is from the business as a whole. IP that produces a steady flow
of income is much more easily valued and separated from the owner's business as
a whole than an IP right which is obviously valuable, but less separable or
transferable (such as copyright in a company's website pages).
Security with Patents
Under s30 of the Patents Act 1977, parties are able to take an equitable charge
over a patent and over any licence or sub-licence of a patent. The requirements
are that the charge must be in writing and signed by both parties, otherwise it
is void. It also needs to be registered at the UK Patent Office within six
months of the charged being agreed.
Note: If a charge remains unregistered
it will be void against a liquidator or administrator of the company which owns
Security with registered trade marks
Registered trade marks can be assigned to for example to banks by
way of security. A requirement is that the company will need to use the
registered trade mark in the course of its business. Once the mark trade has
been assigned to the lender it must be accompanied by a licence allowing the
original company to use the trade mark going forward.
Note: It is vital that the licence is
exclusive, as additional licences could dilute the value of the registered trade
mark if they are allowed to use it in the course of trade also.
Riyaz Jariwalla is a
solicitor who specialises in intellectual property law and commercial
About the Author
Lawdit Solicitors offer services and
advice for litigation, commercial contracts, Intellectual Property and IT legal
agreements. We are experts in commercial law with a heavy emphasis on
Intellectual Property, Internet and e-commerce law. Lawdit is a member of the
International Trademark Association, the Solicitors' Association of Higher Court
Advocates and we are the appointed Solicitors to the largest webdesign
association in the world, the United Kingdom Website Designers Association.
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Article Published/Sorted/Amended on Scopulus 2008-07-27 14:41:27 in Legal Articles