World IP Day 2023: How small businesses can protect their IP – tips from Tide’s legal experts

Intellectual Property (IP) and small businesses

IP constitutes a core asset of any business – big or small. It could be anything – from the name of your business to products and services to financial assets. With the expansion of the digital economy and the rapid tech advancements, the importance of protecting your business’ IP has increased significantly. 

It is imperative that small business owners are aware of the different types of IPs, the laws and Intellectual Property Rights (IPR) that have been instituted to safeguard them. How well and how quickly you protect your business’ IP will play a crucial role in determining business success. 

We are here to help

To observe World IP Day 2023, we reached out to our Legal Team to share some useful insights and tips for small business owners. Meet Tide’s legal experts – Steven Robinson, Senior Legal Counsel; Dobryana Pfeiffer, Senior Legal Counsel; Sonya Stoyanova, Legal Counsel; and Priyam Jhudele, Legal Counsel. Let’s get started.

Prateek: Hello Steve, Dobryana, Sonya and Priyam! Welcome and thank you for being part of this initiative. Let’s start with you, Steve. 

What is Intellectual Property (IP)? Why is it important for small businesses to protect their IP?

Steve: IP can be simply described as something you create using your mind – such as works of art, designs, inventions, brands and more. 

As a small business owner, you spend a lot of time and money creating distinctive brands and unique products to give your organisation an advantage over competitors. However, you must know how to prevent competitors from using your unique ideas or products without permission. This is why protecting IP is so important.

By protecting your IP, your business gets an exclusive right over those intangible assets you want to use. As a result, other businesses won’t be able to use these unless you grant them permission to do so. Securing protection over your business’ IP enables you to take legal action against people who infringe your rights and also helps you stand out in the market. 

Prateek: What are the different types of IP protection?

Steve: There are four main types of IP protection – patents, trademarks, copyrights, and trade secrets. Identifying which of these gives your business a competitive advantage could help evaluate exactly what you should protect first and how best to go about it. Note that different types of IP rights require different types of protection as they vary in their scope, duration and requirements. 

For example, a lot of Coca-Cola’s value is derived from its IP. It therefore protects the IP in its name (as a trademark), the recipe (as a trade secret) and even the shape of its bottles (as an industrial design)!

Prateek: Thanks, Steve. That’s useful information for small business owners.

My next question is for you, Dobryana. 

What are Trade Secrets?

Dobryana: A trade secret is anything that gives your business a competitive advantage due to its secrecy. It can be a recipe, process, formula, strategy, technique or device that your competitors don’t know, don’t have, and can’t use. The unauthorised use of a trade secret by someone who is not the rightful owner is regarded as a breach. 

In general, to qualify as a trade secret, the information must be:

• Commercially valuable because it is secret
• Be known only to a limited group of people, and
• Be subject to reasonable steps taken by you, as the rightful owner of the information, to keep it secret

Note: You could also consider trade secret protection when your invention is not eligible for a patent or if you don’t wish to disclose it publicly, which a patent requires you to do.

Prateek: What are the benefits of protecting Trade Secrets?

Dobryana:  Here are the advantages of trade secret protection:

• It doesn’t involve any admin costs
• It doesn’t require disclosure or registration
• It’s not limited in time and has immediate effect

The UK and the EU have already adopted specific regulations to protect against the unlawful gain, disclosure and use of trade secrets. However, in many countries owners of trade secrets have to rely on other general legal provisions or on the relevant contractual clauses in their agreements with employees and partners.

Note: The owner of a trade secret cannot take any legal action against the other person if trade secrets are being discovered by fair and honest means, such as by independent invention or reverse engineering.

Prateek: How can small businesses protect their Trade Secrets?

Dobryana: While large companies have the resources to manage and protect a large portfolio of IP, such as patents, smaller companies like SMEs often cannot afford to do this – therefore their reliance on trade secrets is greater.

To protect your Trade Secrets:

• Sign a good confidentiality or non‐disclosure agreements with employees, suppliers, contractors, business associates, etc 
• Educate your employees not to disclose trade secrets to unauthorised individuals or entities especially by way of notices, memos, network e‐mails, newsletters, etc 
• Make departing employees aware of their obligations towards you (their former employer) on issues related to confidentiality, trade secrets, etc
• Avoid discussing sensitive topics over phone calls or messages in public places 
• Be extra careful with any physical documents containing sensitive information – especially when disposing them – the best method for destroying paper records is shredding them
• Don’t leave the original documents containing secret or confidential records unattended in publicly accessible spaces
• Lastly, use strong passwords for your system, as well as good and up-to-date anti-virus softwares

Prateek: Thanks, Dobryana! Moving forward to you Sonya.

What is a Trademark? Why is it so important for small businesses?

Sonya: A trademark is a sign capable of distinguishing your company’s products or services from those of other companies. In common usage, a ‘trademark’ is often referred to as a ‘brand.’ It can be almost any commercial sign related to a business – a name, a shape, a picture, a colour, even a smell or a sound!

Your trademark creates an image and reputation of your company and products in the eyes of the consumers. It helps in building brand identity, goodwill in the market, developing a loyal clientele and creates a relationship based on trust. As a result, the value of your company may largely depend on the value of your brand.

Prateek: What are some key Trademark related tips for small businesses?

Sonya: As a first step you should consider a few key points: 

• What is the sign you want to protect? 
  • Here, selecting a suitable mark for your business is key. (Check the next question for some general rules which will help you decide.)
• What territory do you want it to cover? 
  • Trademarks are territorial rights. Thus, they must be protected separately in each country where your business operates
• For which classes of goods and services do you intend to use it for?
  • Think about your products and your business’ niche. Trademarks are always linked to specific goods and services with which they are used. Consider your business area at the moment as well as potential future plans for expansion in new markets and choose the right classes of goods and services based on those considerations. The registration fee goes up with each subsequent class, so limit yourself to your core 3 to 5 classes initially

Once you have all of the points above figured out, the most common and efficient way of protecting a trademark is to have it registered. You can register it in the local trademark office (e.g., the UK Intellectual Property Office or India’s Intellectual Property Office). Before applying for registration, however, you should conduct a trademark search to check if the selected mark is not already registered by someone else in the same or similar industry.

Prateek: How to choose a Trademark?

Sonya: Here are a few basic principles to take into account when deciding on your trademark:

• It should be distinctive and unique, not similar to any existing trademarks
• Don’t use trademarks that are generic or descriptive of the product in relation to which it is to be used. It’s best to come up with inventive words, or coined words (KODAK is a good example)
• It should be easy to remember and pronounce
• Don’t choose a trademark that is likely to mislead the consumers as to the nature or quality of your products or services
• Your mark will potentially be your domain name as well. Confirm the availability of the corresponding domain name before deciding on a final version

Prateek: Could you give a little more detail about domain name and how to choose one?

Sonya: Domain name is the unique address that you type into a web browser to visit a website. It is followed by an extension such as “.com”, “.org”, “.co”, “.in”, “.gov” etc. For example, Tide’s domain name is www.tide.co.

The domain name’s function is to make it easy for people to find a specific website on the internet. Because of this, it’s a good idea to register your trademark as a domain name for your company’s website. Incorporating it into the domain name will reinforce your brand and make it easier for people to find you online.

Prateek: A last question Sonya, this year’s World IP Day theme is Women and IP: Accelerating innovation and creativity.  On the WIPO website we can read  “In 2023, we celebrate the “can do” attitude of women inventors, creators and entrepreneurs around the world and their ground-breaking work.” What are your recommendations for women entrepreneurs in this sector?

Sonya: There are many women entrepreneurs in the innovation and creativity sectors who bring a different perspective, fresh ideas and play a key role in those industries. However, the data shows that far less women than men participate in the IP system. So I would like to encourage female business owners to actively use the IP system to protect their ideas. We should challenge long-standing stereotypes related to gender roles and corresponding traditional career paths. I encourage them to find female role models in their industry through networking and collaboration and proactively seek funding for their creations or inventions.

Prateek: Thanks, Sonya. My next question is for you, Priyam.

Can you explain what is Copyright?

Priyam: Copyright protects original pieces of work. When you copyright a piece of work, you have the exclusive rights to reproduce, display, perform and distribute it (with some exceptions). Unlike other types of IP, any original work is immediately protected by copyright the moment you create it. You don’t need to do anything like filling out a form or paying a fee.

Many kinds of works come under the scope of copyright protection, including original software, reels, blog posts and posters. But bear in mind that copyright doesn’t protect abstract ideas but rather specific expressions of your ideas (such as the imagery and texts in your commercial ads, not your campaign ideas in general).  

Prateek: That’s interesting! Can you explain what small businesses should know about Copyright to avoid copyright infringement?

Priyam: While it’s tempting to capitalise on copyrighted content for a marketing opportunity, for instance a viral reel or iconic moments (such as in sports), small businesses should tread carefully before doing so. If they use someone’s copyrighted work for profit without permission, they may infringe copyright and face penalties.

If you see something viral (for eg. the viral ‘Naatu Naatu’ song or Harry Styles’ latest chartbuster) and want to use it to promote your company or product, always check what licence it is offered under. This equally applies to ‘open source’ pieces of work – you should be mindful of any restrictions in their licence terms. Absence of a copyright notice doesn’t imply that a work can be used freely, even if it is available on a website. As a general rule, always seek authorisation by the owner to use the work (e.g., a photograph you found online). With social media platforms and music, it’s also a good idea to check their terms of use.

Prateek: What are some basic tips for small businesses to protect their copyrighted works ?

Priyam: As a small business, use of your protected work without permission can be quite frustrating and also damaging to your reputation at times. For example, think of a former employee using your proprietary code to build a competing product. Hence, your first priority should be to have watertight contracts. Lawyer up and ensure that your contracts with your employees and contractors grant you the ownership rights in the work they create for you, and limit how they can use your IP.

If you face infringement online, you can first check if the host platform has a content takedown mechanism (most platforms nowadays do) and get infringing copies taken down. 

If you liked the article and like what our legal team is doing for small businesses then we have some good news for you. We’re currently looking for different roles for our legal teams in India and Bulgaria; check out our vacancies at the Tide Career Page. Make sure to check our Tide careers page regularly for future opportunities!

Disclaimer: Please note that all the information contained in this post is provided for informational purposes only. You should not act, nor refrain from acting on the basis of the content provided in this post without first seeking professional advice.