3 von 5

1. Mai 2018

Startups and VCs – 3 von 5 Insights

Tech startup IP myths

There is a lot to think about when setting up a new business. It's crucial to take protecting your intellectual property rights seriously from the outset. Don't believe the following myths!


I commissioned the content therefore I own all the rights in it

Commissioning a work (outside the employer/employee relationship) does not always mean you own it. For example, apart from in very limited circumstances, the commissioner of a copyright work is not the owner of that work. In general, however, commissioners of UK registered and unregistered designs are the first owners of the commissioned works. You should always have a written contract with consultants or other third parties, specifying who will own the IP. See our article for more.

My company is too small at the moment to make it worthwhile obtaining protection for my IP rights

While the idea of protecting your IP may sound expensive and time consuming, it is well worth the initial investment and it isn't as expensive as you may think. For example, the filing fees for registering a single UK/EU trade mark in one class are £170/€850, respectively.

Ironing out any issues regarding IP rights at the beginning may save you considerable time and money in the long run. For instance, running clearance searches as part of your trade mark filing strategy at the outset will help you flag whether your chosen brand/mark is likely to conflict with any existing rights. This is important to help avoid the risk of costly and time-consuming infringement proceedings and/or rebranding further down the line. Similarly, companies which fail to register their trade marks at the beginning may find it more difficult to challenge third party infringement of their marks further down the line if they are relying on unregistered rights.

There are, however, other IP rights which you do not need to register to benefit from legal protection. For instance, in the UK copyright is an automatic right which arises whenever an individual or company creates a protectable work. Similarly, designs created in the UK or EU may also benefit from unregistered design right protection (although it should be noted that the protection period for unregistered designs is considerably shorter than for registered designs).

Registering a domain name or incorporating a company under a certain name automatically gives you trade mark rights in the same name

Registering a company name or domain name does not automatically give you rights to use the same name under trade mark law. Such rights only arise from marketing and use of the name in the course of business. As such, a domain name registration will only stop another party from registering the same domain name. If the domain name conflicts with an existing trade mark, it may have to be given up. Likewise, where a company has been incorporated under a name in which someone else has generated goodwill, that person may apply to ask for the company name to be changed.

Once I've registered my rights, it is irrelevant whether I actually use them

For design rights, copyright and patents, this is the case. However, if a trade mark has not been used for a continuous five year period, it becomes vulnerable to revocation. Use must be made of the trade mark by the owner of the trade mark (or with their consent) and the use must be genuine and not token.

If I change seven things about my product, my competitors can't argue that I'm infringing their IP rights

There are no reliable, valid numerical rules of thumb. The English legal test for copyright infringement is whether the defendant has copied all or a substantial part of the earlier work. It is possible to copy a relatively small amount of the earlier work yet still have copied a "substantial part", especially if the 'best' or original/distinctive bits have been taken. The key question is whether the part that has been copied contains the expression which is the author's own intellectual creation.

In design law, the test for infringement is whether the later design produces on the informed user a different overall impression from the earlier design. Therefore, changing a fixed number of design features, whether seven or another apparently 'safe' number might prevent infringement but, of course, it depends on what and how much has been copied from the original.

Scraping data from the public domain is ok

Just because content is freely available online, does not mean it is necessarily free to use. While there is no specific UK legislation which restricts the use of web scraping itself (except in relation to some niche sectors), unauthorised use of publicly available web content can still amount to copyright and/or database right infringement. In relation to web content which falls outside the definition of a copyright work or a database, where the terms of the website expressly prohibit the use of web scraping, the website owner may also be able to prohibit such use under contract law. It is also possible that a website owner may also be able to bring a claim for trespass to chattels (a common law right), or alternatively pursue a claim under the Computer Misuse Act 1990 which prohibits unauthorised access to, or modification of computer material. It is also worth remembering that the use of personal data is strictly regulated in the EEA under the General Data Protection Regulation which applies from 25 May 2018. This is ultimately a complex area of law and each case will turn on its own facts. If your business model relies on scraping data from another website, we recommend that you seek legal advice in relation to the specific application of this technology within your business.

I don’t need to worry about copyright when dealing with open source software

Again, just because open source software is offered for free, this does not mean that the developer has given up their rights in the source code. The extent to which you are able to use, modify and exploit this code will depend on the terms of the open source software licence, just like other intellectual property. One important distinction is the difference between permissive open source licences and restrictive open source licences (also known as "reciprocal" or "copyleft" licences"). Permissive licences usually only require that any onward transfer or licensing of the original software is on the same terms as those on which it was provided. Such licences generally also permit a licensee to freely change source code and combine the open source software with other software code without placing restrictions on the modified software and the onward licensing of the modified software. On the other hand, restrictive licences generally impose strict conditions where the open source software is modified or combined with any other software (including proprietary software). In certain instances, this can lead to the result that any combined software must be issued on the same terms as the original open source software (effectively, rendering the proprietary elements of the combined software subject to the same open licence terms). Read our article on open source software for more.

If you have any questions on this article please contact us.

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