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Identifying Rights in Media

Filed under: All Articles > Your Business
By: NMK Created on: July 6th, 2004
Bookmark this article with: Delicious Digg StumbleUpon

From the conception of a new product to the moment it is launched, valuable rights are being created. Briffa examines Intellectual Property Rights - and the forms which they can take.

The players in the online businesses depend on these intangible assets - known to lawyers as 'Intellectual Property Rights'. It is in these rights that many businesses find their value and nowadays it is the intellectual capital of a company that will often determine whether it represents a good investment and viable business partner. This is particularly important now that the inability to secure additional funding is forcing many companies to fold.

In contrast businesses that are conscious of their properties and rights are flourishing.  This is not a difficult position to achieve but to do so you need to identify what these rights are, where they exist and how the arise.

These rights take a number of different forms, the most important of which (from the point of view of creative business) is copyright.

What Rights? - Copyright

An initial idea is not rich in intellectual property - it is difficult to protect and difficult to value. However as soon it is translated into a physical form - either by way of storyboard, written design specification or hard code - the most basic intellectual property right exists, that being copyright.

As a rule of the thumb, copyright exists in all original creative works - hence copyright existing in original designs, video footage, the sequence of a story board, software code, in-game text, music and so on.


Where? - Copyright

Copyright works are everywhere. All artistic, literary and musical works attract protection so long as they are original. Copyright cannot however exist in the following:

1. single words and names

2. a process, e.g. means of making something

3. an idea, unless expresses a tangible form and that tangible form has copyright.


How and Who - Copyright

Copyright arises on the creation of the work. It is instant and does not require registration or any additional formality. The more important question is who created the work and who owns it. This is of fundamental importance for businesses and the development of their assets.

The general rule is that the creator is the first owner - though there are a few exceptions. The first is that employees do not own the copyright in work they create in the course of their employment. This is of crucial importance to the games industry and must be distinguished from the frightening reality that works created by a person who is not an actual employee will belong to that person NOT the person paying for the work. If that is the case for some of your works you are unlikely to own the copyright in them but may have an implied licence to use for a limited purpose.

This is alarming and can only be circumvented by something expressed in writing to the contrary and signed by the creator before or after the work is done. All freelancers working for developers should therefore have written agreements transferring rights to the commissioner. If you have these - or get them - then you will have built (or will build) your asset base.

Other Rights

Identification of rights doesnt end with copyright.  The other areas to look out for are:
1. Trade Mark Rights
2. Patent Rights
3. Database Rights
4. Image and Personality Rights
5. 3rd Party Licences
6. Know-how and Confidential Information

The golden rule with these, like copyright, is to record in a single location which of these rights you own.

Investors like to see what you own. They are interested in models, business plans and projections etc but they need to know what it is they are actually investing in and what the company has and what the company will have. For creative businesses these rights are its assets and when due diligence is conducted on companies it is vital look principally to see what these rights are - because it is on these foundations that all creative business rest.

Taking the above in turn:

1. Trademarks There is no copyright in a name or word. There are, however, trademark rights both registered and unregistered in words, logos and various other devices 'capable of graphic representation'. Such rights protect the goodwill and reputation in your business.

Unregistered rights are not easily enforceable but they have value, as they may give rise to claims in 'passing off' - for example if a third party does something the same or similar and in doing so misrepresents itself, creates confusion and causes damage. The value in unregistered marks lies in these rights.

Registered marks are more easily enforceable and therefore instantly more valuable. So every work, slogan, device, logo, name etc you have used in the course of your business has potential trademark rights.  Protecting these rights is dealt with in the next issue but by identifying them now you will be identifying assets with value. Once you know what you have you can then decide whether they are worth protecting further.

2. Patent Rights If you have something that is inventive and not in the public domain but capable of industrial application, then you may be entitled to apply for a patent. These are not cheap with world-wide programmes costing around 100,000. However to preserve these rights prior to your application, you must keep the details confidential - and if you havent done so already the chances are you will have lost them.

3. Database Right This right is similar to copyright but exists in relation to the compilation of data.  Collections of data such as directories or performance statistics have value that may be licensed to others. Accordingly, databases need protection against wholesale copying by others. This right isnt lost just because it is published and anyone using that database for a commercial purpose should pay a licence fee to the owner.

Identifying where this right exists gives you the opportunity to identify another source of revenue. It is however important to make sure that the collected data is accurate with the necessary data protection consents.

4. Personality Rights Personality rights present a number of problems for media businesses wishing to use or make reference to individuals as part of their product. They are unlikely to be an asset to a business unless a third party licence can be established (see below).

The other area where personality rights may exist is within the industry itself. Bill Gates, for example, has value in his name and face adding value to the balance sheet of Microsoft and if the CEO or lead programmer of your business is such a person there may be some justification in adding that to the intellectual capital of the business.

5. 3rd Party Licences Licences in and out represent valuable uses of intellectual property. They are common place particularly as they have a calculable revenue stream. They may also represent intellectual capital and should be valued as such. 3rd party licences in characters, existing franchises and similar contracts add value to a company now and provide further opportunities for the future.

6. Confidential information, Trade Secrets and Know How Confidential information and Trade Secrets can have huge value and should not be underestimated. The confidential information can be a business method, process or a formula - for example the Coca-Cola and KFC recipes. These add structure and value to your business.

Setting them out and co-ordinating them adds value and gives you opportunity to licence that know how.  That is how franchises are built. 

Advice

Identifying a businesss intellectual property rights is fundamental to realising its value. Businesses should therefore:

 Conduct an audit of all your creative works, know how, marks, and properties as described above.
 Establish who created them, when and on what terms.
 Catalogue all rights you now own.
 Continue the cataloguing process in future.

About the author: Briffa is a modern legal practice specialising in intellectual property the protection of copyright, designs, patents, trade marks, trade secrets and information technology. Our lawyers all have excellent legal backgrounds and are experts in this field. www.briffa.com

Comments

ronnie said:

The Creative Economy <p>If you want more background information on this area, The Creative Economy by John Howkins is a really good read. There's some great stuff on the differences between copyright, patents and trade marks, and the tensions between the European and American approaches. <br/></p>

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