Intellectual Property Protection: When Is the Right Time?

Intellectual property protection depends on the type of intellectual property involved, as different types of intellectual property (copyrighted works, technical innovations, industrial designs, etc.) are protected in different ways and under different conditions.

Both large and small companies today launch a large number of products. In addition to quality, there is also pressure in terms of quantity and speed when bringing new products to market, because information is readily available to everyone and it is difficult to work on something in secrecy for a long time.

Since it is impossible to know in advance which product will become a market “champion” and which will be withdrawn as unprofitable, intellectual property often remains something to think about later.

Once a product proves successful and profitable, the question arises as to whether its elements are protected. Even if they are not, protection may still be possible.

However, in the field of intellectual property, “now” can be far more complicated than “six months ago”.

That is why we emphasise that it is most useful to think about intellectual property before what you are creating becomes a valuable business asset.

This does not mean that every company should register every name, design or invention created in the course of its business. It simply means that the sooner you identify what you are creating that has market value, who holds the rights to it and whether additional legal protection is required, the better.

Not Everything Is Protected in the Same Way

When a client says that they want to “protect an idea” or “protect a product”, we usually ask several additional questions.

What exactly do you want to protect?

The product name?

The logo?

Its distinctive external appearance?

A new technical solution?

Software?

The photographs and texts you use for promotional purposes?

The packaging?

Different results of creative, technical and business work may be subject to different intellectual property rights, and the conditions and methods for protecting them are not the same.

A trademark protects a sign used to distinguish the goods or services of one person from the goods or services of another.

An industrial design may protect the external appearance of a product or part of a product, as determined by its visual characteristics.

A patent, subject to the conditions prescribed by law, protects an invention in a particular field of technology.

Copyright may protect original works of authorship, which may include texts, photographs, illustrations, certain graphic designs, computer programs and other works that meet the requirements for copyright protection.

An important difference is that some rights are acquired through an appropriate registration procedure, while copyright arises upon the creation of a copyrighted work that meets the statutory requirements.

A single product may incorporate several different elements of intellectual property, each of which requires separate analysis.

There are several appropriate times for intellectual property protection:

Intellectual Property Protection Before Choosing a Name

We discussed this situation in greater detail in a previous article, but it is worth mentioning because it is one of the most common.

When a company chooses a name for a product or service, it checks whether an appropriate domain is available, hires a designer, creates a logo and begins investing in promotion. Only later does it check whether there are prior rights to the same or a similar sign.

If a problem arises at that point, the company may have to change a name that has already been printed on packaging, placed on its website, included in catalogues, published on social media, presented to customers, etc.

That is why one of the simplest rules is: the greater the planned investment in a particular name, the more important it is to check the possibilities for protecting it at an earlier stage.

Before Showing a Product or Solution to the Public

This is particularly important when a company is developing a new product, its design or a technical solution.

In an effort to test market interest as quickly as possible, a company may present a new product at a trade fair, publish photographs on social media, send a detailed presentation to potential partners or showcase it in a promotional campaign.

From a business perspective, all of this may be perfectly logical.

From the perspective of intellectual property protection, however, the moment when something becomes available to the public can be very important. For certain rights, one of the requirements for protection relates precisely to novelty. Therefore, publicly disclosing something that had previously been new may affect the possibility of obtaining protection later.

In other words, the sequence we created it – we published it – it became popular – now we will check how to protect it is not always the best approach.

A much safer approach is to check, before publicly presenting a new product or solution, whether it contains elements that should be protected and when the appropriate time for filing an application is.

When You Hire Someone to Create Something for You

If you hire a designer to create a logo and visual identity, a photographer to take several hundred product photographs, an agency to design packaging or a programmer to develop a particular software solution – can you automatically dispose of the results of that work?

Not necessarily.

In intellectual property matters, the person who paid for something is not always the person who holds certain rights to the result of that work.

Questions concerning rights of use, assignment or transfer of the relevant economic rights, permitted methods of use, territory, duration and other relevant matters should be regulated by contract when the cooperation begins, rather than several years later, when no one is entirely sure what was agreed.

Take, for example, a company that has used a particular visual identity for years and then decides to change it, modify it, register it as a trademark, assign it to an affiliated company or use it in a new market.

It then discovers that the agreement with the person or agency that created it does not regulate intellectual property rights clearly enough, and unexpectedly finds itself in a complicated process of determining ownership rights.

What could have been one or two well-drafted contractual provisions at the beginning of the cooperation now requires determining what was agreed, who created what, which rights exist and what was actually assigned to the company.

Intellectual Property Protection for Works Created by Employees

Intellectual property does not arise only when a company engages an external contractor. It is created every day within the company itself.

Employees develop software, create databases, design materials, work on technical improvements to products, create content, documentation and various other solutions.

For example, the Law on Copyright and Related Rights explicitly provides:

If an author creates a work during the course of employment while performing their employment duties, the employer is authorised to publish that work and is the holder of the exclusive economic rights to exploit it within the scope of its business activities for a period of five years from the completion of the work, unless otherwise provided by a general act or employment agreement.

The author is entitled to special remuneration depending on the effects of the exploitation of the work.

The author of a work created in the course of employment retains all copyright in that work except for the rights referred to in paragraph 1 of this Article.

Upon expiry of the period referred to in paragraph 1 of this Article, the exclusive economic rights in the work are acquired by the author.

If the copyrighted work is a computer program or database, the employer is the permanent holder of all exclusive economic rights in the work, unless otherwise stipulated by contract.

The author is entitled to special remuneration if this is provided for by contract.

The rules are different for patents and industrial designs. Interestingly, a patent is considered to have arisen from employment even if it was actually created within one year after the termination of employment.

Before Launching a Product

Intellectual property protection is often viewed from the perspective of: how can we prevent others from copying us?

However, an equally important question is: how can we make sure that we are not infringing someone else’s rights?

You may develop a product entirely independently, without any intention of copying anyone, and still come into conflict with an earlier right.

You may come up with a name that seems completely original to you, while a similar protected sign for identical or similar goods already exists on the market.

You may create a product with a particular appearance while there is an earlier right that needs to be taken into account.

When it comes to technical solutions, the issue of existing rights may be even more complex.

That is why it is important to examine the market space your company is entering. This is particularly important when large-scale production, packaging printing, a marketing campaign or distribution is planned. The more money has already been spent, the more expensive it becomes to correct the problem.

Tip: If you cannot determine simply by checking the website of the Intellectual Property Office whether someone has protected the same or a very similar sign, you can also contact an adviser at the Office directly.

Intellectual Property Protection Before Entering a New Market

Even a company that has operated successfully in Serbia for years (the brand is well known, the domain exists, its social media accounts have a significant number of followers, and it has a registered trademark) must conduct a comprehensive review before entering a foreign market.

Industrial property rights are territorial in nature. The fact that a company has certain protection in Serbia does not automatically mean that it has the same protection in every market it wishes to enter.

Moreover, the issue is not only whether the company will be able to protect its sign in that market.

It is also necessary to check whether third parties already hold earlier rights in that market that could present an obstacle.

Therefore, when planning the internationalisation of a business, in addition to decisions concerning distributors, logistics, pricing and marketing, the intellectual property protection strategy should also be reviewed.

When Negotiating With an Investor, a Buyer of the Company or a Major Business Partner

While a company is small, certain questions may remain unaddressed for years.

But when an investor appears, a large company wants to become a distributor, or the owners decide to sell the business, everything that was previously referred to as “our logo”, “our software”, “our product” and “our brand” is viewed much more formally.

Who owns the trademark?

Who is the domain registered to?

Is the design protected?

Who created the software and how are the rights to it regulated?

Are there agreements with authors and external contractors?

In which territories are rights registered?

Is there a dispute or a third-party claim?

Can the company actually dispose of the assets it presents as its own?

Intellectual property then becomes part of the company’s value, but only if it can be established what the company owns and which rights it actually holds.

It is not the same to say that you have a well-known brand and to demonstrate that the company has properly regulated rights to its key elements.

When, Then, Is the Right Time for Intellectual Property Protection?

There is no single point in the life of a business at which intellectual property should be “sorted out” and then forgotten.

New rights arise as a company develops products, engages employees and external contractors, enters new markets and builds its brand.

However, one rule is repeated throughout all of the previous examples: it is best to think about protection before making a business decision that will later be expensive or difficult to change.

That is why a legal assessment of intellectual property makes the most sense while there is still room to decide what should be protected, how it should be protected and in which markets – rather than only once a competitor, dispute or obstacle to further business development appears.

Petrović Mojsić & Partners Law Firm