IP Disputes: How to avoid them and what to do when they occur?

Intellectual property (IP); including patents, trade marks, copyrights, and other forms of creative and innovative works, is one of the most valuable assets a company can possess.

Protecting your Intellectual Property is vital to maintaining your company's competitiveness, market position, and reputation. Failing to accurately protect your assets can result in disputes which could lead to costly litigation, legal fees, damage to your reputation, not to mention the time invested to resolve such matters. This article aims to provide an overview of IP disputes, how to avoid them and some things to think about when they occur.

IP rights; valuable assets, which need protecting

IP rights provide companies with an exclusive right to use, license, or sell their innovative and creative works, products, and services. They allow businesses to prevent competitors from using or copying their brand, products, designs, and inventions.

For example, registered trade marks protect your brand identity, such as your company name, logo, and/or tagline, giving you the exclusive right to use it in connection with the goods and services you offer and to prevent others from using similar marks that could confuse customers.

By registering your trade marks, registered designs and/or patents third parties are able to identify and avoid infringing your rights. Registered IP rights serves as a deterrent to potential infringers, as they are aware of the legal consequences of infringing registered IP.

It is important to protect your rights as failing to act against an infringer can have an impact on the rights themselves. You could be deemed to have consented to their use and as a result lose the ability to take action later down the line. Therefore, it is crucial to have an effective enforcement programme to identify and act against potential infringers early so as not to dilute the effectiveness and enforceability of your rights.

Having the right protection against IP disputes and unjustified threats

When someone infringes your IP rights, you may want to take legal action to protect your interests. The first step is often to send a cease-and-desist letter to the infringing party, demanding that they stop using or copying your IP. However, companies need to be aware of the boundaries of their IP rights and avoid abusing their monopoly position.

In particular, UK law prohibits ‘unjustified threats’ in some circumstances. This refers to a situation where an IP rights owner makes a threat to sue or take legal action against an alleged infringer, but the threat is not supported by valid legal grounds (e.g., if the right relied upon is invalid). Businesses need to be wary of sending cease and desist letters that contain unjustified threats because such threats can result in serious legal consequences. If the alleged infringer believes the threat is unjustified, they may file a counterclaim against the IP owner, seeking damages for any losses they suffer as a result of the threat.

Businesses should seek legal advice before pursuing the enforcement of IP rights (even where they are registered) to ensure any cease-and-desist letters or legal threats are based on valid legal grounds. By doing so, they can avoid the risk of being accused of making unjustified threats and facing the potential legal and financial consequences of such.

Avoid infringing someone else’s IP

To ensure that you do not infringe someone else's IP rights, it is important to conduct thorough searches to ensure that your product or brand does not conflict with any existing IP rights.

Brand disputes are among the most common IP disputes and companies should conduct thorough trade mark and other searches before adopting a new brand name, logo, or slogan. Similarly, if you plan to create a product with a new design it may be important to search for registered designs and conduct freedom to operate searches in respect of a product functionality to ensure your product doesn’t conflict with existing registrations.

These checks can be completed using relevant public registers; however, they can be difficult to navigate, so we work closely with our clients before the launch of any new brand or product, to ensure that these searches are completed accurately to identify and manage the risks of infringement. It is advisable to instruct checks and searches as early as possible because the results can help shape the design process and avoid unnecessary costs. Where these searches identify earlier rights, it may be possible to apply to invalidate such rights on various grounds, paving the way for you to step into the space.

Avoiding copyright infringement follows a basic principle of not copying someone else's work without permission. This means either creating original content or obtaining permission from an author to use their work. This includes everything from social media output, marketing materials, adverts, software etc. If you use third-party contractors (freelance designers/writers/photographers/developers) to create works for you, it is important you have a written agreement in place that assigns the copyright to the you (as such a transfer of ownership is not automatic in UK law). This will ensure that you have the right to use and exploit the work.

Being accused of IP Infringement

If you are accused of infringing someone else's IP rights, it will be necessary to consider the strength of their claim, often with a detailed assessment of the validity of the rights they are asserting (e.g., whether their trade mark, registered design or patent is valid and if there are grounds to challenge it) and to respond to their allegations.

It may be possible to agree a commercial solution in the pre-action stages of any IP disputes, for example by agreeing a co-existence agreement, licence agreement or some other commercial arrangement, resulting in both parties avoiding the time and costs of a lengthy dispute.

It is important that any dispute is settled in writing and that you do not admit to any infringement. Any agreement should be in exchange for the other side waiving their rights to take any further action against you.

Staying focused on your business when litigation is afoot

IP disputes can be stressful, costly, and time-consuming, and may distract companies from their core business activities. To stay pragmatic and focused on the big picture for your business, companies should adopt a proactive and strategic approach to IP management.  In particular you should:

• Regularly review your IP assets and identify potential risks and opportunities.
• Have a clear IP strategy that aligns with your business objectives, to stay ahead.
• Have a clear understanding of your legal rights and obligations and work closely with your legal representatives to develop a litigation strategy that aligns with your business goals and objectives.

Our experienced IP lawyers are able to guide you through these legal processes and protect your interests, whilst bearing in mind all of your commercial considerations.

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If you would like to discuss anything relating to IP disputes, please contact Paul Taylor and Simon Barker.