IP Law FAQ
- Infringement
- Licensing/Commercialisation
INFRINGEMENT
1. Someone has copied my idea/product/service/brand/getup/documents/information what can I do?
The most important consideration in dealing with the appropriation of your creative efforts is to determine whether in fact you have any intellectual property rights (“IPRs”) that can be asserted against the appropriator.
Generally speaking the following IPR’s provide the following protection:
Patents: protect ideas and new knowledge embodied in goods and methods involves in providing services;
Trade Marks: protect brand name and other signs used as Trade Marks. This includes distinctive elements in the get up or packaging of goods in addition to the brands and other signs used traditionally as Trade Marks.
Registered Designs: protect the shape and appearance of goods, not their function;
Copyright: there are a bundle of rights in copyright that protect in general terms (i) literary works, (ii) artistic works and (iii) sound and video recordings;
In addition to the “hard” IPRs described above, there are also rights that arise through contract or equity that can be asserted over information including rights to maintain confidentiality over confidential information and trade secrets.
It is important at this stage to work out who “you” actually are for the purposes of asserting particular rights. With respect to the rights that arise by way of registration (patents, registered designs and trade marks) it is generally not hard to work out who the entity or person is that should be asserting the rights. With copyright and actions for breach of confidence, you will need to first establish who owns the rights to ensure that the right entity or person asserts them.
Once you have established what IPRs can be asserted and by who, an analysis can be conducted to determine if the IPR’s can in fact be used against the appropriator/copier. This is usually done by reference to a sample of the copied product or by reference to a description of the product or services found on the internet or in catalogues.
2. I have established that I have IPR’s and in whose name they are in, and that they are infringed, what is the next step?
Often the most difficult and time consuming part of taking action against an offending entity is working out who they actually are. This issue rears its head particularly with goods and services offered over the internet or by conglomerates where the identity of the offending party is not always apparent, even after ASIC and whois searches are conducted. Ideally, to keep the costs of preparing a letter of demand low, it is best to provide your attorney or solicitor with a sample obtained by way of a trap sale, including any invoice or sales receipt which may assist in identifying the vendor.
3. I have identified the offending party and I have established that my IPR’s are being infringed. What is next?
At this stage, what needs to be prepared is a letter of demand (also called a cease and desist letter in the USA). The letter of demand sets out who you are, what your rights are and most importantly details how it is that the offending or infringing product or service infringes your IPRs and the outcomes you seek.
The most common undertakings sought by holders of IPR’s are to
(i)cease infringement and
(ii)agree to never do what has been complained about whilst the IPRs are in force.
Obtaining the agreement from the offending party that they will not do what it is that brought them to your attention is useful because if they infringe again, you can proceed for breach of contract which is much cheaper and easier to prosecute than for infringement of IPRs.
Other commonly sought undertakings are:
(iii)delivery up of any infringing goods in their possession or under their control;
(iv)the provision of information such as:
- the supplier of infringing goods
- the provider of infringing services (in the case of a reseller)
- details of infringing methods and/or systems
- number of sales and information about the customers of infringing goods or services
- other information which allows you to calculate profits made by the offending party
(v)the payment of an account of profits or damages.
A note about an account of profits or damages. Often a major incentive in seeking to enforce IPRs is the prospect of recovering an account of profits or damages. These are often sought by way of undertakings. In many cases, an offending party is more likely to agree to cease and desist from infringing IPR’s if offered an outcome in which the rights holders forgoes any claim to an account of profits or damages. Consideration should be had as to whether it is in fact worth pursuing an account of profits or damages as firstly damages are very difficult to prove (particularly if the IPRs are held in a holding company that does not trade, and therefore, has not suffered damage), and/or that it is often very difficult to apportion what profits are attributable to any particular infringement. Unless the offending party has demonstrably made an extraordinary amount of money, it is sometimes advisable to forgo such a claim in the undertaking sought in a letter of demand.
4. The letter of demand has been sent and the undertaking sought have not been provided. Where to from here?
Off to the Federal Court! The next step in enforcing your IPR’s involves launching proceedings at the Federal Court (or Federal Circuit Court). If, depending on your circumstances, you are still unsure as to whether you definitely have a cause of action or indeed, if you can’t be sure of the identity of the proper offending party, you can apply for preliminary discovery at the Court before launching proceedings. An action for preliminary discovery is difficult to resist, and therefore often a party will comply by providing information sought in a letter sent in advance of filing proceedings (and often incorporated into the letter of demand).
At this stage there will be filing fees associated with commencing proceedings as well as, potentially, barrister fees for settling the pleadings and/or providing advice in respect of the infringement.
5. I have filed proceedings, what next?
Certainly in respect of patents and designs, and to a lesser extent, trade marks and other IPR’s, one of the most common occurrences after commencing proceedings is to receive a cross claim from the party that is sued in which an allegation is made that the IPRs sought to be enforced are invalid and an application to revoke them.
Thus from this point forward, there are essentially two sets of proceedings, one in respect of infringement and another in respect of invalidity.
6. How long will the proceedings take
It depends. Patent proceedings are very complex, often involving one or more experts that need to be identified, appointed, and instructed in a step by step manner. Patent proceedings will ordinarily take at least 1-2 year and potentially, can go for much longer depending on the size of the matter. If appeals are considered, as they often are in infringement matters, these can add further costs and time to obtain an ultimate final verdict.
Trade mark, copyright and design matters tend to proceed more quickly as any expert evidence, if required at all, is of limited scope and not as extensive as in the case of patent matters. These can be fast tracked and completed within a year.
7. What if I let infringement unchecked in the marketplace? What are the consequences?
If you know of an infringer and take no action against them it can impact you in a few ways:
- If you do decide to start proceedings in the future, you may be precluded from an account of profits or damages for the period of time you acquiesced; and
- If others start infringing such that many people in the marketplace are now infringing, in cases involving trade marks, arguments can be made that the trade mark registration should be revoked in future proceedings as the trade mark no longer operates as a badge of origin.
8. What if the infringement is overseas?
Generally speaking you will need to have IPRs that apply in each of the countries in which infringement is occurring.
If costs are to be kept at a minimum, letters of demand can be sent directly to the infringers from Australia. However, it is often advisable, particularly in cases of patent infringement, to appoint local attorneys to prepare letters of demand in each country in which infringement takes place.
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