Protecting Business Ideas Intellectual Property

General term for assets that have been created by human ingenuity or creativity e.g. music, writing, photographs, engineering or other inventions Governments are keen to protect IP because otherwise there would be no financial incentive to create anything

Copyright Applies to original written work, e.g. Books Newspaper articles Song lyrics Occurs automatically Literary copyright lasts for the lifetime of the author plus 70 years

Why copyright? Cost of developing a PlayStation 1 game was c. £500,000 PlayStation 2 game was c. £5 million PlayStation 3 game is more like £20 million To justify this expenditure, software producer needs to be confident that the game will sell millions of copies Copyright may, therefore, be crucial to the development of an industry

Patents Purpose is to provide a window of up to 20 years in which the work of an inventor cannot be copied by anyone else Patent period starts from the moment the patent is applied for IPO (Intellectual Property Office) admits that applications take at least 2.5 years to process and can take up to 5 years!

Patents Act as incentive to the inventor & potential investors Can mean higher prices for the consumer due to monopoly power Obtaining a patent can cost between £1k - £4k for the UK alone If a product has worldwide potential, patent applications will be required in other countries Total cost could then be more than £50k

Enforcing patents Breaking a patent is not a criminal offence, but a civil offence If a competitor breaks the patent, the patent owner has to sue the competitor Court proceedings might ruin finances

Trademarks Any sign that can distinguish the goods and services of one trader from those of another These can be words, logos, pictures, sounds, smells, colours … or any combination of these Trademark = a ‘badge of origin’, a way to spot one product or brand in a herd of competitors

Enforcing trademarks To have any force in law, a trademark must be registered at the IPO To get registered, the mark must be truly distinctive & original Registering a trademark costs relatively little, perhaps £1k - £2k Innocent Drinks believes that early registration of its trademarks was crucial to the company’s success

Why are trademarks so important today? Examples: Nike Levi Jeans BMW – ‘the ultimate driving machine’

Internet Piracy In 2003, Robbie Williams was quoted as saying that downloading music from the Internet was ‘great’ Record companies say that song-swap networks are just like shoplifting “People who listen to pirated music wouldn’t buy the CDs anyway so the companies don’t lose anything”

Internet Piracy Eminem discovered that several tracks from his album had been put up for auction on eBay. He believed they unfinished songs were leaked by a close friend or business associate Singer & songwriter Jewel says she has no problem with Internet piracy – she says she makes enough money anyway “Swapping music on the Internet means artists who are unknown reach a wider audience”