Why are you using my Intellectual Property?

I am sure you know that DiaMatrix specializes in the development and hosting of websites. We have been doing this for several years for ourselves and our clients. A couple of weeks ago I met with a client to develop a new website for them. The client brought along their lawyer, who is an Intellectual Property ("IP") specialist, to the meeting to make sure that we understood the ramifications and legal issues of the website that we were to develop. I was totally blown away by what I heard.

The meeting went on for a few hours with most of the time being spent on general discussions regarding IP and not the client's planned website. To cut a long story short, I was amazed at some of the things one can do to protect one's information. I also realized that most small and medium size businesses are probably not even aware of what they need to do to protect their Intellectual Property.

Disclaimer: I am not a lawyer however, after sitting down with the IP lawyer above, I thought it may be useful to share some of the discussions with you in my newsletter. No information in this newsletter is intended to be given as legal advice, it is rather meant to be "food for thought".

A case scenario is the best example, so here goes:
Most small businesses register either a company or a close corporation, being the vehicle through which the operations are run. They then setup a website and other promotional printed material to start with. A considerable expense may have been incurred by this point and further time, effort and financial resources are then invested into the running, development and promotion of the business.

A week/a month/a year may go by when the business receives a letter of demand advising that it is infringing the rights of a third party. You, as the business owner have no idea about the party who is stating that you are using their IP. You are amazed by this as you believed that you are the rightful owner of the IP. You have however never registered any trademarks etc. They have and you are now infringing their rights. The infringement can be anything from using a similar company name, trading name, brand name/s or domain name. You can be threatened with trade mark infringement and about 10 other infringements that will scare the living daylights out of you!

The law firm that is acting on behalf of the infringed party is threatening to seek an interdict against you and an adverse costs order for the third party's legal costs. Furthermore, they are threatening a damages order against you - it is quite possible that you do not even understand these charges. Apart from the high cost of legal counsel, the substantial investment made in respect of branding, product packaging, promotional material, website design and the like, all could be lost in the event that you lose and the other party wins.

I asked how the above scenario can be avoided, to pass onto you, my faithful readers. The answer I was given was simple and inexpensive. Once a brand name and related company name has been selected, a trade mark attorney who specialises in the registration and enforcement of IP rights should be consulted to conduct a clearance/register availability search. This will determine whether your chosen brand name is available for use and registration in South Africa without being subject to the threat of stronger rights holders. I was informed that such a search costs less than R2 000.

Should your chosen brand name be available, it is imperative to secure your own rights to the name through its registration as a trade mark on the Trade Marks Office register in Pretoria. The registration of a trade mark costs less than R3 000. Both the search and the application to register a trade mark require the specialist expertise of a trade mark attorney.

The downside is that, should you not register your chosen brand name as a trade mark and a third party competitor subsequently makes unauthorised use of your brand name (not yet registered trade mark), or of a similar brand name, the legal costs involved in stopping them are substantially higher than if you had registered your brand name as a trademark in the first place.

After covering IP issues we started on E-Commerce websites and had a look at some high profile websites. Some had NO Terms and Conditions whilst others had such BASIC Terms and Conditions that would prove to be ineffective from a legal point of view.

I discussed the IP issue and other legal jargon issues on websites with four of my other clients and they all requested assistance in this area - just like most of us, they were unaware of these issues. I referred them to the IP specialist lawyer that I had the privilege of meeting and she was able to help them. If you are in this situation and need some assistance, pop me an email and I will forward her details on to you. For the record, I am not getting a kick-back from her. I am merely trying to assist you.

I hope this newsletter has provided you with some "food for thought".