The issue of intellectual property for small businesses is much more complicated in the online world than it is offline. The principles are essentially the same, but the methods of enforcing them change dramatically due to the size of the web, and the speed with which it operates.
What is IP?
“You’ve got two major areas of IP online,” explains Jeanette Jifkins, lawyer and publisher of LawForYourWebsite.com. “One is copyright, and the other is trademarks. Copyright protects your artistic and creative works. If you write an article, and that article is your original work, then it is protected by copyright.”
Trademarking is distinct from copyright, continues Jifkins, in that in order to register for one, you need to be able to demonstrate that the mark is intended to be used in the course of trade, and is something that you have developed.
First things first
Jenkins claims that this is what motivated her to create a resource for small businesses starting up online. The first problem that businesses encounter is that they don’t know what level of IP protection they need.
“They have a great idea and they want to go charging ahead with it, and they don’t think about there being any real legal issues with an online environment,” says Jenkins. “Online, the regulation is not in your face, it’s not obvious, so people think they can just set up at anything and run with it.”
This either results in businesses that are dangerously unconcerned about the security of their IP online, or those that take it much too seriously, with no grounding.
“There are people out there who are so concerned about putting information or products up, that they won’t do it until they’ve protected it,” says Jenkins. “They spend this massive amount of money, without actually thinking about their market, their income, their audience, any of those things, and a lot of the time they’ve spent a lot of money for nothing.”
Victor Ng, senior associate at Logie-Smith Lanyon, and publisher of law blog BuzzLaw encourages business owners to be very clear about what it is that’s valuable in their business.
“IP surveys or audits are a very good idea,” he suggests. An IP audit is a process that helps businesses identify what is intellectually valuable about their business. “If you do that, you know what you’ve got, what the value is, and what the risk profile of the IP is. You can tailor your online activities accordingly,” says Ng.
If you’re uncertain of what your valuable IP is, the Australian government’s IP toolkit offers a comprehensive guide on conducting IP audits.
What damage can be done?
Exactly the same kind of damage that ‘real-world’ IP infringement can have on your business can happen online.
“The obvious one is the loss of goodwill,” says Buzz Law’s Ng. “For example, if you’ve got a brand that’s promoted online, and that starts being copied, people aren’t quite sure who’s the real deal.”
How IP infringement might damage a business also depends on the activities that the business is carrying out online.
“The very basic ones are websites being copied, information being copied and trademarks being misused,” says Ng. “You also get the issue of domain names being misappropriated; similar sounding domain names being taken to try and divert traffic from the actual business owner’s own website.”
“The very act of having a website up, or web application, means people may be able to reverse engineer or get the source code that they might use for their own business,” he continues. “There’s any number of ways that IP can be infringed online. In effect, it’s no different to offline infringement other than that with the internet these days things can happen much quicker.”
Jenkins recalls a particularly unfortunate case of IP infringement in which one website’s content was entirely pilfered by another.
“Somebody had their copyright – the contents of their website – basically lifted and copied almost in total. Then, the person who copied it all went and sought trademark and copyright protection, got it registered, and then sued the first person for theft and breach of copyright,” she explains.
Because the initial company hadn’t taken any action to protect their interests in the first place, and because they then didn’t have the money to pursue the dispute afterward, they ended up losing all their intellectual property.
What can you do?
There is no absolute, globally binding way to secure your IP. Trademarks and copyright tend to be established and policed by country, and what holds legal water in one country might not in another.
One of the most effective measures in protecting your IP is to accumulate evidence that you’ve sought to secure it as your own. This creates a backlog of official documentation relating to your IP that could prove a useful tool should court cases arise.
“You need ways in which you can show how you came up with the idea, what your intentions in starting to use it are, and the plan you have to protect it moving forward,” says Jenkins.
In Australia, content is automatically protected by copyright as soon as it is published, regardless of whether it is accompanied by a copyright notice. It’s a different story with international copyright.
“If you’re going to use an international market, particularly the US market, then to protect your copyright, the best thing to do is to register it with the federal trade commission in the US,” says Jenkins. “It’s a fairly straightforward process, you can do it all online, it doesn’t cost a lot of money, and it’s the easiest way to protect your copyright in the world’s biggest market.”
Jenkins concludes that businesses seeking to protect their IP should always start with the basic components of what’s valuable in their business, and work upwards from there.
“What is the most valuable information and marks that you have in your business? Where’s the value sitting in your business?” she asks. “Protect that first. If the value is in the copyright that you’ve put up there, and your market is the US, then you go out and register your copyright with the US registrar. Even though that is not a register that’s available for enforcement in Australia, it gives you evidence that you’ve gone and taken a step, you’ve intended to protect your copyright, you’ve done it in a US market, so it’s persuasive in an Australian court.”
“So it’s the evidence that you’ve taken steps to try and secure it that’s the most important thing because it shows you had it first,” she concludes. “The thing about courts is, it’s whoever puts forward the best argument, and it’s easier to put forward a good argument if you’ve got independent documentation to support that argument. That’s one of the ways of doing it and doing it officially.