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Ways to Protect Intellectual Property of the Companies


Taras Utiralov, lawyer at Ilyashev & Partners Law Firm

483 In the modern world with a widespread development and global distribution of IT technologies, intellectual property (either for individual companies or entire branches of economy) often has more value than the property in its traditional meaning – real estate, land, cars etc. Fortunately, many business owners (and probably owners of successful companies) have become aware of the mentioned fact and pay special attention to safety of their companies in the sphere of intellectual property. At the same time protection is required both from internal and external threats.

It is evident that companies in different spheres resort to different intellectual property protection strategies. Thus, the major part of companies (that do not practice creation of intellectual property objects as their principal activity and are engaged into sale of goods, provision of services not related to IT sphere, etc.) should focus their attention on protection of their own trademarks, commercial names, and, of course, commercial secret. The companies should periodically monitor the market in dealing with matters of protection of trademarks and commercial names (primarily in relation to principal competitors) in order to timely reveal (and, if possibly, prevent) violations and try to settle them under out-of-court (pre-court) procedures. Furthermore, the bigger is the company and the wider is the range of its goods/services, the more difficult  is to respond to unfair competition timely and the more desirable is to engage independent specialists (from law firms) to such processes. Law firms have a possibility to invite certain specialists for review of particular problems indicated by the client, while in-house lawyers have to simultaneously deal with many other routine matters and do not always have an opportunity to quickly respond to “abnormal situations”. When companies order development of logos, adverts and web-sites to certain independent contractors they must pay special attention to agreements concluded with such contractors (design-studios, advertizing agencies, etc.). In the process of fulfilling an order the latter may (deliberately or not) violate intellectual property rights of other persons and, as a result, “frame up” their client. That is why for the client it is important to make itself safe from such risks as early as at the stage of entry into a certain agreement.

When it comes to protection of commercial secret, a company, apart from resorting to non-legal protection measures (technical, organizational etc.), must enter into non-disclosure agreements with employees and third parties having access to such information, and such agreements should  stipulate sanctions for violation of information storage rules.

The companies engaged into creation of intellectual products (software, web-sites, advertisements, movies etc.) must pay particular attention to protection of intellectual property because violation of their rights means not only profit loss, but often loss of work results as such, and even as much as loss of their business in general. Accordingly, such companies must prioritize protection of their intellectual property from external and internal threats at the same level as creation of their own intellectual product. If in case of external threats, the same as in the process of protection of own trademarks, it is required to monitor possible violations and timely react to them, protection of intellectual property within the company requires another approach applied as early as at the preliminary stage of creating a certain product. It needs to be taken into consideration that intellectual products are created by people – authors, not the companies in general. In the first place intellectual property laws protect interests of the developer of the creative product. In practice, however, the developer often acts as the contractor and the client, who paid for creation of a certain product, must have a possibility to commercialize such product. That is why it is important to find an optimal balance between the interests of employers (clients) and employees (contractors). In order to balance the rights and interests of both parties of such relations it is necessary to prematurely choose an effective cooperation scheme  (within labor and civil relations) with certain individual persons – creators of works, as well as to select the most appropriate type of agreement allowing the client to use results of the contractor’s work as needed. Each possible form of cooperation has its advantages and disadvantages. For example, if a Labor Agreement can be regarded as more preferable in terms pf rights protection (held by the company-employer) for the work created by an employee of a certain company, a Civil Agreement on creation and disposal of an object of an intellectual property rights will protect the client from tax, labor and other related problems. Choice of an effective cooperation scheme is better to be discussed with a specialist in advance because the specialist may navigate the company through advantages and disadvantages of different forms in each particular case, as well as will help to draft sample agreements to be used as standard agreements in the future.

Obviously, it is difficult to talk about any universal remedy for protection of intellectual property of any company. Indeed, while for knowledge-intensive industries the key aspect is protection of inventions, for IT companies protection of intellectual property rights is important; and legal regimes of given objects of intellectual property rights have many differences. However, it is possible to single out one common rule: it is easier to prevent (or at least to minimize risks) violation of own rights, rather than defend them in the future.

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