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Protection of intellectual property as an important intangible asset of an IT company

Friday, December 4, 2020

Intellectual property is of great importance to IT companies today. Intellectual property rights are a valuable intangible asset, and often the backbone of a business. Veronika Sokolovskaya, attorney, head of the IP SBH Law Offices group (“Sysuev, Bondar and Partners” Law Firm), will tell you what needs to be done to preserve this asset.

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"Sysuev, Bondar and Partners" provides a full range of legal services both in the Republic of Belarus and in Ukraine. It specializes in various areas of commercial activity with a main focus on M&A, foreign investment, insurance, banking and finance, IT, intellectual property and construction.

You need to take a number of measures to preserve and protect the rights to intellectual property objects.

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1. All work on the creation of an intellectual property object must be recorded in writing

If the intellectual property object is created by the company’s employees, it is necessary to ensure that the work for hire is formalized in accordance with Belarusian legislation.

Timely execution of a written job assignment to an employee (working group) with a description of the assignment, as well as the provision of a report (act) stating the creation, minimize the risks in the event of a dispute on recognizing the created intellectual property object as a service work. It should be remembered that both the task and the report on the creation of a service work are addressed to specific employees, who, in turn, must read, understand and acknowledge them by signing.

If intellectual property objects are created by external contractors, all legal agreements between the parties must also be recorded in writing. As a rule, the parties conclude an agreement for the creation of an intellectual property object (for example, for the development of software.

We recommend that such an agreement includes the condition on further ownership (transfer) of rights to the created intellectual property object. This condition may consist in the complete transfer of all exclusive rights to the ordering company (assignment), or in granting the ordering company the rights to use the created objects (license). In any case, the fact of assignment of rights or granting of rights of use to the customer must be recorded in the act of acceptance of the transfer after the actual creation of the object.

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2. When concluding an agreement with a contractor, it is important to draw up a technical requirement correctly

Technical requirement is the basis of a software development contract and a means for describing and defining the tasks assigned to the developer. The quality of the content and design of the technical specification determines how soon the customer will receive the object in the desired form in which he wants.

A technical requirement that is written correctly should contain a detailed description of the object planned to be created. We recommend that it includes a timetable detailing the stages of software development.

You should understand that the technical requirement is the basis for the legitimate requirement of the customer for the developer to make adjustments and eliminate deficiencies at the expense of the latter in case of deviation from the criteria established in such a technical requirement. If the company does not have the competence in drawing up the technical specification, it is advisable to use the services of a specialist for this.

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3. It is important to preserve correspondence, e-mail correspondence and other materials that may contain information about the creation of an intellectual property object

In case of a dispute over being first to create and ownership of rights to intellectual property objects, one of the proofs that it was created by internal employees or by order of the company may be correspondence, articles, publications, presentations, internal assignments and reports, etc.

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Protection of intellectual property as an important intangible asset of an IT company

4. Registering software can be one of the ways to prove your rights to it

Since the software is an object of copyright, the code is protected by virtue of the fact of its creation (as a literary work) and is not subject to mandatory registration in order to establish a protection regime. Nevertheless, in order to avoid difficulties with proving the very fact of creation, you can deposit such software.

For reference. In the Republic of Belarus, you can deposit software at the National Center of Intellectual Property (NCIP).

It is important to understand that deposit by itself does not guarantee you 100% protection from abusive acts. However, it can serve as strong evidence in a dispute about authorship in relation to the software, confirming the fact that at a certain point in time the software belonged to a certain company.

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5. Timely registration of a brand as a trademark will save you from reputational losses and the cost of litigation with competitors

Companies often make a name for themselves with their brand — a name or logo that consumers and clients associate with a certain level of quality of goods or services. But such a brand is protected by the state only after registering it as a trademark. At the same time, registration is of a territorial nature — this means that a trademark is protected only for those classes of goods and services and only in the territory for which it is registered.

A trademark can be protected both as a result of national registration (in Belarus it is carried out by the NCIS), as well as on the basis of an international registration under the Madrid system.

Market participants often use the established reputation of their competitors and the fact that a brand that has become well-known is not protected by a trademark in bad faith, registering another company’s name or logo for itself.

In addition to the risk of losing its reputation and clients, the affected company will have to spend sufficient time and money to protect its rights in the Ministry of Antimonopoly Regulation and Trade, the Appeals Council under the NCIS, as well as in the Judicial Board for Intellectual Property of the Supreme Court.

Therefore, it is advisable to register with the NCIS the logo used as a trademark for the classes of goods and services of interest to the company from the very beginning of such use.

The registered trademark will also help to protect a domain name, since domains themselves are not protected as intellectual property objects under Belarusian law.

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6. Some intellectual property objects can be patented

If the company owns the rights to the original technical solution, software and hardware complex and design that meet the criteria established by legislation for objects of industrial property rights, such an intellectual property object can be protected by obtaining a patent for an invention, utility model, industrial design.

The above recommendations are largely aimed at preventing possible disputes, ensuring the protection of intellectual property and bringing the company on alert.

However, if the violation of the rights to the intellectual property object has already taken place, it is necessary to respond promptly by fixing such violations in ways that in the future may be accepted as appropriate evidence. This is usually followed by sending a claim to the infringer, filing an application with the antitrust, patent authority or court, depending on the type of violation and the chosen defense strategy.

 

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