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Intellectual Property in E-Commerce for Small
Business
The Internet has irrevocably
altered many of the most fundamental ways of doing business, and the
murky waters of intellectual property are no exception.
Small and medium-sized enterprises (SMEs) have always found this to be a
tricky area and one where expert professional advice is essential.
To assist companies in finding their way through this labyrinth, the
World Intellectual Property Organization (WIPO) has produced a 10-point
checklist for e-commerce intellectual property.
Intellectual property is a legal term, and refers to such things as
patents, copyright, trademarks, formats for television programs,
computer software and new ideas. In many instances these are the essence
of a company's business.
For example, the mass pirating of CDs can severely impact a record
company's livelihood. For SMEs, the theft of its intellectual property
could even lead to the company's collapse.
E-commerce is closely linked to intellectual property for two reasons.
Firstly, because the Internet is a great distribution system for
intellectual property - as evidenced by the sharing of music on Napster
- and secondly, because intellectual property - in the form of software,
etc - is what enables the Internet to function.
The first step in protecting intellectual property is to conduct an
intellectual property audit, which starts by making a list of all the
company's intellectual property, including trade secrets.
A lawyer should then be used to establish the best ways of protecting,
exploiting and enhancing the intellectual property's value. Intellectual
property is a specialized field of law, and some law firms specialize in
it almost exclusively.
The audit should also include any patents held. Their e-commerce
importance lies in the fact that they are at the heart of licensing out,
contracting out, outsourcing and strategic relationships.
A company's website is obviously one of those areas where the worlds of
e-commerce and intellectual property collide.
Steps must be taken to ensure that not only are a company's intellectual
property assets secured but also that the website is not infringing
anyone else's intellectual property rights, for example through the use
or distribution of copyrighted material.
It is also important that a company's domain name itself is protected
from unauthorized use by someone else, and the easiest way to do this is
to ensure it is distinctive enough to be protected under trademark law.
Use of the Internet can also lead to unintentional disclosures, which
can harm or even destroy intellectual property rights.
This is because the law in many countries does not grant patent
protection if an invention has been publicly disclosed for even a short
period of time before the patent application has been filed.
Another risk area is the signing of contracts - all of them must be
reviewed to ensure that intellectual property assets are being maximized
and not damaged.
This applies particularly to contracts signed with government and
educational institutions, because often the work produced could be owned
to some extent by the government or educational body providing funds.
Of course, one of the greatest problem areas when it comes to the
Internet and any legal issue is that of jurisdiction. Witness the
problems recently faced by a large auction site when its French
customers were able to buy Nazi paraphernalia banned in France.
One solution is to use international arbitration, although this is
generally voluntary. If arbitration clauses are agreed to in contracts,
the parties are required to use arbitration.
SMEs are already snowed under by a blizzard of rules, regulations
requirements, and may not feel like considering the intricate area of
intellectual property. However, the Internet has now made dealing with
this issue more vital than ever.
It is highly recommended that any director of a smaller company take the
time to at least do the WIPO website's self test.
It is also very important to realize that in this case, as in many other
areas, professional advice is of the utmost importance.
The
WIPO's website has links to many other
useful sites.
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