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Intellectual property (IP) is an important asset that brings value to your business, especially if you rely on the uniqueness or distinctiveness of your products. Therefore, you need to ensure you protect it sufficiently and within your means. If you outsource your product manufacturing, you will likely engage a manufacturer. This relationship can raise various implications for your IP. Therefore, you need to take steps to ensure your manufacturer (or their employees) can operate within the rules of your IP rights. For some guidance, this article will explain how you can protect your IP in New Zealand when engaging a manufacturer.

What Kind of IP Are You Protecting?

Firstly, the kind of protection you need to apply for will depend on what kind of IP you want to protect. There are many different kinds of IP. The table below sets out the various kinds you can protect.

Copyright

An inherent IP right that starts from creation in literary, artistic, and other works. Usually, the author or creator owns this right.

Designs

A registered IP right that protects the visual appearance (such as the shape or pattern) of an object or article.

Trade Marks

An IP right that protects a symbol or sign representing your business, such as its logo or name. Can be registered or unregistered.

Patents

A registered IP right for new inventions that stops others from selling them.

Trade Secrets

Confidential information essential to your trade, such as recipes or processes.

Plant Variety Rights

A registered IP right for new plant varieties.

Geographical Indications

A registered IP right that applies to a certain region and qualities linked to that region, such as wine from a specific area of the country.

Some kinds of IP have inherent rights that the law gives, which you can use to protect them. Examples include copyright or unregistered trade marks. However, there are usually strict requirements you need to meet to qualify for these protections in legal proceedings. 

On top of this, you can protect other kinds of IP by applying to register your exclusive right to use that property.

Registering IP Rights

If you are planning to engage a manufacturer, one way you can protect your IP is to register it. To do this, you must follow the application procedures for your intended IP right and send your application to the Intellectual Property Office of New Zealand (IPONZ). For example, if you are outsourcing mass product manufacturing to a third party manufacturer, registering a trade mark, design, or patent could be a way to protect your IP.

If you meet IPONZ’s criteria for your particular IP, they grant you the exclusive right to use and sell that property. If someone tries to do so without your authorisation, they are infringing on your IP rights. You can pursue them in court for this, with various civil remedies available.

In any kind of legal proceedings involving IP, evidence and proof of ownership are usually key issues. It is much easier to prove your ownership if you have a registered IP right.

When you have a registered IP right, you can grant your manufacturer permission to use your IP with a licensing agreement. They have your consent to produce your goods that use your IP, as long as it aligns with your specifications in the licence you give them. If they operate outside of this contract, you will also have contractual remedies available to you.

Effective Contractual Agreements

However, there are some kinds of IP that you cannot register, such as trade secrets and other kinds of confidential information. Therefore, you need to ensure you have favourable contracts with your manufacturer to protect your IP.

In your manufacturing agreement, you should have provisions detailing how you expect them to deal with your IP. These clauses would include:

  • establishing that you still own your IP;
  • details of any licences you grant to the manufacturer relating to your IP;
  • the exact nature and description of your IP;
  • how they should talk about your IP with third parties; and
  • what happens if they breach any IP-related provisions.

You should also ensure you include confidentiality clauses in your agreement or get your manufacturer to sign a non-disclosure agreement (NDA). When they do so, they agree to not share your confidential IP with third parties and any other disclosure restrictions you require. Share this information with as few people as possible for better IP protection.

For example, you may share your unique recipe for your novelty soaps with a manufacturer. To protect this IP, you would have your manufacturer sign an NDA promising not to share its details with other parties.

Before you sign a contract with a manufacturer, do your research about their business dealings and past usage of others’ IP. If there is evidence of any past IP infringement, do not use that manufacturer to produce your goods.

Key Takeaways

If you want to engage a manufacturer to produce your goods, you should protect your IP by registering it or having appropriate confidentiality agreements. If you would like more information or help with your IP protection, contact LegalVision’s IP lawyers on 0800 005 570 or fill out the form on this page.

Frequently Asked Questions

Should I register my IP?

Your IP is a valuable business asset, and you can protect it by registering it. However, this can be expensive. Consider how a third party using your IP without your consent would impact your business, and whether you can withstand it. Depending on this, IP protection may then be vital for your business.

What is an NDA?

NDA stands for a non-disclosure agreement. This is also a confidentiality agreement. You share confidential information with another party, and they agree not to share it or only share it in the circumstances you prescribe.

How can I protect my IP when engaging a manufacturer?

Registering your IP clearly establishes that you are its owner and that a manufacturer is infringing upon it if they do not use it within your specifications. You should also address IP in your manufacturer’s agreement.

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