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When you register a design for a new product with the Intellectual Property Office of New Zealand (IPONZ), you get intellectual property (IP) rights protecting its visual appearance. If particular products bring value to your business, you should consider whether getting design protection rights would be useful. This fact becomes relevant if you engage a manufacturer to produce your goods, which is helpful if you do not have the facilities to do it yourself. However, you want to reduce the risk of a manufacturer copying your unique designs, which entails implementing protection processes in your contracts together, among other things. For some guidance, this article will provide five tips to prevent your manufacturers from stealing your designs in New Zealand.

1. Register Your Designs Before Sharing Them With Manufacturers

Registering your design with IPONZ gives you various IP rights, and you are the only one with the exclusive right to sell, manufacture, or import goods using your design. However, the success of your design registration application with IPONZ will depend on a variety of factors, and one of those is your compliance with their application requirements. As part of your application, your design needs to be novel. A novel design is something that does not already exist in the market or that someone else has sold before.

Taking note of this is important for two reasons:

  • you need to research to make sure your original design does not already exist; and
  • if someone else steals your original designs and sells goods using them, you will not be able to register them for your own use.

Therefore, before engaging a manufacturer, it is best to register your design with IPONZ. That way, you can reduce the risk of someone else using your design before you have established IP ownership rights. If they do, you can take legal action.

Make sure that you understand that registered design rights only protect the visual appearance of your goods. You cannot register designs for goods that are purely functional in nature. Notably, you may have additional protections under copyright law for original work.

2. Research Your Manufacturers Before You Sign a Contract

Before choosing a manufacturer to make your products, conduct thorough research around their policies and practices. Look at the testimonials of other businesses that have engaged with them in the past and pay particular attention to how they handled IP matters. Find a manufacturer whose IP policies match your own goals, and you may find a partner that is willing to meet your terms. Doing due diligence before signing a contract is a key step for ensuring you engage with a trustworthy partner.

3. Draft Comprehensive Confidentiality Clauses

In some cases, you may not be able to register your design before you need to engage a manufacturer to create your products. At these times, strong confidentiality and non-disclosure obligations are essential. Even after you have registered your designs, confidentiality agreements are necessary to protect your important business know-how and trade secrets.

For example, if your distinctive mugs require a new and unique sculpting technique, you want to protect that sculpting technique when your manufacturing company produces your goods. Confidentiality clauses bind them to secrecy, and you can take legal action if they breach your trust.

Try to share confidential or sensitive IP information with as few people as possible within the manufacturing company. Additionally, make sure that your confidentiality requirements also extend to the manufacturer’s employees where appropriate.

4. Seek Legal Advice for Your Licence Terms

You likely will need to grant your manufacturer a licence to produce goods with your distinct design, which you can do with a licence agreement or clause in your overall contract. However, this can be a complex task, especially if you have not dealt with this area before. Therefore, it is vital that you seek legal advice to draft a licence with terms that suit your business. These terms may include:

  • geographical limits;
  • permitted or prohibited conduct;
  • exclusivity rules;
  • performance requirements; or
  • time limits.

An experienced IP lawyer can help you translate your IP goals into a binding legal agreement that imposes serious consequences on a manufacturer that attempts to steal your designs.

5. Register Overseas if Your Manufacturer is Not in New Zealand

When you register your design with IPONZ, it only provides IP rights and protections that apply in New Zealand. Therefore, if your manufacturing company is in another country, you should apply for IP protections within that country. Otherwise, if they attempt to copy or steal your designs, you may not have legal options or pathways available to you.

For example, if your manufacturer is in China, you should register for IP protections in China.

If you apply for a design registration in another country within six months of doing the same in New Zealand, you can backdate it to have the same priority date as your New Zealand application. This fact is important for determining when your IP rights started applying to your particular design.

Key Takeaways

Your designs for your unique products are critical IP, and you need to protect them appropriately against third-party copying. Therefore, when you engage a manufacturer to develop your products, make sure you have appropriate IP protection measures in place. If you would like more information or help with managing your IP in a manufacturing relationship, contact LegalVision’s IP lawyers on 0800 005 570 or fill out the form on this page.

Frequently Asked Questions

What is a design?

In New Zealand, a design refers to a registrable intellectual property right that protects the distinctive visual appearance of an item. This right does not apply to the item itself or an item that has a purely functional design.

What intellectual property concerns should I cover in a manufacturing agreement?

What exactly you will need to cover will depend on your specific situation. First, you should clearly identify who the owners of various kinds of intellectual property are, including any new intellectual property your partnership may create.

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