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When dealing with clients, you are likely to be sharing intellectual property (IP). This occurs regardless of the market or industry you may work in. Naturally, you will want to be able to share your IP freely with your clients so that your business can expand and flourish. However, at the same time, you want to know that your IP is safe from being copied or exploited without your permission.  This article will step through four tips so that you can continue to work with clients while being confident that you have protected your IP. 

1. Identify Your IP

Firstly, when you are confident of your business’ own IP and its corresponding rights, you will be able to share your work with clients more freely. The first step to identifying your business IP is to understand it. There are many IP rights in New Zealand, namely:

  • trade mark;
  • patent; 
  • design;
  • copyright;
  • plant variety rights; and 
  • Māori IP.

It is a good idea to take time to figure out which of these your IP falls under before engaging with clients. Then, you will be able to build your IP rights and protect your IP correctly. 

Your business’ IP assets will exist before any client relationship, so knowing what they are and how they function is crucial for protection later on.

In any client agreement, you need to clarify what IP you retain ownership of throughout the relationship. Differentiate your existing IP and any new IP you may develop for the client as part of the relationship. 

2. Register IP Rights

Most IP rights are registrable with the Intellectual Property Office of New Zealand (IPONZ). You can apply to register IP assets with IPONZ to secure your rights and protections. IP rights grant you:

  • the exclusive use of your intellectual property;
  • rights to determine other use of your intellectual property; and 
  • legal protection.

Registration criteria vary, but the kinds of IP all require a degree of originality and uniqueness. As a result, if a client tries to steal your IP, it will be harder for them to do so if it is distinctive enough that they could not pass it off as their own.

Furthermore, some of these rights also provide you with the right to label your intellectual property. For example, you can label a registered trade mark with the ® symbol. When dealing with a client, be sure to use this ability so that they know what constitutes your IP.

In any contract with a client, lay out what registered protections you have, as well as inherent rights that may apply to your existing IP, such as copyright.

3. Licence According to Your Goals

Notably, you will need to balance your client’s wants with your own. For example, your client will likely want ownership rights over any new IP you develop for them. In most cases, the law will automatically grant them this ownership because they commissioned you to create something for them. However, if you want anything different, you need to negotiate this with your client in your contract.

A licence agreement allows an owner of intellectual property to permit others to use it without impacting their ownership rights. For example, you might use one with a client if you want to use each others’ existing IP. Crucially, you should set terms that let the client know what is appropriate behaviour with your IP, so that they do not damage your brand. You may also use one for clarifying any ongoing IP rights after your work ends. 

For example, if you are developing software for a client, you may wish to retain ownership of the copyrighted code for use in other projects. So that the client can still use the software you develop for them, you may grant them a licence to use and commercialise the overall programme. 

4. Protect Your Confidential IP

As part of your client relationship, you may share confidential IP with clients to complete what they have asked you to do. Sometimes you need to impart confidential information during the course of business, and you do not want the fear of exposure to stop you from expanding your business. 

For example, if a client pays your bakery to make a cake but wants to see the secret recipe you would use, that recipe is confidential IP that may qualify as a trade secret.

A trade secret is a legal way to guard any information or material valuable to your business. A trade secret not only expressly implies confidentiality but also enforces it. When dealing with a client, implement protections for your trade secrets. You can apply trade secrets to things like a: 

  • formula, 
  • process, 
  • method; or 
  • information. 

In your contract with a client, detail what relevant IP qualifies as a trade secret or confidential. This contract or clause must detail the confidentiality clearly so there can be no mistake between you and your client. If they breach confidentiality, then you can rely on contractual remedies to protect your IP interests.

Key Takeaways

You want to be confident when dealing with clients during the course of your business. Clearly identifying and protecting your background IP provides reassurance that you can prevent IP infringement. Additionally, when sharing IP with clients, you should consider licence agreements and confidentiality protections in contracts to set clear boundaries. If you need assistance with your IP, LegalVision’s IP lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 0800 005 570 or visit our membership page.

Frequently Asked Questions

What is an unregistered trade mark?

A trade mark that is not registered may still be enforceable and attract legal rights. To be considered valid, an unregistered trade mark needs to have a long-standing reputation in the market and be recognisable as your brand by consumers. 

What is intellectual property assignment?

An assignment is the transfer of intellectual property and ownership rights to another party.

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