Right on – protecting packaging designs
Companies are not maximising the potential of their designs in terms of licensing rights. Francesca Fellowes, solicitor at Hammonds LLP, Leeds, UK, explains how additional revenue can be generated by licensing rights.
Packaging designs and their individual elements can be protected by different intellectual property rights (IPRs) such as copyright, unregistered design rights, registered designs and patents. Those rights can be licensed to third parties in order to generate additional revenue. The terms of a license are sufficiently flexible to allow a right to be licensed to more than one third party for the same or different applications while still enabling the rights owner to continue their existing use of the design.
Often the owners of valuable IPRs fail to exploit them to their true value, either because they are unaware that the rights exist or they do not know how to exploit them. As real property can be sold or rented out to increase revenue, an IPR can be sold or, if the owner wishes to retain ownership can be licensed to third parties. The difference is that the owner of an IPR may be able to continue their existing use of the right, while also licensing it out for use in a different area.
The flexibility in the terms of a licence (such as a license to use a registered design), mean that a license can be granted in one or more territories and be restricted to one or more applications. A licence can be ‘sole’, which means that the right may only be exploited by the rights’ owner and the licensee. It can be ‘exclusive’ which means that the right granted can only be exploited by the licensee or it can be ‘non-exclusive’. A non-exclusive license does not stop the rights owner from granting the same rights to another licensee.
The licensing carried out by certain major brands shows how this can work. High profile examples include the licensing of Paddington Bear to Unilever UK for its ‘Love it, or hate it’ Marmite adverts and in turn, the licensing of the Marmite brand to Walkers for its Marmite crisps. The success of the Walkers licensing deal has led to Unilever UK creating its own Marmite snack range. The same model applies to the more functional and less marketing-led aspects of packaging design.
The most successful brands adopt a pro-active licensing strategy, which involves seeking out appropriate opportunities rather than waiting for them to be presented. This can be applied to the licensing of all types of IPRs and can ensure that the licence deals are those most likely to increase the value of the rights and generate the most income.
Copyright arises automatically upon creation of original work. There are no forms to fill in or filing fees to pay. Copyright can exist in a design document that details a packaging design, as an artistic work.
To be protected by copyright, the work must be original and not copied. Protection with copyright for an artistic work lasts for 70 years from the end of the year in which the author of the work dies. However, it is not a monopoly right. It protects the work from being directly copied, but there is no infringement if an identical work is created independently.
A copyright work can be marked with the © symbol, the name of the copyright owner and the year in which the work was created. It is not necessary to do this in order to obtain protection, however, it ensures that third parties know that the work is copyrighted. They will also know who to approach if they want permission to use it.
Unregistered design right
United Kingdom unregistered design right also arises automatically. It protects the 3D aspects of a design, such as its shape and configuration (internal and external) but not the 2D elements, such as patterns. Again, the design must be original and must not be commonplace in the field. Design rights last for 10 years from the first marketing of products using the design or 15 years from the creation, whichever is earlier.
Like copyright, design right is not a monopoly right. Proof that the design has been directly copied must be obtained in order to enforce it. Therefore, it is worth keeping evidence of when the design was first recorded and the first marketing of products made using it.
A design can also be protected by the unregistered community design right. This protects the overall appearance of the design and is a monopoly right, which extends throughout the EU. However, it only lasts for three years from the date that the design was first made available to the public.
By contrast with the above rights, registered design protection does not arise automatically. An application for registration must be filed with the Intellectual Property Office, with costs of just £60 for a single design. Registered design protection can last for a maximum of 25 years although it needs to be renewed every five years.
A key advantage of registering a design is that it creates a monopoly right and there is no need to prove direct copying in order to enforce it. It also serves to publicly announce that the design is protected through a register that is accessible to all. This can warn third parties off using a protected design or may invite interested parties to seek permission to use it.
A design registration protects the overall appearance of a product and the visual features that form the design. These may include packaging, patterns, character images, logos and software icons. A design can be registered in the UK only, or an application can be made for a Registered Community Design, at the Office for Harmonisation in the Internal Market based in Alicante, Spain.
A patent protects new inventions, rather than the purely aesthetic aspects of a design. It may cover how an element of a design works, what it is made of and how it is made. Patents last for a maximum of 20 years if they are renewed every five years. A patent prevents a third party from making, using, importing or selling the invention without the rights owner’s permission.
The key when licensing any of the above rights is to choose licensees with care and ensure that they sign up to a Licence Agreement, which contains appropriate provisions to protect the licensor. Try to avoid tying up rights for long periods of time in a deal which may produce limited revenue.
Further Information: Hammonds LLP