Transferring, licensing and franchising IP assets

By: Novizal Kristianto

There are differences between transferring, licensing and franchising intellectual property rights (copyrights, trademark, industrial design, patent, layout design of Integrated Circuit and trade secret) from one party to another.

Although it is commonly mentioned however the difference is not precisely clear from one to another. The following is short explanation on the difference of those actions:

A. Transferring

Transferring intellectual property rights means transfer of the intellectual property rights of a work/product from the creator/designer/author or the holder of the right (“the Current Holder”) to other party which resulted that the Current Holder lost his right over the transferred intellectual property work/product.

Most of the intellectual property laws and regulations provide that transfer of intellectual property rights can be done by inheritance, testament, donation, mutual agreement (sale and purchase) or other reason recognized by law and the transfer shall be registered at the relevant intellectual property office.

B. Licensing

Licensing intellectual property rights means the Current Holder give a permission to other party in whole or in part to use/exploit/copy/disclose the work/product. With licensing, the Current Holder does not lost his right over the work/product. The Current Holder can use/exploit/copy/disclose the work/product for his own benefit.

The procedure, terms and condition of licensing is stipulated in each intellectual property law and it is also shall be registered at the relevant intellectual property office.

C. Franchising

Franchise means licensing the intellectual property rights including the trademark and the business system and material or the other commercial matters from the Current Holder to other party. The business system including marketing system, operational system, training system, customer service system, accounting system, etc.

There are two system of franchising, i.e. Product and Trade Name Franchise (PTNF) and Business Format Franchise (BFF).

PTNF is franchising that gives the franchisee right to produce the product of franchisor and using the trademark of franchisor. How the product being produce and the trademark being used is commonly not regulated.

BFF is franchising that duplicating the whole business of the franchisor. All business system and material shall be identical with the franchisor. The use of trademark and other commercial matter are also regulated in detail.

Intellectual Property Rights in a Glance

By Novizal Kristianto

Can you tell the difference between a trademark and a patent? Do you know that your company name or product name can be registered as trademark? Are you familiar with “industrial design” words?

If you cannot answer those questions instantly (without looking for a reference) and you are in a managerial position or a private entrepreneur, this is a MUST READ article to broaden your knowledge. Our explanation will not in a “legal sentence” but shall give a clear description to the subject matter.

Let’s begin the “journey”:

1. Copyright

What is Copyright?

Copyright is an exclusive right to publish or reproduce or to grant permission to publish or reproduce a work in the field of science, arts and literature.

Who can be given such right?

Copyright is given automatically to Creator of a work or the recipient of Copyright (people who received the transfer of the Copyright from the Creator or previous recipient).

What kind of work is protected by Copyright?

Among others are:

1. books, computer programs, pamphlets, typographical arrangements of published works, and all other written works;
2. sermons, lecturers, addresses and other works of utterance;
3. visual aid made for educational and scientific purposes;
4. songs or music with or without lyrics;
5. dramas, musical dramas, dances, choreographic works, puppet shows, pantomimes;
6. all forms of art, such as painting drawing etc;
7. architecture;
8. maps;
9. batik art;
10. photography;
11. cinematographic work;
12. translations, interpretations, adaptations, anthologies, database and other works as a result of changing form or mode.

How can we obtain Copyright for the work?

Generally, Copyright emerges when the creation is created (provision does not apply to some conditions), therefore registration is not required.

However, on some extend, the registration of your work is important, since by registering your work/creation, the Copyright certificate is the only evidence you need to prove your right.

On the other hand, if you choose not registering your work/creation, you must keep your evidence of your creation. These evidences can be record, notes, or any written documentation, witnesses which may still be rejected by the court.

How long is the protection of Copyright?

It is vary, depending on the type of the work, “form” of the creator and who is the recipient or executor of the work.

2. Mark (trademark and service mark)

What is a Mark?

Mark is:

• a sign in the form of picture, name, word, letters, numerical, composition of colors, or a combination of said elements;
• which has a distinguish features;
• and used in trade activities.

Example:

1. company name or company logo;
2. product name or product logo;
3. symbols or signs of the service, etc.

What is “the right” of a Mark?

It is an exclusive right to use or to grant permission to use of a mark to other party.

Note: Mark is divided into trademark for trading of goods and service mark for providing services. Both are similar and ruled by the same laws and regulations.

Who can be given such right?

The right is given to the holder of the registered trademark/service mark or recipient who received the right of trademark/service mark.

How can we obtain the right of trademark/service mark?

The right of trademark/service mark can only be obtained by registering the mark to the trademark/service mark office, i.e. Directorate General of Intellectual Property of Republic of Indonesia.

How long is the protection of trademark/service mark?

10 years and can be renewed as needed.

3. Industrial Design

What is a Industrial Design?

Industrial Design is:

• a creation on the shape, configuration or the composition of lines or colors, or lines and colors, or its combination;
• in a three or two dimensional form;
• which gives aesthetic impression; and
• can be realized in a three or two dimensional pattern; and
• used to produce a product, goods or an industrial commodity and a handy craft.

Example:

1. drinking bottle shape or drinking packaging shape including he drawings attached to the bottle/packaging;
2. table and chair designs;
3. furniture accessories (tissue box, candy storage), etc

What is “the right” of a Industrial Design?

It is an exclusive right to exploit or to grant permission to exploit of a design to other party.

Who can be given such right?

The right is given to the designer of the registered industrial design or recipient who received the right of Industrial Design.

How can we obtain the right of Industrial Design?

The right of Industrial Design can only be obtained by registering the design to the Industrial Design office, i.e. Directorate General of Intellectual Property of Republic of Indonesia.

How long is the protection of Industrial Design?

10 years and can be renewed as needed.

4. Patent

What is Patent?

It is an exclusive right to exploit or to authorize to exploit of an invention to other party.

What is “invention”?

Invention is:

• idea that is poured;
• in any activity of solving a specific problems;
• in the field of technology, either in the form of product or process or an improvement and development of product or process.

Example:

1. water dispenser product;
2. hybrid cars;
3. waste water treatment process, etc

Who can be given such right?

The right is given to the holder of the registered Patent or recipient who received the right of Patent.

How can we obtain the right of a Patent?

The right of Patent can only be obtained by registering the invention to the patent office, i.e. Directorate General of Intellectual Property of Republic of Indonesia.

How long is the protection of a Patent?

20 years and cannot be extended.

5. Trade Secret

What is Trade Secret?

Trade Secret is:

• information;
• in a field of technology and/or business;
• that is not known by the public;
• has economic values; and
• useful in business activities; and
• the confidentiality is maintained by the owner.

Example:

1. recipe/formula of food or beverages;
2. customer/supplier database;
3. internal information of a company, etc.

What is “the right” of a Trade Secret?

It is a right to use or to grant license or prohibit using or disclose of trade secret to other party.

Who can be given such right?

The right is automatically emerge and exist when the information is kept in private, still has economic values, can be useful for business activities and the maintained the confidentiality by the owner.

How can we obtain the right of Trade Secret?

There is no registration required.

How long is the protection of Trade Secret?

The protection of the right of Trade Secret shall remain when the information is still kept as “trade secret”.

CAN A SIMPLE INVENTION BE PATENTED? WHY NOT..!!

by W. Yogi Widodo

Should a patent be something related only to hi-tech and very complicated inventions?

To answer this question, please remember that the basic principle of patentability of an invention is to consider its novelty, inventive steps and industrial applicability.

As we are aware technology has developed rapidly, therefore there are only few patented inventions are still novel (except in the fields of bio-technology and bio-genetics). Recently, most patents have only covered the inventive step and the industrial applicability.

Note that the inventive step of an invention means that other people have invented it before (so called prior arts), but the new inventor did some modifications or developments on it so that the new invention is able to solve the problems that cannot be solved by the prior arts. And it can be a very simple invention..!

For an example showing that the inventive step does not need to be hi-tech and complicated, here we will look at US Patent No. 6,415,530 to H. Kevin Coplon (Indonesian), entitled “Method, system and shoe enabling the determination of fit from outside of the shoe”.

Many types of shoes are already well known. Some known shoes provide means for determining whether they fit. However, none of the prior art provides a way to determine whether a shoe will fit from outside the shoe. For example, a person may be in a hurry and not want to take the time to try on a shoe. Also, room to try on a shoe may not be available where the shoe is sold. Also, a shoe may be sold where there is insufficient experienced staff to help a person choose the correct size. In addition, a person buying a shoe for a child may not be able to determine the room within the shoe for growth of a child's foot.

For example, U.S. Patent No. 5,014,041 to Rosen and U.S. Patent No. 5,084,988 to Berger disclose shoes that have transparent soles through to the interior of the shoe to show when a foot has outgrowing a shoe. These patents require that a person wear the shoe before being able to determine whether they fit. Additionally, Rosen and Berger suffer from the fact that over time the transparent soles may discolour and get scuffs so that a person could not look through them.

The uses of removable insoles or socks with printed length areas which are removable from the inside of the shoe are known in the industry. In addition, U.S. Patent No. 2,464,571 to Gardner discloses a removable shoe-fit indicator which indicates the fit of the shoe on the child on an insole. To use the Gardner indicator, a person must put colouring on the removable indicator which will colour a child's toes or socks to indicate the fit of the shoe. The interior piece would make the process of making the shoe more expensive, and would impact upon the comfort of the shoe. The use of colouring makes Gardner messy and inconvenient.

Patterns on the outsole of a shoe are also known. U.S. Patent No. 4,266,349 to Schmohl discloses a profile pattern on a sole that has a plurality of concentric circles. The profile pattern in Schmohl is irrelevant to the issue of fit; it used for the absorption and transfer of the forces acting upon the sole.

None of the devices in the above references solve the problem of determining whether a shoe will fit a person's foot without the person trying on the shoe. Furthermore, none of the devices solve the problem of determining the room for growth that a shoe may have without trying on the shoe. Each of the prior art references above require a person to try on a shoe at least once.

From the above illustration and brief description of related arts, we find that the principal object of this invention is to provide a shoe wherein a person can determine whether a shoe fits without trying it on. This invention is a system including a shoe or a shoe with an outsole having a reference gauge at the proximal end of the outsole for placing the heel of the foot; and a first reference mark at the distal end of the outsole corresponding to where the toes of the foot should extend when the heel is placed on the reference gauge to ensure a proper fit of the shoe on the foot.

Now we can conclude that a simple invention can be patented also. And furthermore, a patent need not be related to a hi-tech and very complicated invention. So, let’s invent and get your inventions patented..!

The Development of Intellectual Property Consultant

Author: Emil Miraj

Editor: Novizal Kristianto

Since the issuance of Government Regulations No.2 of 2005 on the provisions of requirements and existence of Intellectual Property Consultant, there are 255 people who has been officially inaugurated by the Minister of Law and Human Rights (“Minister”) as registered Intellectual Property Consultant (“IP Consultant”). IP Consultant is a consultant of intellectual property rights who has given the authority by the Minister to represent an applicant filing their intellectual property at Directorate General of Intellectual Property (intellectual property office/“DGIP”).

IP Consultant has their role as intermediary between the applicants/public with DGIP to ensure the required documents have been satisfied and the applicant follows the necessary procedure. In short, IP Consultant has to assist and provide advice the applicants in relation to the intellectual property protection, procedures, enforcement and solutions for any administrative and legal aspect of each of intellectual property.

Other than the above, the IP Consultants are require to (1) up-hold the law on the infringement of the intellectual property; (2) socialize the intellectual property protection, system and its development to the public, and (3) let other countries know and give a real proof on the intellectual property protection and enforcement.

In order to optimize the IP Consultant performance, an IP Consultant shall have comprehensive knowledge and skill on the administrations, legal, technical, and economics of the intellectual property issues.

Administration knowledge and skills are needed in relation to assure the required documentation has been prepared, filing procedure has been followed, recording, archiving and managing the intellectual property rights documentations to be easily retrieved and/or marked for renewal. Legal knowledge and skills are important to provide legal advice and opinion, opposition and litigation or law enforcement. While, technical skills shall become very important skill for design industry and patent matters.

Therefore, a good IP consultant shall have the following criteria:

1. Intellectual Property Knowledge

Intellectual Property Knowledge is the basic of every actions performed as IP Consultant. She/he should be able to answer your simple questions with the right answer, whether followed by having analogy thinking or provide you with examples. The right answer shall not always in a “law” sentence, but you shall understand it.

2. Intellectual Property Experience

Even though an IP Consultant is the master of intellectual property theory, it should not make her/him as the best IP Consultant. Experiences in handling problematic filings, good relationship with the DGIP officials, know the steps to be taken for each problem arisen would make her/him worth as IP Consultant. The worst case, at least she/he has the precedence to hold on.

3. Responsive and problem solver

You should quit hiring a stubborn and non-responsive consultant. It is important to have a consultant to hear to what you think or what you want, although she/he shall not be obliged to do it. She/he shall give you a better understanding and guide you with better solution. A good consultant will give several alternatives solutions for you to decide, or if there is only one solution, she/he will tell you the risk to be borne.

4. Reasonable fee

It is unfair if we look for the cheapest fee to pay and seek for the best quality in result. You must understand, even thought in preparation of an application, an IP Consultant must be meticulous and be careful to what she/he fill-in to the application. The continuation of the assistance and service shall also become your consideration. The experience gained from several years of hard working and the intuition to solve intellectual property problems shall be valued for something. However, you also must not tricked by a high fee but low quality service of irresponsible consultants.

5. Registered IP Consultant

Even though a local applicant is not obliged to appoint an IP Consultant to file their intellectual property asset, it is encourage hiring a registered IP Consultant (you may re-check the name and registered number of an IP Consultant with DGIP) before you engage their service. Registered IP Consultants have been trained by DGIP (which make them have complete knowledge on the intellectual property issues) and are usually experience IP Consultants which have been practicing for years.

Information:

Directorate General Intellectual Property

Jalan Daan Mogot KM 24
Tangerang 15119 – Banten

Telp: (021) 5525388, 5524839

Url: www.dgip.go.id