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Intellectual property law expert Alison Bryce explains why packaging buyers - especially those starting out - need to make sure they own the rights to their packaging design.
Making a product stand out through its packaging is a crucial step in its development, particularly in a market where the long-term financial importance of a brand is paramount.
But not owning the rights to branding can be disastrous further down the line.
Packaging is often designed with particular objectives in mind. It will either be functional or reflect the nature of the product it is protecting.
But as the product takes off, the packaging and branding crucially becomes a form of advertising, enabling customers to instantly recognise the products and reinforce the key product messages, be it quality, value for money, taste or well-being.
Surprisingly, it is at this point that many producers finally realise they do not own the rights to their brand or visual identity, which have remained with the original designers.
The more valuable the brand is to a business, the more important it will be to investors and purchasers that the business owns this intellectual property.
Equally, to defend a product against infringers who look to benefit from the goodwill of the merchandise, it is easier to do if the company owns the branding.
Practical steps
How does the ownership of a brand work in practice? Various types of intellectual property will exist in branding and packaging. Copyright will exist in logos or images used.
Trademark protection could be given over logos, slogans or text. If the packaging has an unusual, aesthetic feature, such as patterns or shape, it may attract registered designs.
The person or company creating the brand will own each of these types of intellectual property. Therefore if the branding and packaging is created in-house, the business owner will own the intellectual property.
However, if an external agency created it, they will own the intellectual property unless there are contractual provisions stating where this is assigned at the end of the project.
This is the key point. Firstly, the intellectual property created by that other person or company needs to be transferred in writing.
Secondly, the document must use what are known as ‘operative words’ which actually transfer the property.
It is best practice to have this done at the time the rights are created, to make sure the other person cannot do anything with the rights. The worse case scenario is they transfer them to someone else.
Do not panic though. Provided it was everyone’s intention at the time the rights were created that they were to be transferred to the business owner, this can be recorded at a later date.
Either way, regardless of the money, time and effort spent in developing the product's branding, it is beneficial to know what rights there are and to ensure the business owns them.
Alison Bryce is a partner in the IP & Technology department at Maclay Murray & Spens LLP in Edinburgh. Contact her at alison.bryce@mms.co.uk
Tel:886-2-28941823 Fax:886-2-28941837 E-mail:viya@packsourcing.com
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