franchising aspects Dec, 15 2009

Steps to secure intellectual property rights

In this era of forgery and duplicity every franchise owner has to ensure the protection of his/her intellectual property rights through correct means. With this article we attempt to bring to you how one can safeguard the originality and uniqueness of int

By Ramanjit Kaur
Feature Writer
Steps to secure intellectual property rights

The most important and valuable asset for a franchisor is his/her intellectual property rights. S/he has to ensure the protection of such assets in order to maintain and retain its originality. The value of a franchise is based on the intellectual properties which include, trade marks, copyrights, patents and other confidential business information. As Dawn Stallwood, Consultant Partner, Thomas Eggar LLP, UK says, “The most important thing to protect in franchising is the intellectual property rights (IPR) or 'know-how' that makes up the franchise system.” In order to safeguard the value of the intellectual property right, a franchisor not only drafts the franchise agreement but also takes proactive defensive measures.

For achieving a sustainable development, a franchisor extends his/her intellectual property rights to the franchisees. As s/he cannot hide these rights from the franchisees so, a franchisor has to disclose them carefully. A franchisor often shares these rights with franchisees through training modules, operation manuals, advertising templates, or other electronic means. The ultimate role is played by the franchise agreement, which limits the franchisees to use the intellectual property rights in stringent conformity. Such rights, help in maintaining the franchise standard, specifications, confidential and proprietary information.

Below mentioned are the ways through which a franchisor can protect the infringement of the intellectual property right:

  • Trademarks/trade names: It’s through the use of words, signs, designs, or logos. that the customer recognises the brand name, products or services. A franchisor, while permitting the use of trade mark, must ensure its consistent usage. Also, franchisor must make sure that all the franchisees use the same unmodified trademark. Along with this, a franchisor has to use “®” symbol, which signifies the registration of the brand name. Additionally, the use of unauthorised trademark may lead to denial of trademark rights. Therefore, being a franchisor it is your duty to monitor the use of the trademark by the franchisee and also keep a check on the use of similar trademark by any third party.
  • Copyrights/ patent: Copyright protection is necessary especially when the creative work of the franchisor is going to be disclosed to the public. Therefore, it is obligatory for a franchisor to register his/her brand name, operation manuals, confidential data of the company, content of the website, and business strategies. So, in order to limit the access and usage of the franchisees, it is necessary for the franchisor to register his/her works under the Copyright Act. Registration is the pre-requisite for filing a complaint against an errant franchisee or the third party alleging infringement.
  • Trade secrets: A trade secret is the commercial information of a company or an enterprise, which is not available to the public. Therefore, it is important for the franchisor to apply measures to keep them secret and also restrict franchisees access to it to avoid the transferability of data.

Being a franchisor, it is your duty to ensure the value of the franchise system and the investment of the franchisees. Therefore, you have to take proactive measures to preserve your intellectual property rights from unauthorised usage.

Related: Franchisor: Makes or Breaks a Franchise

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