September 15, 2020

IP Considerations in a Constantly Changing Landscape

The effects of the global pandemic on New Zealand businesses vary widely.  Some businesses are booming, but for others, the uncertainty, the impact of lockdowns, travel restrictions and the difficulties in obtaining supplies are all taking a heavy toll.

Now is the time for businesses to be flexible, to embrace technology, and to look for new growth opportunities. If your business is undergoing change right now, then intellectual property (IP) rights are likely to be an important consideration for you. Below are some key points to be aware of as you negotiate these turbulent waters.

Working with others

Some businesses are developing new products and entering new markets by working together with another entity, sometimes even a competitor. Are you looking to enter into a joint venture? Share confidential information with others? Collaborate? If so, then you need to consider how you will control any confidential information that you share. You should also think about who will own any new intellectual property rights arising from the relationship. You need to reach agreement on these points and you should record that agreement in writing. Too often, New Zealand businesses enter into relationships with others on the basis of a loose promise and a handshake. That might work well initially, but invariably business interests and personnel change over time and the loose agreement begins to unravel.


What better time than now to look at how to perform better and how to provide new products and services to meet the changing environment.  You might also be eligible for R&D funding (available through Regional Business Partners) to help you on the innovation highway and to check whether you are able to commercialise your ideas without infringing someone else’s IP rights.

As with any innovations that might be protectable with a patent or registered design, keep the idea confidential and speak to an IP expert early in the project.  You will likely receive useful information to guide you around the common pitfalls experienced by others.

Tidying up

Does your company own registered IP rights?  Are each of these rights still useful or are some merely gathering dust?  Could you increase your revenue stream by licencing some of these rights to others? Are there any rights that are no longer of use to you but that you could sell to someone else? Renewing registered IP rights can be expensive, so now is a good time to review your IP portfolio and make sure that it’s working for you. IP audits are a useful way to ensure that you’re investing in protecting the right IP to the necessary extent in order to meet your business goals without spending on dead wood.

Due diligence

Are you looking at buying another company? A franchise? Someone else’s IP rights? If so, be sure to conduct due diligence and to include a review of the IP rights of that company. If IP rights are an important part of the purchase, you should check that those rights are owned by the relevant entity, offer the expected scope of protection, and are valid.

Departing employees

Unfortunately, and despite best efforts, many companies find themselves considering the likelihood of employee redundancies.  For those employees that are skilled in a specific field, there is a reasonable chance that they will look to your competition for employment, where they know that their skill set will be of value. But that’s not the only thing that could be of value to your competitors. Your employees might also know confidential information that is critically important to your business, such as your supplier information and contracts, distributor arrangements, customer lists, marketing initiatives, strategic plans, practices and procedures, and IP.

Before heading down the redundancy path for an employee, it would be a good idea to check his or her employment agreement to see if it includes a confidentiality clause that precludes them from sharing this sort of information with your competition or anyone else. And if these clauses are included, and I hope that they are, it would be a good idea to gently remind the employee of his or her obligations in the exit interview.

Shutting up shop

Sometimes, even with best endeavours, it’s necessary to close the doors and shut up shop. At these times there will be numerous things on the ‘to do’ list and ownership of IP rights should be one of them.

It’s not uncommon for companies to be removed from the Companies Register before IP assets owned by the company have been transferred to another. When this happens, the IP assets become bona vacantia. In other words, the ownership of the IP assets passes to the Crown. Although it is generally possible to recover the lost assets, the process is time consuming and it comes at a cost. Better to avoid the issue entirely and transfer ownership of IP assets to an ongoing entity before removing the current owner from the Companies Register.

If your company is in any of the situations above and you could benefit from our guidance, or if you have other IP concerns at present, please get in touch. At James & Wells we are here to help and we’re only a short email or phone call away.

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