Our client was a relatively young company that had grown at an exponential rate. The owner started from zero and built a multi-million pound business in less than five years – a genuine self-made man. The phenomenal rate of growth of the business came at a price and that price was not obvious at the time we started their Brand and Intellectual Asset Audit.
Our initial meeting with the client has nothing to do with brands, we were there to discuss business strategy and during the course of our discussion the issue of their brand name and logo came up. I asked who had designed the logo and when he said that it was an outside agency, I asked if they the ownership of the copyright had been assigned to them. Little was I to know that that innocuous question would open a can of worms!
Once the client realised that he may have had potentially serious issues with the company’s Intellectual Property (IP) and Intellectual Assets (IA), he commissioned us to conduct a full audit, not only of their brands, but on of all of their IP and IA.
The Brand and IA Audit
In order to review their brands and IA we had to first gain a deep understanding of their business, including what their values and goals were, what systems and processes they had in place to deliver their service, what their staff did etc. This was an involved process and took some time to complete and uncovered some fairly serious issues relating to their Intellectual Assets.
The main issue that many of the most important aspects of their IP was encompassed in what is know as ‘trade secrets’. Put simply this means while their processes and systems were unique and added value that their client were willing to pay for, they were no able to be protected in any formal way. This meant that the only way to protect the company from competitors copying their systems was to keep them secret.
The following are some of the many issues that we found during our audit, along with some of the solutions that we implemented.
1. We found that many of the logos they used for their products were designed by a designer who worked with them on a self-employed basis. This meant that they did not own the copyright to their own logos. We solved this issue by having the designer sign an assignation of copyright that covered all past and future works.
2. Not all of their employees had employment contracts and for those that did, the employment contract did not cover confidentiality. The same issue applied to external contractors that they used on a regular basis, many of whom had detailed knowledge of the company’s trade secrets. To resolve these issues we created new employment and consultant engagement contracts which included assignation of copyright and a confidentiality agreement.
3. A bespoke software system had been written to enable them to provide their services. This system basically contained most of the ‘knowledge’ required to provide the service to their clients that had made their business so successful. The problem was that the system was developed very early in the company’s evolution and no protection for the company was put in place to ensure that they owned the rights to the software. This effectively mean that the company who wrote the software owned the rights to it and could have sold it to a competitor. We created a detailed copyright assignation and confidentiality agreement which they eventually signed (after much persuasion).
After the Audit
After completing the audit and putting measures in place to correct the issues that we uncovered, we prepared a brand guide which was distributed to all staff. We also ran seminars for their key staff to educate them on how to use the brands properly and how to protect confidential information.
We also put procedures in place to ensure that no single person in the organisation (other than the owner) knew all of the pieces of the ‘jigsaw’ in order to protect their trade secrets
We continued to help the company for a few years, evaluating proposed new brands that were designed by their in-house team to ensure that they were not infringing any existing registered trade marks and also registering them as trade marks to protect them for the future.
The company continues to grow and with a much stronger foundation built upon strong Intellectual Property and Branding.