Digital intellectual property and your business
Modern businesses increasingly create, acquire and own digital assets, because everything from photographs and original music to software and technical data can now be retained in a digital format.
Digital assets are a form of intellectual property (IP), and like all property they can be valuable and provide an important source of revenue. These IP rights must therefore be protected if they are to be effectively exploited.
This guide defines digital assets, explains how to protect them, what to do if your rights are infringed and how to use licensing and contractual arrangements.
Digital assets explained
'Digital assets' is a blanket term to cover everything that you own or have rights over that can be stored in a digital format. The range of material covered by the term is extensive and growing, and includes:
- original music
- film and video
- technical data
- copyright publications
Digital assets can be created in a number of ways, including computers, digital cameras and audio systems, mobile phones and scanners.
Digital assets can be stored on computers or network servers, on remote hard drives, CDs, DVDs, tapes, portable storage media such as flash drives, and internet servers. Several of these storage media are inherently insecure, and since digital assets can be of considerable value to a business, it's important to take steps to protect them from unauthorised use. This will allow the assets to be exploited, sold or licensed to create income streams.
The rules on digital intellectual property
Most digital assets are protected by the law on copyright, which covers anything that is written down or recorded. Copyright is an automatic right - there is no need to register ownership. Copyright owners are usually the people who create or first own an asset, unless it is work created by someone as part of their employment. In these cases, the copyright owner is the employer.
Someone who creates work as an independent contractor automatically owns the copyright to the work. However, the business or person commissioning the work can ask for copyright to be transferred as part of the contract. It is often included as a contract term that copyright is assigned once the contractor has been paid for the work.
For more information, read our guide on copyright for your business.
How can you protect your digital intellectual property
The law automatically gives copyright protection to the creator or first owner of a piece of work. However, sometimes it can be difficult to prove this. If you produce something original, you can show that you are the copyright owner by using the copyright symbol ©, or by including a declaration to that effect.
Sometimes it is appropriate to make a comprehensive statement such as 'All rights are reserved. No part of this work may be reprinted, reproduced or used without the permission in writing of the publisher.' If you own a website, you can add to it an internet copyright notice which sets out the copyright position of your website content. You can find a sample internet copyright notice and guidelines in our guide sample IT policies, disclaimers and notices.
Some digital assets can themselves be digitally protected by encoding, encryption or watermarking. This is designed to prevent unauthorised use of assets such as photographs, films, music or software that is licensed to a third party.
Some of these systems are designed for 'copy once, use many' - so that an asset may, for example, be downloaded once, but subsequently stored and used freely. This is usually the case with software or entertainment products. In other cases assets can be downloaded on a time-limited basis - for example, for trial use of a digital product.
If a digital asset is used by someone without your permission they are usually in breach of your copyright. In the same way that general copyright infringements may result in criminal liability in certain circumstances the copying of digital products may be a criminal offence. Criminal offences may also occur where a person is making or selling technology designed to break encryption which has been placed on digital products. If you feel your digital asset is being infringed you have the legal right to stop them and to receive damages in compensation. See our guide on protecting intellectual property.
Using other people's digital assets
It is very important that you respect the intellectual property (IP) rights of other businesses or individuals.
Sometimes you may want to use other people's digital assets for your own purposes. For example if you are using spreadsheet software to develop an accounting application, you should approach the owner of the rights to the software to apply for a licence to use it. You would own the copyright of the accounting application, but the original software owner would retain the IP rights in the program - so any other users of your application must buy original copies of the software.
You may want to use other digital assets such as photographs, music or videos in your own publications, including websites. The copyright owner must give their permission for this use, and they have the right to refuse. For some digital assets, there are licensing societies which grant rights to users.
It is important to bear in mind that the image rights of people or inanimate objects such as buildings shown in a photograph or video are usually separate from the copyright. You must therefore ensure that you have the permission of both the image rights owner and the copyright owner.
If you make unauthorised use of someone else's digital assets or make or sell technology designed to break encryption which has been placed on digital products, you may be fined or have to pay damages to the rights owner. Use of someone else's IP can also be a criminal offence and lead to prosecution.
Licensing, contracts, jurisdiction and enforcement
Copyright owners can decide whether or not to let other people use their work and they have the absolute right to refuse to do so. Sometimes the owner of a digital asset - eg a video, film or photograph - may want to retain it for their exclusive use. Other owners will grant licences, which can be for one-time use of an asset, for continuing use - perhaps for a limited time - or for exclusive use. Payment for these licences is usually negotiated, although some copyright owners have a standard scale of fees.
Digital assets can also be sold, and some businesses exist simply to create and sell digital assets such as software and computer games. Some photographers take pictures on a speculative basis, for example, to sell to media organisations.
If you buy, licence or sell rights to a digital asset, you should have a contract that specifies the terms under which the rights are assigned. These may limit the ways in which the asset may be used and show additional costs for more extensive use.
Copyright ownership is an international right which is protected worldwide in all countries subscribing to the Berne Convention. The ways in which owners can take action vary from country to country. However, breaches of copyright usually allow for damages in compensation. In some jurisdictions fines or other penalties can also be imposed for infringement of copyright.
Intellectual property in specific sectors
Some types of digital asset are particularly prone to copyright infringement. Illegal copies are made and circulated, so that the copyright owner loses revenue. This is especially so with mass-market assets such as software, music and videos.
Systems of digital intellectual property (IP) protection such as encoding, encryption and watermarking have made this kind of infringement more difficult. Software owners, for example, often require legitimate purchasers to register their use with a unique key which is sent to a secure website. Music and film publishers use various forms of content scrambling in an effort to frustrate unauthorised copying. Even so, it is impossible to eliminate copyright infringement entirely.
Many producers of vulnerable digital assets have banded together in industry specific groups. These act to protect the business interests of copyright owners, tracing cases of infringement, misuse and piracy and pursuing claims for damages and other actions against offenders.
Business Software Alliance (BSA)
BSA is a trade association for the software industry and its hardware partners. Among its main objectives is to protect the IP rights of software producers, enforce software copyright legislation and encourage compliance among software users. Find out more about the BSA activities on the BSA website.
UK Interactive Entertainment Association (UKIE)
UKIE (formally known as Entertainment and Leisure Software Publishers Association) is the trade association of the UK computer and video games industry and works to protect the interests of its members and prevent copyright theft and piracy. Find information on video gaming IP on the UKIE website.
Alliance Against Intellectual Property Theft
The Alliance is a UK-based coalition of associations and enforcement organisations working to protect IP rights in a range of business sectors. Members include representatives of the audiovisual, music, video game and software industries as well as publishers, authors, retailers and designers. Read about Alliance on the Alliance website.
Federation Against Copyright Theft (FACT)
FACT aims to protect the UK film and broadcasting industries against counterfeiting, copyright and trade mark infringements. Find out more on the FACT website.
UK Music represents the collective interests of the UK's commercial music industry. Read about IP protection for music on the UK Music website.