Step-by-step guide to applying for a UK trade mark online

This step-by-step guide to applying for a UK trade mark online tells you how to apply online to register a UK trade mark. If your application is straightforward, you can usually make the application yourself (without needing a lawyer). Use this guide to assist you with completing each field of the UK online trade mark application, including who is applying for the trade mark, owner details, description and class of the trade mark, priority date, type of trade mark, and more. This step-by-step guide to applying for a UK trade mark online can save you time, by helping you to complete the form correctly (which reduces the risk of follow up questions from the UK Intellectual Property Office (UK IPO)). If you would prefer to apply for your UK trade mark by post using a paper form, see Step-by-step guide to filling in the UK trade mark application form . You can also buy this guide as part of the Protecting IP and confidential information toolkit .
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Sale non-disclosure agreement

Use this sale non-disclosure agreement (also called an NDA) if you are thinking of disclosing information to a potential buyer of the shares or business and assets of your company. By using this template agreement before giving out any confidential business information, you protect your business and minimise the risk of potential costly disputes in the future. The confidentiality obligations in this sale non-disclosure agreement are mostly given by the potential buyer (although by signing both of you will agree not to disclose any details of your discussions).
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NDAs and protecting confidential information
Intellectual property issues during meetings or negotiations
Q1:What can I do to protect my intellectual property during business meetings or negotiations?

It is imperative that you have sufficient safeguards in place to protect your before going into a business meeting or negotiation with someone from outside your business. If you do not have the requisite safeguards in place, you are more vulnerable to having your designs, work or inventions stolen or copied by the person you are dealing with. Losing could have disastrous effects on your business.

There are legal and practical steps that you can take to protect your during meetings or negotiations with someone from outside your business. Such steps should be used together where possible.

In summary, in order to protect your , you can do the following:

  1. Consider registering your

    You can register certain types of , depending on exactly what you are aiming to protect.

    For more information on how and when you might wish to register your , see Q&A 2 and following.

  2. Have a in place

    A properly drafted non-disclosure agreement (), which is signed by the person you are meeting or negotiating with, will put that person under a legal obligation not to disclose any information referred to in the which they receive. See Q&A 32 and following for more information on NDAs and how they should be drafted. You can find a template at Non-disclosure agreement (NDA). You can also purchase these templates as part of the Protecting IP and confidential information toolkit.

  3. Take practical steps to reveal as little information about your as possible

    You should be wary of who you are talking to and only reveal information where it is necessary to do so. You should be particularly wary of divulging too much information concerning any invention you might have. If you disclose what the invention is, you may lose your right to it in the future. See Q&A 3 for more on the danger of revealing too much information about your invention and the practical steps that you should take to protect your .

Of course, disputes can still arise even if you do take such precautions. For how to deal with any disputes concerning your see Options for dealing with infringements to intellectual property.


Q2:How can I protect my trade mark before business meetings or negotiations?

You can register various types of including names, , shapes, sounds and motions. It is sensible to register your business's name and any logo as , if you can, to prevent your competitors intentionally or inadvertently copying your brand.

Your must have distinctive character, that is, it must clearly show customers that the marked or services come from your business, and must distinguish your or services from those sold by your competitors.

If you do register a (for example, your logo), you are granted exclusive rights to use it. You can also prevent people from using it without your consent in a way which is detrimental to your or which confuses people about which business has produced the . For example, if a sports club has trademarked its logo and uses it on official merchandise, other businesses cannot then use that logo as may be misled in thinking that they are purchasing official merchandise.

Registering a means that the other party in your business meeting or negotiation cannot steal your and use it for their business.

For more information on registering see Preparing to register a trade mark. See Step-by-step guide to applying for a UK trade mark online, Step-by-step guide to filling in the UK trade mark application form and Step-by-step guide to applying for an EU trade mark online for how to register a or . You can also purchase these guides as part of the Protecting IP and confidential information toolkit.

Whilst registration can provide you with strong protection, it is not the only way to protect your before going into a business meeting or negotiation. You should not be complacent about divulging a lot of information about your just because it is registered. See Q&A 6 about how much you should reveal about your , and see Q&A 31 and following on how to protect your business information generally.


Q3:How can I protect my invention before business meetings or negotiations?

If you have invented something, you can it to give it legal protection. In general, for an invention to be patentable it needs to be new, capable of industrial application and involve an inventive step, which means it should not be obvious to a person skilled in the field at the time the is filed.

By your invention, you gain an exclusive right over it, including the sole right to make and sell your invention. This means that the other party in your business meeting or negotiation cannot steal your work and mass produce it if you have a in place.

However, registering for a can be expensive, time-consuming, and will reveal your invention to the public, which you might not want to do, especially if you are at an early stage of your business.

See Understanding patents for more on your invention.

Whilst registration can provide you with strong protection, it is not the only way to protect your invention before going into a business meeting or negotiation. You should not be complacent about divulging a lot of information about your invention just because it is registered. See Q&A 10 on how much you should reveal about your invention, and see Q&A 31 and following on how to protect your business information generally.


Q4:How can I protect my design before business meetings or negotiations?

You can register a design if it is new and individual (ie not too similar to anything that has gone before – it must make a different overall impression from any earlier designs of the same product) , and also satisfies the other registration requirements, such as being morally acceptable. Registering your design gives you the exclusive right to use the design, and the right to prevent other people using your design, or aspects of your design which give the same overall impression. This is significant because it would prevent the other party in your business meeting or negotiation from stealing your design or stealing the overall impression of your design, eg based on the lines, contours, colours, shape, texture and materials.

Whilst registration can provide you with strong protection, it is not the only way to protect your design before going into a business meeting or negotiation. You should not be complacent about divulging a lot of information about your design just because it is registered. See Q&A 6 on how much you should reveal about your design, and see Q&A 31 and following on how to protect your business information generally.

Even if you do not register your design, it will still be automatically protected as an right. However, this is a more limited right because it only protects against unauthorised copying, and does not prevent other people creating similar designs independently.

See Identifying design rights in business situations for more on protecting your designs and see Step-by-step guide to applying for UK design registration online, Step-by-step guide to filling in the UK design registration form, and Step-by-step guide to applying for EU design registration online for guidance on applying for design registrations in the and . You can also purchase these guides as part of the Protecting IP and confidential information toolkit.


Revealing information during meetings or negotiations
Q6:How much should I reveal about my trade mark or design during business meetings or negotiations?

Your starting point before going into a meeting or negotiation should generally be to only reveal as little information as is necessary to convey what your business delivers. The more you reveal, the greater chance of the party you are talking to stealing your .

You should consider whether the or design has been registered (see Q&A 7), whether you have signed an (see Q&A 8) and the parties you are talking to (see Q&A 9).


Q7:Should I reveal my trade mark or design during business meetings or negotiations if they are already registered?

If your or design is protected through registration, you will generally have the exclusive right over its use and you can take legal action should the other party in the business meeting or negotiation try to steal it. On the other hand, if your or design has not been protected yet, you need to be particularly careful about what you say because you are more vulnerable to it being stolen if you reveal it in the business meeting or negotiation.

See Q&A 2 for how you can register your and Q&A 4 for how you can register your design.


Q8:Should I reveal my trade mark or design during business meetings or negotiations if I have signed an NDA?

If the person you are meeting or negotiating with in relation to your or design has signed a properly drafted in your favour, that person is under a legal obligation to keep information on the confidential. Therefore, you might be prepared to reveal more if you have an in place.

See Q&A 32 and following for more information on putting in place an . You can find a template at Non-disclosure agreement (NDA).

However, you should not become complacent with how much information you reveal just because an has been signed. It is always better to not reveal the information in the first place rather than relying on a legal document to enforce confidentiality.


Q9:Should I reveal my trade mark or design during business meetings or negotiations regardless of who I am talking to?

If you are pitching to potential investors or business partners, they will generally demand to know more specific details about your business than, for example, a job applicant that you are interviewing. In fact, some investors may refuse to invest if you do not your , including . However, you also need to bear in mind that a potential business investor or partner is in a much stronger position to steal your work and mass produce it or implement it. As a result, you should always conduct some research on the investor/business that you are meeting with beforehand, and ask yourself questions such as:

  1. What is their background and portfolio?

  2. Which businesses did they invest in previously?

  3. Are they working with competitors of yours?

  4. Do they have a genuine reason for doing business with you?

  5. What is their reputation and have other businesses complained and brought cases against them?


Q10:How much should I reveal about my invention during business meetings or negotiations?

If your business idea is an invention and you have not it yet, you should not reveal any information about it in business meetings or negotiations. This is because if you disclose enough information about the invention to allow a person skilled in that area to put the invention into effect, the invention is no longer 'new' and you cannot it, unless:

  1. the disclosure occurred in or at an ; and

  2. you file for a within six months of the disclosure.

Therefore, if you do want to reveal information about a non- invention at a meeting or during negotiations, you should ask the intended recipients to sign an beforehand to ensure that the meeting is confidential (see Q&A 32 and following for how to put an in place), and you also need to be certain that you will file for a within six months of the meeting. If you disclose your invention at a meeting or during negotiations to someone who is skilled in that area, and who could put that invention into effect, and then do not file for a within six months, you lose the right to ever your own invention, which will potentially undermine your business plan.


Intellectual property issues when entering into a business collaboration
Q15:Should I sign an NDA before entering into negotiations on a business collaboration?

Yes. You can find a template at Non-disclosure agreement (NDA).

One of the main advantages of collaborating with another business (referred to in this section as a and also known as a ) is that it enables businesses to pool together assets, including , to achieve a particular goal. For example, if your business has a very strong brand and another business has a for a highly marketable invention, you might want to enter into a and these rights with each other.

See Preparing your business before collaborating with another for detailed guidance on business collaborations.

You should however be careful and protective of your during pre-contractual negotiations and discussions on business collaborations, and consider the use of . See Q&A 32 and following for more on . See Q&A 16 for other things to consider.


Q16:What intellectual property issues do I need to think about before I enter into a business collaboration?

It is vital that you consider how will be dealt with before entering into a . In particular, you need to take the following steps:

  1. assess the other business's before entering into a with them. See Q&A 17 and following for more information;

  2. arrange a plan for what is to happen to the existing that you and the other business own, including whether and how each of you will be allowed to use the other's existing . See Q&A 21 and following for more information;

  3. arrange a plan for what is to happen to the new which is created in the course of the . See Q&A 26 for more information;

  4. arrange a plan for what is to happen to if the ends or if a party to the leaves. See Q&A 28 for more information.

You can also use Checklist - protecting business ideas before starting a collaboration to ensure everything is covered.


Q17:How can I check another business's intellectual property before I enter into a business collaboration with them?

Checking another business' is also referred to as an due diligence process.

An process is complicated and you should seek the help of a lawyer in order to carry out a thorough process. (For access to a specialist lawyer in a few simple steps, you can use our Ask a Lawyer service.) However, it is useful to be aware of what the process involves.

In summary, you can check the strength of another business's by:

  1. checking whether the is protected and still in force. , and designs can be protected by registration, which prevents others from stealing or copying designs, work or inventions. See Q&A 18 for further information. Checking in, eg, books, music or computer programs is more difficult, as there is no register. See Q&A 19 for more information;

  2. investigating the scope of the (for example, if there is a , what exactly has been , and to what extent does it exclude the rest of the market?);

  3. investigating whether the has any other restrictions or limitations (for example, if it has been licensed to a );

  4. checking whether there is any pending litigation which might undermine the .


Q18:How can I check whether another business' patents, trade marks or designs are registered and still in force?

The business with whom you are entering into the should have the relevant documentation proving registration, but this information is also readily available online.

  1. To check if a business has an invention, you can search the various patent databases. In particular, Espacenet provides a bank of which have already been registered. If the business has only recently made a and has not completed registration yet, search the patents journal, which provides a list of pending applications. For more information on searching for , see Searching for patents and patent applications.

  2. To check if a sign has been , you can search the Intellectual Property Office Trade mark register. This can be done using either the number, the name of the owner, or a keyword, phrase or image. To track the progress of a application or to be informed about any updates relating to a particular , you should use the Intellectual Property Office Tracking service. For more information on searching for , see Searching for registered trade marks that apply in the UK.

  3. To check if a design has been registered, use the Intellectual Property Office Design search. You can search using the design owner's name or the design number. For more information on searching for , see Searching for registered designs and design applications.


Q20:Should I sign a letter of intent when negotiating a business collaboration?

Yes, to ensure you both agree on the principle of how you will both deal with (see Q&A 16) and other key points.

When you are entering into commercial negotiations with another party, it is good practice to set out the key terms that will form the basis of your discussions in a document called a (also referred to as a , or ). Although not usually legally binding a should help to flush out whether there are any key commercial points which you are unable to agree.

Ultimately, the or you enter into with the other parties will determine legally what is to happen to any .

See Signing a letter of intent for detailed guidance on letters of intent and Letter of intent for a template letter. You can also purchase this document as part of the Business collaborations toolkit, which will guide you through the process and to the most appropriate document at each stage.


Q21:What happens to existing intellectual property when I enter into a business collaboration?

Before you enter into a , you will need to decide how existing rights will be split and whether they will be:

  1. given by your business to the other business or businesses you are partnering with;

  2. given by the other businesses to you; or

  3. given by you and the other businesses to a () if one is to be set up to own and operate your .

You should give careful consideration to how rights are split.

You should give the other businesses, or if applicable the , the rights you own which are necessary for the to succeed.

However, you should also ensure that any you enter into does not (or does not have the potential to) restrict competition in the market by, for example, fixing purchasing or selling prices. You should get legal advice if unsure of your position. For access to a specialist lawyer in a few simple steps, you can use our Ask a Lawyer service.

See Q&A 22 and following for how to transfer your as part of a .


Q22:How do I transfer my company's intellectual property to a business collaboration I am entering into with someone else?

Once you have decided which rights to transfer, you need to decide how they will be transferred. There are two main ways to transfer rights:

  1. by assignment (see Q&A 23); or

  2. by licensing (see Q&A 24).


Q23:What is an assignment of intellectual property in a business collaboration?

Assignment involves a complete change of ownership in the ; if you assign rights to another business in the or, if one is to be set up, the , you are transferring ownership of the for good.


Q24:What is licensing intellectual property in a business collaboration?

Licensing involves you allowing a to do certain acts with the which they would not have been able to do otherwise, but you retain ultimate ownership of the . You can limit a licence, for example by stipulating that it only applies for a certain amount of time, or by restricting use of under the licence to a certain geographical area (see Q&A 25 for more information).

It is more common to licence rights than to assign them in business collaborations. This is because owners of rights typically want to retain ownership: if you assign your to another business, or if one is to be set up the , and then it fails, your will be lost for good. On the other hand, if you merely licence your , you remain in ultimate control and have the flexibility to stipulate how the is used and when it needs to be returned.


Q25:Can a licence for intellectual property rights be limited in a business collaboration?

Yes, it can. Assuming you do decide to licence the rights, you then need to decide the scope of such licence, ie, what it will cover. In particular, you should consider the following:

  1. The length of the licence

    For example, if you licence rights to another business, will the licence last only until the ends, or will it continue even after the ends?

  2. The geographical scope of the licence

    For example, if you licence rights to another business, can they be used anywhere in the world, or are they restricted to a certain area?

  3. Whether there are any restrictions on how the licence can be used

    For example, you may want to license rights to another business, on the condition that it does not use them to compete with you. This is sometimes referred to as a '', and can be used to prevent other businesses competing with you once a ends. Any should be reasonable in the circumstances and should specify on exactly what grounds the other party is not allowed to compete with you and the duration of the restriction.


Q26:What happens to the new intellectual property that my business collaboration creates?

If you do not agree otherwise, ownership of will belong to whoever created the work the attaches to (eg the pictures, designs or codes etc). If an develops in the course of their employment, their owns that .

This means that if, for example, your own develops an invention for the , you will have the right to the invention, as . See Employees and patents for more information. On the other hand, if the you are part of is a separate and an of the develops an invention, the will have the right to the invention.

However, it is possible to make other arrangements in relation to created by . For example, you can specify that ownership of created in the course of the belongs to one in particular (for example, your business), or you can arrange that rights belong jointly to the involved (co-ownership. See Q&A 27 for more information on co-ownership).


Q27:Can parties to a business collaboration co-own intellectual property?

You can ownership of any with other parties to a . If you choose to do this, you should be aware of the restrictions this might bring. You cannot always act on your own without the consent of the other owners. For example, where there is co-ownership of a you cannot amend the specification of the , grant a licence for the , or assign the without the consent of the other owners. Likewise, where there is co-ownership, you cannot reproduce the work, or grant licences for others to reproduce it, without the consent of the other co-owners.

As a result of these difficulties with co-ownership, it may be preferable in a or to specify that it belongs to whoever developed it. Whilst this merely confirms what the legal position is anyway, it is good practice to expressly state it for the sake of certainty and clarity.

The rights can then be licensed from the owner to the other parties.


Q28:What happens to intellectual property when my business collaboration ends or a party to the business collaboration leaves?

Your or should state clearly what is to happen to any being used once the ends or if one party leaves. This includes dealing with the licensed by the businesses involved (eg your business) and, if a has been set up, dealing with the actually owned by this .

What happens to this is largely dependent on the way in which the agreement ends or the reason a party decides to leave.

For example, it is common to specify that if one party has the terms of the , or has to leave because it has become , it will lose all of the rights it has been granted and will lose its right to any further rights.

Deciding what happens to rights upon the termination of a is also linked to how you deal with rights in the first place. If you licence an right (see Q&A 24), you retain ultimate ownership and you can limit the length of the licence, for example by specifying that it will only last as long as the lasts. On the other hand, if you assign an right (see Q&A 23), ownership is transferred completely and if the fails, the right is lost with it. Considerations about the termination of a should therefore impact the way in which you deal with rights in the first place – see Q&A 22 for more on this.


Intellectual property issues with a business sale
Q29: What happens to my intellectual property when I sell my business?

This depends on what agreement you make with any purchaser, and especially whether you decide to sell your in the business or just its assets. For more information on the different ways of selling a business, see How to sell a business.

If you sell all of the in your business, the rights will automatically transfer to the purchaser – this means that you will completely lose ownership of your .

On the other hand, if you sell your business assets, all of your rights will not automatically transfer to the purchaser – you will be able to agree with the purchaser which rights will be transferred to them.


Q30:Should I sign a memorandum of understanding during negotiations when selling my business?

When conducting the sale of your business, you should consider entering into a with the potential purchaser before a formal agreement is made. This is a brief, non-legally binding document which summarises the basic principles that you have agreed.

A is useful to consolidate the progress made during negotiations and make it clear what both parties intend when the business is sold. However, it does not legally protect or decide what will happen to your . Ultimately, the contract that you sign with the purchaser will decide how is dealt with when you sell your business and the advice of a lawyer should be sought to help you decide what arrangement will be best for you. For access to a specialist lawyer in a few simple steps, you can use our Ask a Lawyer service.


NDAs: Introduction and benefits
Q31:How can I protect my business information before going into business meetings or negotiations?

It is inevitable that in the course of a business meeting or commercial negotiations (eg entering into a ) you will be disclosing information on your business.

Some of this information may relate to the of your business which, depending on your business, could be a , invention, design or creative work. You can take specific steps to protect some before disclosing it, although this is not always possible and, even where you can, you may not have time before the meeting or negotiations. See Q&A 2 and following and Q&A 6 and following for guidance on this.

Other business information you might want to disclose could include your business plan, accounts, other financial information, customers and suppliers, and information on your IT systems. This will not be capable of protection in the same way as (see Q&A 2 and following).

There are two main ways in which you can protect this information:

  1. do not disclose confidential or sensitive information during initial discussions but wait until later in the process, possibly at an advanced stage of discussions, if there is scope to do this (see Q&A 6 on how much to reveal about , which applies equally to other business information); and

  2. ask those to whom you plan to disclose information to sign an before you disclose any information to them. If you do not have one in place and they misuse the information, it will be much more difficult to pursue them (see Q&A 32 and following on how an can help and how to put one in place). You can find a template at Non-disclosure agreement (NDA).

You need to keep in mind the possibility that discussions, even if they reach an advanced stage, may not lead to any business being done or to the negotiations concluding in a deal. In either case, you will want to prevent the information being misused or somehow getting into the wrong hands such as a competitor.


Q32:What is an NDA?

An is a legal agreement to prevent the misuse of confidential or sensitive information.

If someone to whom you plan to disclose information on your business signs an (also referred to as a or confidentiality ), that person will typically agree:

  1. to keep the information you disclose confidential;

  2. only to use the information for the purposes for which it was disclosed and not for any other purpose;

  3. not to disclose the information to anyone else unless specifically allowed to do so under the ; and

  4. at your request to return to you or destroy any information handed over.

You can find a template at Non-disclosure agreement (NDA). For guidance on when you should consider using an , see Q&A 33 and following. For guidance on the practical steps you should take before asking someone to sign an , see Q&A 35 and following.

See Q&A 45 for more detailed guidance on what provisions are typically included in an .


Q33:When should I consider using an NDA?

You should consider using an in any situation where you are planning to disclose information on your business to a . An should be signed before you disclose any information.

  1. Most typically, this will be during the early stages of discussions or negotiations on a particular idea, project or transaction.

  2. You should also consider using an when entering into discussions with prospective investors and lenders (see How to prepare in advance of raising money) and prospective buyers (see Protecting a business when looking to sell).

See Q&A 34 for the potential benefits to you of a signed . You can find a template at Non-disclosure agreement (NDA).

For guidance on the practical steps you should take before asking someone to sign an , see Q&A 35 and following.

NDAs are also commonly used in the context of employment, both when discussing your business with a potential or , and when a member of leaves your business. It is in this latter context in particular that the use of NDAs can prove more controversial (see Q&A 41).


Q34:What are the benefits to me of having a signed NDA before disclosing information at business meetings or negotiations?

The key reasons why you should ask for an to be signed before disclosing business information are:

  1. a signed sets out clearly the way in which any should use the information you provide them;

  2. a signed operates as a deterrent to discourage misuse by the person who receives your information;

  3. if the recipient misuses your information in of the you will normally have a legal claim against them;

  4. without an it will be much more difficult to bring a legal action in the event of misuse (see Q&A 48);

  5. a signed (particularly a mutual one) can help to establish a mutual bond of trust between you and any person with whom you are sharing information;

  6. if you disclose information about a non- invention, it will help prevent the invention ceasing to be patentable as a result of the disclosure (see Q&A 10 for more information); and

  7. if you ask someone to sign an after you have disclosed information, they may refuse to sign or, even if they agree to do so, there may be a question mark about whether you can enforce the (see Q&A 43).

NDAs are widely used in business but legal proceedings to enforce them are relatively unusual (see Q&A 48). For this reason, even if you have an in place, you should still be cautious about disclosing any particularly sensitive or confidential information.


NDAs: Considerations before signing
Q35:What should I do before asking someone to sign an NDA?

Before presenting an to be signed, you should think about what information you are seeking to protect, whom you are dealing with and whether the should be one-way or mutual.

  1. What information you are looking to protect

    You should think about the information you are looking to protect, so you can justify why an should be signed. For example, a person with whom you are negotiating is likely to have more understanding if you are looking to protect information on a novel invention rather than general financial information on your business. See Q&A 36 and Q&A 37 for more information on this.

    If the information includes , you should take what steps you can to protect it before the meeting or negotiation – registration if you have a trademark, invention or design (see Q&A 2 and following), or careful recording in the case of any creative work (see Q&A 5).

  2. Whom you are dealing with

    Some businesses will refuse to sign an . See Q&A 38 for more details of when this might arise.

    It may not always be appropriate for an to be signed, for example if you are interviewing someone for a relatively junior role and you do not have to reveal any confidential or sensitive information. This is in comparison with an interview for a senior position, for example chief technology , or where you are negotiating a , where you may need to disclose sensitive information.

    In some cases, you may not know all the details (such as address or if a ) of the person you are dealing with. In these circumstances, you can use our template (Non-disclosure agreement (NDA)) which allows you to leave the other party's details blank for them to fill in manually and then sign.

  3. One-way or mutual

    An can be either one-way in your favour, with no or limited from you, or it can be mutual with both you and the person you are meeting or negotiating with giving the same .

    See Q&A 39 for more guidance on the difference between a one-way and mutual and circumstances in which you should think about presenting a mutual for both you and the recipient to sign.


Q36: What information should I be looking to protect with an NDA?

The purpose of an is to protect business information you disclose in the course of a business meeting or negotiation.

In particular, you should be looking to protect the following information:

  1. which you have not registered (see Q&A 2 and following for the process of registration) although even for you have registered the use of an will make the other party aware they are under an obligation to keep it confidential;

  2. specifically, information on inventions which you have not (see Q&A 10 for the benefit of an here);

  3. other information which is confidential or sensitive such as your business plan, know-how, financial information and customer and supplier lists; and

  4. details of the discussions between you and the person receiving information from you.

If there is any information you are particularly concerned to protect, such as details of an invention or a feature of your business model, you should exercise caution about disclosing such information in the first place and additionally consider specifically referring to it in any you prepare.

A well drafted will contain exclusions from the information protected to avoid later arguments that the is too wide and therefore not enforceable (see Q&A 37).


Q37: What information is typically not protected by an NDA?

Information typically excluded from protection under a well drafted includes:

  1. information which is already available to the public at large; or

  2. information which was lawfully in the recipient's possession before being disclosed.

The reason for doing so is to avoid later arguments that the is too wide and therefore not enforceable .

Both types of information are excluded in our template at Non-disclosure agreement (NDA).


Q38:Will someone to whom I plan to disclose information at a meeting or negotiation always be willing to sign an NDA?

No.

Whether someone to whom you plan to disclose information at a meeting or during negotiations will agree to sign an depends on the particular circumstances of your meeting or negotiations and whom you are dealing with. You should think about this before presenting an .

Some businesses will refuse to sign an as a matter of principle. For example, if you are looking to raise money for your business by issuing and plan to pitch to , some say on their websites that will they not sign NDAs (see How to prepare in advance of raising money).

Other businesses to whom you want to pitch may not want to engage with you if you ask them to sign an , taking the view that they would rather deal with someone who does not require this.


Q39:Should the NDA I ask someone to sign be one-way or mutual?

An can be either one-way or mutual.

In our template Non-disclosure agreement (NDA), you can choose whether to create a one-way or a mutual . In a one-way , most of the will be given to you by the person to whom you plan to disclose information. In a mutual the will be given by you in relation to information of the other person's business, and by the other person in relation to information you disclose on your business.

If you are, for example, pitching to someone, you should give serious consideration to presenting a mutual for the following reasons:

  1. it shows you are thinking of their interests, as well as your own, in protecting their information;

  2. a mutual may help to persuade that person to sign an when they might otherwise be reluctant; and

  3. it shows your willingness to commit to the same you are asking that person to give.

It may also be appropriate to present mutual NDAs for some interviews where you will be expecting the candidate to reveal confidential information to check their suitability – for example, if you are interviewing a to work in your business for a while.


Q40:What should I consider about the person to whom I am planning to disclose information?

Before disclosing information to anyone, even if they are prepared to sign an , you should think about that person's identity in order to satisfy yourself on the following:

  1. is the person someone to whom you want to disclose information at all – for example, is it a competitor or potential competitor on a fishing expedition?

  2. is the person likely to have the resources to meet a claim if it misuses information in of the or should someone else also be party to stand behind it?

  3. who controls the person and should they also be a party to the ?

You should get advice from a legal expert if you think someone else should also be a party to the . Only the person to whom you are planning to disclose information gives the in our template Non-disclosure agreement (NDA). For access to a specialist lawyer in a few simple steps, you can use our Ask a Lawyer service.


Q41:Should I be worried about the bad reputation of NDAs in the media?

Increasingly, the use of NDAs by has attracted bad press in the British media, with suggestions that the government may legislate to 'ban' NDAs. It is important to understand that this discussion is focused on the use of NDAs by to gag former , or to cover-up . There been no call in the Parliament for a blanket ban on any use of NDAs. Indeed, when used properly, NDAs will always be an important legal tool for businesses to protect confidential or sensitive information.

Unless you are using an to cover-up potential or to gag an individual from discussing or disclosing wrongdoing, there is no reputational risk for your business in using NDAs for genuine commercial purposes. Indeed, they remain one of the most common ways for businesses to protect their information during negotiations and meetings.


NDAs: Disclosing information without one
Q42:What if I disclose information to someone who has not signed an NDA?

If you have disclosed information to someone and do not have an in place, it will be much more difficult to pursue that person for misusing the information already disclosed.

If you wish to prevent a recipient who has not signed an from misusing your information unlawfully, or if you wish to claim from them for unlawful misuse, you will need to prove that the information was confidential and received under an obligation of secrecy.

In comparison, if you do have an in place and the person who receives information from you misuses it in of the , you will have a legal claim against the recipient (see Q&A 34).


Q43:Can I ask someone to sign an NDA after I have disclosed information to them?

Yes you can but you should avoid doing so as disclosing information before an is signed could cause you two potential problems.

If the person to whom you have disclosed information will not sign, it will be more difficult for you to pursue that person for misusing the information (see Q&A 48) although you can refuse to disclose any more information.

Even if the recipient will sign, you may have difficulty enforcing the , especially with regard to information you have already disclosed. In these circumstances you should pay a small sum to the recipient (such as £5) and refer to this in the . The template at Non-disclosure agreement (NDA) assumes that no information will be disclosed before they are signed, and therefore do not refer to any payment.


Q44:What should I do if the person I am dealing with refuses to sign an NDA?

This will depend on the sensitivity of the information you are looking to protect and the importance to your business of the meeting or negotiations. You will need to balance the potential benefits to your business of disclosing information versus the risks to your business of not having an in place.

  1. You may decide that it is too big a risk without an in place and not proceed any further with discussions.

  2. Alternatively, you may decide to go ahead with the meeting or negotiation but perhaps hold back some of the more sensitive information until you are comfortable with the person you are dealing with. For an initial meeting, for example, you may be able to limit what you disclose and be able to live for the time being without an .

You should be aware that some institutions do not sign NDAs as a matter of policy – for example, (see Choosing and approaching new share investors).


NDAs: Provisions to include
Q45:What provisions should I include in an NDA to protect my business?

A well drafted will typically include the following provisions:

  1. a clear definition of your business information which is being protected (see Q&A 36 and Q&A 37);

  2. agreement from the person receiving your information:

    1. only to use it for the specific purpose of your disclosure and not for any other reason;

    2. to keep it private and confidential and not to disclose it except as permitted under the , so that you control who else will have access to the information;

    3. to keep confidential details of the discussions between the two of you;

    4. to return or destroy the information on demand; and

  3. if there is to be a time-limit on the , what this should be (see Q&A 47).

Our template Non-disclosure agreement (NDA) contains these provisions. If you choose to create a one-way , you also agree to keep details of the discussions confidential in order to present a more balanced for signature.

Less common but sometimes included in an are from the recipient not to entice or customers away from the business being protected. See Q&A 46 for more guidance on these , which you will not find in our template.


Q46:Should I include undertakings not to solicit staff or customers in an NDA?

The purpose of including such in an is to guard against the possibility that discussions abort between you and the person who receives your information, and the recipient subsequently tries to solicit your or customers, or seeks to persuade customers not do business with you.

not to solicit or customers are not standard and must be justified by reference to your business, otherwise they will not be enforceable. They have not been included in our template Non-disclosure agreement (NDA).

You can expect a person whom you have asked to sign an to question in particular the inclusion of such and maybe to resist them altogether, so you must be able to justify them.

See Non-disclosure agreements (NDAs) for those to whom you disclose information for guidance on not to solicit or customers, and see Sale non-disclosure agreement for template , in the context of selling a business.


Q47: Should the NDA be subject to a time-limit?

There is no hard and fast rule as to whether or not confidentiality in an should be limited in time and, if they are, what the time-limit should be.

Recipients of information will commonly ask for an to be limited in time. Given this, before sending an you should think about what information you are seeking to protect and which, if any, of that information should be protected indefinitely. For example, whilst a list of suppliers might stop being confidential to your business after a fixed period and could be limited in time, details of valuable rights could justify indefinite protection.

You can find a template at Non-disclosure agreement (NDA). If you choose to create a one-way , the template includes an option for you to limit the in relation to confidential information for a specific number of years, with a further option to make the for specific information unlimited in time. If you do not include this option, the will be unlimited in time.

If you choose to create a mutual , to provide certainty for both parties, the template limits the for a period of two years.

If the recipient's confidentiality in a one-way are subject to a time-limit, the same time-limit should also apply to from your (for example, not to disclose details of the discussions). This is the case for the template which you will find at Non-disclosure agreement (NDA).


NDAs: Bringing a claim
Q48:What can I do if I think someone is misusing my business information in breach of their NDA?

Legal proceedings for of an are unusual.

As with any action for , if you are thinking of taking legal action you will need to balance the damage which the misuse is and will be causing to your business against the time and which you will inevitably incur.

In very general terms, there are two legal remedies available to you if the has been :

  1. an action for for losses suffered by your business. These could be difficult to quantify in the case of an which may be one reason why such actions are unusual; and

  2. an application to Court for an to stop the misuse. Such a remedy is at the discretion of the Court.

Either course of action will be expensive and you will have to prove to a Court that the person to whom you have disclosed information has acted in of your .

Even with an in place, think about any particularly confidential or sensitive information, the potential consequences if misused and therefore whether to hold this back.

You will nevertheless always be better off with, rather than without, a signed in place. Your information will be better protected and a formal letter to someone whom you suspect of an , with a threat of legal action, may work without having to incur substantial .


Selling your intellectual property
Q49:Can I continue to use my intellectual property if I have sold it or allowed someone else to use it?

You might decide to either:

  1. sell your ; or

  2. license it (allow someone else to use it).

When you sell outright, generally you are not permitted to continue using it yourself.

By contrast, licensing your does not generally preclude you from continuing to use it for other purposes.

If you and the person you are selling your to agree, you can set different rules for whether you are allowed to continue using the . For example, you could sell a design to a customer but you and the customer may agree that you can use the design for one more year after the sale. Alternatively, if you license your to a customer, you might agree not to grant a licence to anyone else (a ). You could also include a promise in the licence not to use the in your own work (an ).

Whether you retain the right to use the yourself can affect the price you can get for the purchase or use of your . If the customer is the only one able to use the , you will be able to charge them a higher price than if you or other people can also still use the same .


Q50:How will selling my intellectual property, or allowing someone else to use it, impact the rest of my business?

Giving control of your to someone else (whether permanently or temporarily), can have a large impact on the rest of your business. On the positive side, it can allow you to profit from the sale of the rights without assuming the financial and other risks associated with using it. For example, if you own a for a piece of industrial machinery, licensing that to someone else so that they can produce and sell it would allow you to profit from that even if you do not have the resources to produce the machinery yourself.

However, in some instances selling or licensing your rights can be problematic or harmful for the rest of your business. This is particularly the case if you have other which depends on the you are selling or licensing, or if giving someone else control of that piece of would allow them to compete with you more effectively. For example, if you own certain designs, which you sell to a competitor, they will be able to make and sell items using your designs, which may eat into your market as customers begin to buy your competitor’s products instead of yours.


Q51:How should I charge for the use of my intellectual property?

There are two common ways that businesses can charge for . The first option is to charge a fixed sum, either up front, or over time. For example, you could sell the to a photograph for £100, or you could license the use of software you create for £50 per month.

The second common way you might charge for your is to charge – a percentage of any profits which the customer might make using the . For example, you might sell a design for a chair to a customer in exchange for 50% of any profits they make when producing and selling a chair of that design.

are preferable when you expect that the person buying the will be able to make a profit from it. So an author selling the to their book to a publisher would usually charge , while a software developer making software would probably prefer to charge a fixed price, as are unlikely to use the software to make any profit at all.


Q52:How much is my intellectual property worth?

Valuing your can be tricky, as is by its nature intangible and unique. In summary, there are three main methods of valuing your . You could value your based on:

  1. how much it cost (or would cost) you to develop or create the from scratch;

  2. how much you estimate a competitor might pay for the , given the market price of similar ; or

  3. how much income or other economic benefits for your business your is expected to generate in the future.

Not all of these methods of valuation will be appropriate in every situation. For example, if your is not expected to make a great deal of profit on its own, but it is still a highly desirable piece of for competitors and it took a great deal of time and money to develop, then valuing the based on expected profit might lead you to underestimate its value.

If you are intending to license your for profit see Q&A 59 for more information on how to do so.


Q53:How can I protect my intellectual property if someone has a similar product?

If you become aware that another business has a similar product which may conflict with your rights, you can protect your by entering a with that person or business. See Q&A 54 for further information.

You should act quickly to protect your interests and prevent a dispute from arising, even if you have already taken initial steps to protect your (see Names and logos: Trade marks, Writing, music, pictures and code: Copyright, Designs: Design rights and Inventions: Patents for more information).

When another business develops a similar product or idea to yours, it can decrease the value of your , interfering with your opportunity to profit from it. There is also a possibility that the other business is infringing on your rights. In some cases, failing to respond to a potential infringement of your can even lead to you losing those rights altogether, eg if you do not put a trademark to good use within five years of it being registered, and someone else uses it.


Q54:Can I make an agreement about using intellectual property if someone has a similar product?

If you think that another business has a product similar to yours which might conflict with your , you can protect your by entering into a with that person or business.

A is a contract between two or more parties who have similar (for example business names, , , designs or ). The agreement governs how each of the parties will coexist without coming into conflict over their , setting out the obligations, conditions, rights and restrictions of each party. This allows them to continue with their respective businesses without the concern that they might be infringing on each other's rights.

Example: Karl's Café and Katherine's Coffee are coffee shops in neighbouring towns. Both owners are concerned about a dispute over as their businesses use very similar and colours for their branding. Instead of entering into an unpleasant and costly legal battle over use of their respective , both businesses sign a . The agreement specifies that Karl's Café must use the initials KC for their logo and red packaging only. By contrast, Katherine's Coffee must use the full business name in their logo and blue packaging only. Both also agree not to open any new branches in the town the other operates in.

For more information on , see Q&A 66 and following.


Q55:How can I protect my intellectual property if I need someone to repair it or do other work on it?

If you need to give someone access to your to repair it or carry out other work on it, and you want to keep that confidential, you could consider requiring that person to sign a non-disclosure agreement. This is a binding legal agreement in which you agree to grant someone access to certain information, and that person in turn agrees not to pass on that information to anyone else. If they do disclose the information, or try to, for example by making a copy of your secret and selling it to a competitor, you can sue them for compensation if you lose money because of their actions.

For more information on using a to protect and business information that is being disclosed to a outside your business, see Q&A 32 and following, along with a template at Non-disclosure agreement (NDA).

You should also only allow a person to work on your on the condition that you will own any contributions or new which they make as part of the repair. This will avoid the situation where someone (eg a ) who has carried out work on your creation owns the rights in relation to the repair they have carried out or the addition they have made.

For more information on how to safely give other people permission to use your , see Q&A 59.


Q56:How can I protect my intellectual property when I have commissioned someone else to produce a product for me?

If you need to give someone access to your to make a product for you, and that is intended to be confidential, you should consider requiring that person to sign a non-disclosure agreement. This is a binding legal agreement in which you agree to grant someone access to certain information, and that person in turn agrees not to pass on that information to anyone else. If they do disclose the information, or try to, for example by making a copy of your secret and selling it to a competitor, you can sue them for compensation if you lose money because of their actions.

For more information on using a to protect and business information that is being disclosed to a outside your business, see Q&A 32, along with a template at Non-disclosure agreement (NDA).

You should also only allow a person to access your to produce something for you on the condition that you will own any contributions or new which that person creates as part of the production process. This will avoid the situation where someone (eg a ) who has produced something for you from having had access to your owns the rights in relation to any resulting change or addition to the product made during the production process.

For more information on how to safely give other people permission to use your see Q&A 59. For more general information on created by your or commissioned for your business, see Names and logos: Trade marks, Writing, music, pictures and code: Copyright, Designs: Design rights and Inventions: Patents.


Q57:What is franchising?

is an arrangement whereby you give someone else a licence to operate a business which uses your business's name, , brand and . This is usually done in exchange for a percentage of the other business's profits, however occasionally a business may enter a arrangement under other conditions (eg for a flat fee at the beginning of the arrangement).


Q58:How can franchising affect my intellectual property?

is particularly complex in relation to , as you are letting someone else use your extensively. This could lead to issues when working out who owns developed by the business you to. New designs, inventions or written documents might be owned by you, the other business, by both of you, or you may each own a portion of the new work. Similarly, when making a , it can be very difficult to work out how much of your you should disclose to the other business, as there might be certain things you want to keep secret (eg product development techniques or unfinished projects). your business carries a large reputational risk, as you are allowing another business to operate under your name and branding. This means that your reputation can be seriously damaged by a business which is not fully under your control.

are often extremely lengthy and complex. This reflects the high risk associated with your business, as you should ensure you are properly prepared before giving anyone such a broad permission to use your . You should never enter into a without seeking the advice of a specialist lawyer about your particular situation. For access to a specialist lawyer in a few simple steps, you can use our Ask a Lawyer service. More detailed information about is currently beyond the scope of this service, but for more general information about allowing others to use your using a licence, see Q&A 59.


Licensing your intellectual property
Q59:How do I give someone else permission to use my intellectual property?

You can give someone else permission to use your by giving them a licence. A licence is an agreement whereby you allow someone else to use your , usually in exchange for payment or other promises on their part. A licence does not give the other party any ownership of your , it simply gives them permission to use your in a certain way. Licences generally do not have to be in writing, but it is best practice to agree the licence in writing, so that you have a clear record of exactly what the terms of the licence are. See Q&A 60 for details of what a licence agreement should contain.


Q60:What should a licence agreement allowing someone to use my intellectual property contain?

A single licence agreement could contain many different terms providing for many different rights and obligations. For instance, a (see Q&A 66) could form part of a licence agreement. Licence agreements can become particularly long and complex if the in question is important or valuable. You should be aware that if your licensing of a may cause a decrease in competition between businesses in your industry, restrict trade between countries, or is for too long a period, this could potentially competition law. If you are concerned you should seek advice from an expert on competition law. There are certain key points to consider in any licence agreement. In summary, these are:

  1. Who are you giving the licence to? Is this licence agreement aimed at a particular person, or a ?

  2. What does the licence refer to?

  3. What permissions are you giving to the other party? Are they being allowed to use the as they choose, or are they restricted to only certain uses (eg manufacture and distribution of products using your design, but not the development of further designs based on yours)?

  4. Is the other party allowed to sublicense the to anyone else?

  5. How will any fees or be calculated, and how and when are they to be paid?

  6. Are you allowed to continue to use the yourself? Are you allowed to give anyone else a licence relating to the in addition to the person or you are agreeing the licence with?

  7. Where does the licence agreement apply? For example, you might give the other person permission to make and sell products using your , but only if they sell those items in eg Bristol, as you intend to give someone else a licence to do so in other parts of the country.

  8. How long does the agreement last? Is there an end date, or will the licence continue indefinitely?

  9. Can either you or the other person withdraw from the licence? If so, under what conditions can the agreement be brought to an end?

  10. What insurance and other measures to mitigate risk are you or the other person required to provide under the agreement?

As the owner of the being licensed, you are usually in a position to determine the terms of any licence agreement. It can be complicated to write a licence agreement which covers everything you need, so many businesses prefer to consult a specialist lawyer, who will be able to write a suitable agreement for you. For access to a specialist lawyer in a few simple steps, you can use our Ask a Lawyer service. However, even if you rely on a lawyer to write your licence agreement, you should understand what a licence agreement of the sort you need will contain, as that will help you instruct the lawyer on how to write one specific to your situation.

There are special considerations to take into account if you are planning on releasing software on an licence. See Q&A 63 for an explanation of and Q&A 65 for a list of conditions the licence should meet.


Q61:Can I change the terms of a licence under which I allow someone else to use my intellectual property?

If you have given someone else permission to use your by granting them a licence to do so, and they have given you nothing in exchange, you are free to change the terms of the licence, so long as you give the other party a reasonable period of time in between telling them about the change and the change coming into effect.

However, if the other party gave you something in exchange for the licence (eg money, or a promise of ), there are only two ways you can change the terms of their licence:

  1. with the agreement of the other party; or

  2. by using a term in the existing agreement which explicitly grants you the power to make unilateral changes.

It is usually best to communicate about changes to a licence agreement in writing, whether you are negotiating to get the other party to agree or informing them of your choice to change a term of the licence unilaterally. This helps to avoid uncertainty if you ever need to work out exactly what the licence says.


Q62:Can I withdraw permission for someone else to use my intellectual property?

If you have given someone else permission to use your by granting them a licence to do so and they have given you nothing in exchange, you are free to withdraw that licence, so long as you give the other party a reasonable period of time in between telling them that you are revoking the licence and the licence actually coming to an end.

However, if the other party gave you something in exchange for the licence (eg money, or a promise of ), whether you can withdraw their licence to use your depends on the licence agreement itself. In summary:

  1. if the licence agreement says that you can revoke the licence, you are allowed to unilaterally end the licence, subject to any rules or conditions the agreement lays out for doing so;

  2. if the licence agreement says that the licence cannot be revoked, then you are bound by that and must continue to allow the other party to use your according to the agreement;

  3. if the licence agreement does not say anything about how or when the licence can be revoked, you can revoke it by giving the other party reasonable notice of your intention to do so. However, it is always best to ensure that the licence agreement properly deals with how the licence can or cannot come to an end, to avoid confusion. See Q&A 59 for more information on how to properly licence your to someone else;

  4. regardless of what the licence agreement says, you can withdraw the other party's licence to use your if they agree to let you withdraw that licence. However, you may have to give them something in exchange for their agreement (ie a payment to 'buy' their agreement) to this if the licence agreement itself would not normally allow you to bring the licence to an end.

To prevent uncertainty, you should communicate about bringing a licence to an end in writing, whether you are negotiating to get the agreement of the other party or informing them of your choice to revoke the licence unilaterally.


Q63:What is an Open Source software licence?

An licence is a software licence (permission to use the software) which, broadly speaking, requires the software to be released for free, along with its , which can be modified or redistributed freely. Prominent examples of software which use licences include Chrome and Firefox (web browsers), Open Office (an office software package), Ubuntu (an operating system) and MySQL Community (a software package).

There is no single licence, but instead a licence is considered if it meets a set of conditions (called the ) which are laid out by the (). The is an international non-profit organisation which regulates the and uses of the term ‘’ to describe software. If you want to describe your software as ‘’, you will need to ensure that you release it under a licence which meets the ’s requirements.

For more information on how to give others permission to use your software using an licence (including how to comply with the ) see Q&A 65.


Q64:Can I still protect my intellectual property even if I use an Open Source licence for my software?

Using an licence for your software does not mean giving up your right to protect your , as there are many situations in which you can and should try to do so. In particular:

  1. anyone who uses your in a way which the licence you provide it under may be infringing on your , and you can act to protect your accordingly.

    For example, if your licence says that derivative versions of the software must be released under a different name, anyone who releases a derivative version under the same name as your version will the licence and be infringing on your ; and

  2. anyone who builds software which mimics the function or appearance of your software without actually using the (eg replicating the program in another coding language) is most likely infringing on your . This is because they are acting beyond what (most) licences permit.

However, you should remember that the idea behind is to encourage sharing of . While it is perfectly reasonable to protect your to a certain degree, if you are particularly concerned about controlling exactly how your is used and who can use it, may not be the correct option for your business. If there are still elements of which you find appealing, you might consider adapting an licence to suit your needs. If your adapted licence does not meet the , you will not be able to describe your software as , and so you will have to find another way of describing and marketing your software, but this approach would allow you to pick and choose the aspects of which you find most appealing. For more information on licences, including an explanation of the , see Q&A 63.


Q65:What should an Open Source licence for my software contain?

Your licence agreement will have to meet a set of conditions called the (). Specifically, you must release the software under a licence which contains the following conditions:

  1. anyone is allowed to freely redistribute the software, whether on its own or as part of some other product. This means that you are not allowed to charge any sort of royalty or other fee for the redistribution of your , even if someone is selling it for profit as part of another product;

  2. the for the program must be released as well as the compiled form, either alongside the compiled program or in some other well-publicised location. You are not allowed to obfuscate the in any way or release intermediate forms (like the output of a or ) instead of the ;

  3. anyone is allowed to make their own software derived from your program's , or to make modified versions of your program. You must require that any derived or modified versions be released under the same licence as your software;

  4. the licence can prevent people from making modified versions of your program, but only if you instead allow files to be made using the , which allow users to modify the program at the time they install your software. It can also require that any software derived from your program's be given a different name or version number to your original version so that they are not confused for your program;

  5. anyone who uses your software or its may do so under the same conditions, regardless of who they are;

  6. anyone who uses your software or its may do so under the same conditions, regardless of the purpose they use it for. This means you cannot prevent the software being used for commercial purposes, for example;

  7. the licence must carry over to any person to whom the software is redistributed without the need for another licence to be given. This means that you cannot use any indirect means (like a non-disclosure agreement) to prevent further redistribution of your software or its ;

  8. the licence cannot be dependent on the software forming part of a certain product or package;

  9. the licence must not restrict what other software your can be distributed alongside. This means you cannot restrict your software to a particular platform or operating system, nor can you prevent it from being distributed alongside a competitor’s software;

  10. the licence must not require a certain technology or interface be used to download or run the software.

Although you could try to produce your own licence to meet these criteria, it is much safer and simpler to use an existing licence which has been approved by the Institute (who administrate the ) as . There are over 50 approved licences listed on the Open Source Institute website, which are listed by category so you can more easily find a licence which suits your needs.

Although describing all of the licences approved by the Institute is beyond the scope of this service, it is worth noting that the (), the most popular of the approved licences, contains a provision that any derivative versions of software released under the must also use the if it is distributed. This is intended to create a large body of publicly available software and code which cannot be used for exclusive or proprietary purposes. This type of licence is sometimes called a '' licence. Many of the other licences approved by the Institute also contain provisions, so you should be careful not to inadvertently select a licence if you think doing so would conflict with your business interests.


Q66:What is a coexistence agreement?

A is a contract between two or more parties who have similar (for example business names, , , designs or ).The agreement governs how each of the parties will coexist without coming into conflict over their , setting out the obligations, conditions, rights and restrictions of each party. This allows them to continue with their respective businesses without the concern that they might be infringing each other's rights. A will also help to ensure that costly legal disputes over rights are avoided (for more information on disputes over see Options for dealing with infringements to intellectual property).

Example: Karl's Café and Katherine's Coffee are coffee shops in neighbouring towns. Both owners are concerned about a dispute over as their businesses use very similar and colours for their branding. Instead of entering into an unpleasant and costly legal battle over use of their respective , both businesses sign a . The agreement specifies that Karl's Café must use the initials KC for their logo and red packaging only. By contrast, Katherine's Coffee must use the full business name in their logo and blue packaging only. Both also agree not to open any new branches in the town the other operates in.


Q67:When should I enter into a coexistence agreement?

If you think that another person or business is trading (or about to start trading) that has similar to you, for example a business name or product, you should consider protecting your by entering into a with that person or business.

When another business develops a similar product or idea to yours, it can decrease the value of your , interfering with your opportunity to profit from it. Furthermore, there is a possibility that the other business is infringing on your rights. In some cases, failing to act on a potential infringement of your can even lead to you losing those rights altogether.

Legal disputes can be extremely expensive and difficult, and should therefore be avoided where possible. A offers one way of protecting your without such costs and inconvenience.

Note that it will usually not be appropriate to enter a if you do not own the rights that are the subject of the agreement. For example, if you have commissioned someone to create a design for your business logo but have not had ownership of the logo transferred to you yet, and subsequently are aware of another business with a similar logo, you should not enter a until the ownership has been transferred to you. If you want to enter into a covering you do not yet own, you should consult a lawyer who will be able to advise you whether such an agreement is possible or desirable. For access to a specialist lawyer in a few simple steps, you can use our Ask a Lawyer service.


Q68:What should a coexistence agreement contain?

can be very complex, and as such you may want to have a lawyer produce an agreement for you which will cover the issues which are important in your particular case. For access to a specialist lawyer in a few simple steps, you can use our Ask a Lawyer service. However, even if you decide to consult a lawyer, it is important to fully consider for yourself the key issues regarding your coexisting with that belonging to another business when negotiating a . In summary, you should consider including the following points (although note this list is not exhaustive):

  1. clearly identify who is bound by the agreement;

  2. specify the that is subject to the agreement and therefore permitted to coexist, eg , and designs. You should also make clear whether the agreement only covers that already exists, or whether it also applies to any re-designing that may occur in the future;

  3. specify the that each party owns. As this is likely to be similar, it is a good idea to set out how the is similar and how it is different;

  4. specify the and alphanumeric telephone numbers each party agrees to the other using;

  5. state the obligations, conditions, rights and restrictions each party is subject to;

  6. specify the geographical places and commercial activities where coexistence is permitted. For example, if one business states that they will use their on 'electricals' and the other business wants to use theirs on 'portable electronic devices', it is unclear where products such as mobile phones would sit;

  7. specify a start date and (if applicable) an end date of the agreement;

  8. specify that the agreement can only be changed in writing with the consent of both parties;

  9. there may be changes in each party's business, or in the wider commercial world, that mean it becomes impractical for both businesses to function properly side by side. In order to deal with this possibility, it is a good idea to include a term in a whereby either party can withdraw from the agreement after giving the other party a specified amount of notice;

  10. include a term to review the agreement at a future date. This means that all parties can monitor how the agreement is working and whether it needs to be amended to reflect any changes, and if so how the agreement can be amended (eg in writing and with the consent of all parties);

  11. state that if one of the licence is deemed to be unenforceable, the rest of the agreement is unaffected and remains in force;

  12. clearly state the events in which a party can terminate the agreement, for example if one party becomes or infringes on the other's rights;

  13. set out how disputes should be handled and resolved. If you can avoid going to court to settle disputes and use other means instead, for example meditation or , you can avoid costly and lengthy ;

  14. state the law that applies to the agreement and the country in which any legal action should be brought in the event that a dispute does go to court (this is usually only necessary if you are making the agreement with a business which is based in or trades in another country); and

  15. ensure that the final agreement is signed properly by both parties, and both parties have copies of it for their records.