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Summary

Intellectual property (IP) is the property of your mind, or proprietary knowledge, and can be a design, invention, brand, application of an idea, and more. There are four types of IP: trade secrets, patents, copyright, and trademarks. Trade secrets have been found to be the most effective tool in safeguarding intellectual property in the space industry. In practice, the rights granted by these IP mechanisms are transferable through licences.

Always check with the regulator for their latest official direction, guidance and information.

Contents of this article

What is IP?

Intellectual property (IP) is the property of your mind, or proprietary knowledge, and can be a design, invention, brand, application of an idea, and more.

There are 4 types of intellectual property:

  • Trade secrets
  • Patents
  • Copyright
  • Trademarks

Trade Secrets

Definition: Any confidential business information that provides an enterprise with a competitive advantage over another. They can be manufacturing or industrial secrets and commercial secrets.

The most common type of knowledge protected by trade secrets is ‘know-how’ (any unique knowledge and/or skills regarding manufacture, products, services, etc.). Know-how is likely the most significant proprietary knowledge that an Australian space entrepreneur will want to protect.

Why trade secrets?

A trade secret has a lower threshold than that of patents or copyright: the secret being protected does not have to be ‘novel’ or ‘inventive’, and it is sufficiently secret if the information has not moved into the public domain. Furthermore, a trade secret does not require registration like a patent, and so it cannot be easily overturned: in fact, a trade secret is often referred to as an unregistered patent. Consequently, a trade secret can be protected for an unlimited period of time.  Furthermore, a trade secret does not require disclosure of the information to a government authority, like a patent.

For more information on patents vs trade secrets, click here.

Trade secrets become so in a number of ways:
  1. Making information confidential by marking it as confidential or proprietary (not the same as a copyright notice)
  2. Obtaining non-disclosure agreements (NDAs) (also known as a ‘confidentiality agreement’) from relevant parties, agreeing to keep information confidential (this party cannot then claim they thought the information was public in the case of trade secret misappropriation)
  3. Restricting distribution of the secret, ensuring that only those people who have real need can access the secret (e.g. printing on coloured paper, indicating on electronic documents that they are not to be copied, printed or forwarded, passwords on computers, locked filing cabinets, and so on)

The use of trade secrets is common in the aerospace industry, although protection of trade secrets concerning outer space, space objects, and private or international space stations remains largely unregulated.

Important to know

If the cost of maintaining the trade secret is higher than its value, it is illogical to protect it via a trade secret.

For example, if the secret could be easily discovered by independent discovery, accidental disclosure, or leaks.  This is especially pertinent in larger enterprises, where multiple employees need access and there is a higher turnover of staff.

Trade secrets internationally

Although conditions vary from country to country, article 39 of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement) sets out general standards regarding ‘undisclosed information’:

  1. The information is secret in the sense that it is not generally known among or readily accessible to persons within the circles that normally deal with the kind of information in question;
  2. The information has commercial value because it is secret; and
  3. The information has been subject to reasonable steps under the circumstances to keep it secret.

The TRIPS Agreement is an international agreement between all the member nations of the World Trade Organisation (WTO). As Australia is a member nation of the WTO, one can expect that Australia’s domestic policies will reflect the TRIPS Agreement.

Trade secrets in Australia

Trade secrets do not have a settled legal definition in Australia. Despite this, the value of trade secrets is recognised both at law and in equity. In this situation, equity means a body of legal principles that operates concurrently with the common law on principles of fairness and conscience – for example, preventing ‘unjust enrichment’.

As trade secrets are recognised in Australia, restraints of trade can be legitimately used in order to prevent the disclosure of trade secrets, or to prevent the use of trade secrets by employees in any subsequent business or employment. For example, NDAs or signed assurances that the secret will not be utilised in further employment. If contravened, these restraints can be pursued in court.

As a member of the WTO, Australia is bound by the general provisions of the TRIPS Agreement, including mechanisms for administration and enforcement of rights and a rules-based system for the settlement of disputes (see Part III of the TRIPS Agreement).


Patents

Definition: a grant of protection for an invention by a government authority, giving the owner the right to exclude others from making, selling, or using an invention for a limited period of time in exchange for publishing and enabling public disclosure of the invention.

Patents internationally

The basic principles of the international patent regime is laid down in the Paris Convention for the Protection of Industrial Property and it is accepted worldwide. The Paris Convention regulates protection of ‘utility models, industrial designs, trademarks, service marks, trade names, indications of source or appellations of origin, and the repression of unfair competition.’ There is also a Patent Cooperation Treaty  (PCT) which is administered by the Worldwide Intellectual Property Organisation, which enables automatic registration between member states.

Characteristics of an invention under patent:
  1. The invention must be ‘eligible’, which includes any new and useful process, machine, manufacture or composition of matter, or anything new in any field of technology that is industrially applicable
  2. It must be ‘novel’ – the invention cannot be part of a prior creation (remember here that even if something is new to you, it may not be new globally, so you will have to conduct a search)
  3. The invention must be ‘non-obvious’ so that a person skilled in the field would not find out easily the way in which the invention works without additional information about it
  4. The invention must be ‘useful’ or practically applicable

Patents in Australia

Australia is bound by the Paris Convention and the PCT, and therefore its domestic regime is consistent with these treaties.

Important to know

Firstly, you cannot demonstrate, sell or discuss your invention in public before filing the application. If you do so, you likely will not get a patent. If you want to discuss the invention with employees or business partners, have them sign a confidentiality agreement.

Secondly, a patent application must be drafted and filed by a patent attorney, whose fees may range from $3000 to $15000 depending on the application.

A patent will give you the right to stop others from manufacturing, using and/or selling your invention in Australia without your permission, and let you licence someone else to manufacture your invention on agreed terms or take legal action against people who are using your invention without your permission. Australia grants standard patents and innovation patents.

Standard patent:
  • Requires an inventive step, may take six months to several years to be granted, lasts for up to 20 years. Cost: $370-$470 plus attorney fees.
Innovation patent:
  • Requires an innovative step, usually granted within a month of filing, lasts for up to 8 years. Cost:  $180-$280 plus attorney fees.

For a comprehensive list of difference between the two patents, see the patent section of the IP Australia website.

Before filing a patent, it is a good idea to file a provisional application. Provisional applications establish a priority date, which are useful if you need to prove you were first to create a new invention. Cost: $110-$210 plus attorney fees.

Important to know

An Australian patent only provides protection within Australia.

If you want protection elsewhere you can either file separate applications in each country, or file a single international application under the Patent Cooperation Treaty through IP Australia, which gives priority when the patent is registered in that country.

Cost: $370-$470 plus attorney fees.

A more detailed breakdown of prices can be found on the IP Australia website, here.

Challenges for the space industry

There are several industry-specific challenges in regard to space related inventions:

A major problem is enforcement of patent rights, due to the characteristic of space being the ‘province of all mankind’, as stated by the Outer Space Treaty. If everything in space is owned by mankind, how can one country or another ‘own’ an invention in space?

Jurisdiction in regard to inventions made in outer space is ambiguous – what if there is a situation where space activities are carried out by partners who are nationals of different states? Who can file for a patent? Is there priority for one over the other?

This problem has been resolved on the International Space Station by dividing the station into ‘elements’, and the country of inventorship will be determined by the ownership and registry of the Station’s element in which the invention has taken place (Article 21 of the Intergovernmental Agreement).

Another problem is how to deal with instance of temporary presence of spacecraft and other hardware on the territory of a third state (e.g. from where the launch is organised) when the technology they carry might be infringing patent rights registered in that third state.

There is naturally a higher level of publicity in space related enterprises. An information release about the invention might be enough to meet the criteria of disclosure, which renders the invention non-patentable.

Unfortunately many of these problems have not been resolved, especially in Australia where there are no provisions concerning the patentability of specifically outer space inventions, and neither do we have a temporary presence doctrine like the US, France, and others. These problems all have policy implications for many States, and it is something that could be further clarified specifically under Australian law.

Patents vs trade secrets

One of the major challenges to businesses regarding patents is the requirement that the patent be published, and competitors are able to access the invention, although not legally able to use the information until the patent runs out. Furthermore, once published, third parties may design around the patent or a third party from another country may use it (as patents must be filed in each country to be applicable, even with a successful PCT application).

Some entrepreneurs in the space industry therefore find that trade secrets can more effectively protect their interests for a number of reasons:
  1. Trade secrets do not require registration and therefore arise automatically without disclosure to a government authority
  2. Patent protection lasts from 8 to 20 years in Australia, while trade secrets can last indefinitely assuming appropriate steps are taken to ensure secrecy
  3. Preparing and filing a patent application can cost a significant amount of money, while there is no cost to a trade secret other than implementing confidentiality measures
However, it is true that there are also drawbacks to trade secrets:
  1. If the secret is part of a product, others may be able to reverse-engineer it and discover the secret, and therefore be entitled to use it (unlike a patent)
  2. Once the secret is in the public domain, anyone may use it at will
  3. A trade secret does not provide concrete legal protection like a patent, especially considering regulation varies significantly from country to country
  4. A trade secret may be patented by a third party who has developed the relevant information by legitimate means

 

Other IP mechanisms

The following IP mechanisms (copyright and trademarks) are legitimate means of protecting information, but are somewhat less applicable in the space industry.

Copyright

Definition: Copyright grants the creator of an original creative work exclusive publication, distribution, and usage rights.

Copyright generally does not apply to inventions such as have been described previously. Examples of copyrightable work includes pieces of writing, artistic works, and so on.

International regime

Article 2 of the Berne Convention for the Protection of Literary and Artistic Works describes the ‘creators doctrine’, which states:

  1. Only works that are intellectual creations of their authors are eligible for copyright protection
  2. Only ‘mode or form of expression’ is copyrightable (not ideas, processes, methods of operation, data, or material)
  3. Copyright protection does not require registration

Furthermore, the work must be an intellectual creation and fixed in material form.

Use Case: Databases

ANGELS Aerospace is an enterprise which analyses remote sensing data. It wants to know whether databases can be under copyright.

  • Copyright can be granted to databases if it fulfils the same criteria as individual works (intellectual creation and fixed in material form)
  • It is difficult to fulfil the creativity requirement (the database cannot use an alphabet or numbering system as this is not creative)

ANGELS Aerospace will have to ensure that it meets these requirements and use a creative system.

Note: the European Union has introduced copyright protection for unoriginal databases (which do not fulfil the creativity requirement) but it is the only jurisdiction to do so.

Australian regime

Australia is a member of the World Intellectual Property Organisation (WIPO), which administers the Berne Convention, and therefore its domestic regime is consistent with the Convention. Australian copyright law can be found in the Copyright Act 1968 (Cth) (AUS).

In Australia, copyright generally lasts for the life of the creator plus 70 years. If there is a dispute about who created something protected by copyright, it may need to be resolved by a court.

Note that the duration of copyright varies from country to country. Where, for example, material is to be reproduced or sold overseas, advice may be needed to determine whether relevant copyright material is still protected in that country, and therefore whether any permissions may be needed in relation to the use of the material in that country.

Trademarks

Definition: a recognisable sign, design, or expression which identifies products or services of a particular source from those of others.

The laws regarding trademarks will be relevant only if a space entrepreneur wishes to trademark its logo, a particular phrase or image, etc.

International regime

Australia is a signatory to the Singapore Treaty on the Law of Trademarks, which simplifies the process of obtaining rights internationally, setting limits on administrative requirements.

Australian regime

The main source of authority regarding trademarks in Australian law is the Trade Marks Act 1995 (Cth)(AUS). Applications for a trademark are made to IP Australia, and must provide a description of the goods or services you intend to use the trademark on. There are 45 classes of goods and services.

Before applying for a trademark you should ascertain whether you are trying to register a common or prohibited sign, word, or phrase. You should also search the relevant databases to ensure that you are not trying to trademark someone else’s trademark.


Licences

In practice, the use of exclusive rights granted by copyright protection and patents occur through licensing. Licensing in this sense means a person granting to someone else a limited right to do something.

Internationally, licensing conditions vary across jurisdictions so regulation is left to individual States, although there should be some level of consistency.

For a space entrepreneur, any copyrighted material or patented invention may be licenced to a third party in a number of ways.

In Australia, there are three types of licences:
  1. Exclusive licence: must be in writing and signed by the copyright owner. Electronic communications such as emails will generally satisfy this requirement. Under an exclusive licence, the licensee is the only person who can use the copyright material (even the original creator of the work can’t use it in the ways covered by the licence)
  2. Non-exclusive licence: grants to someone a licence to do something with the material. The original creator may continue to use the material in that way, and can also grant other people non-exclusive licences.
  3. Implied licence: implied from the circumstances. Per Copyright Agency Limited v New South Wales, ‘will only be implied where there is a necessity to do so’.

The owner of the work has complete discretion to grant or refuse a licence.

seek legal advice if:

If you expect to get something in return for the rights you are granting (e.g. payment) you will generally be entering into a contract, which must be in writing and signed by the owner before it is legally effective. You should always obtain legal advice before finalising any agreement or signing any document.

link sources

Visit the Department of Foreign Affairs and Trade website for more information Australia’s international responsibilities regarding IP:

https://dfat.gov.au/trade/organisations/wto/intellectual-property/Pages/intellectual-property.aspx

Visit the IP Australia website for more information Australia’s patent and trademark application process, as well as more general information about intellectual property in Australia:

https://www.ipaustralia.gov.au/ 

Frequently asked questions

Any confidential business information that provides one an enterprise with a competitive advantage over another.

They can be manufacturing or industrial secrets and commercial secrets. For example, trade secrets have been used by Coco-Cola for decades to ensure that its formula remains secret.

The most common type of knowledge protected by trade secrets is ‘know-how’ (any unique knowledge and/or skills regarding manufacture, products, services, and so on).

Generally, patents are filed for inventions which are either completely new, or the result of an innovative step furthering existing technology.

An invention must be a new and novel, process, machine, manufacture or composition of matter, which is non-obvious and industrially applicable.

There are pros and cons for both methods of protection:
  • Trade secrets do not require registration and therefore arise automatically without disclosure to a government authority
  • Patent protection lasts from 8 to 20 years in Australia, while trade secrets can last indefinitely assuming appropriate steps are taken to ensure secrecy
  • Preparing and filing a patent application can cost a significant amount of money, while there is no cost to a trade secret other than implementing confidentiality measures
  • If the trade secret is part of a product, other may be able to reverse-engineer it and discover the secret and therefore be entitled to use it (unlike a patent)
  • Once a trade secret is in the public domain, anyone may use it at will
  • A trade secret does not provide concrete legal protection like a patent, especially considering regulation varies significantly from country to country
  • A trade secret may be patented by a third party who has developed the relevant information by legitimate means
In practice, the use of exclusive rights granted by copyright protection and patents occur through licensing.

Licensing in this sense means a person granting to someone else a limited right to do something. For a space entrepreneur, any copyrighted material or patented invention may be licensed to a third party in a number of ways.

What to do next

1. Decide whether you have any products, designs, ideas, or technology which you believed needs to be protected

Assess whether it would be most appropriate for the work or creation to be a trade secret, patented, protected under copyright, or trademarked.

2. Obtain legal advice if necessary

Note that a patent can only be filed by a patent attorney, while trade secrets and copyright go into effect automatically. See ‘Getting Legal Advice’.

3. If you are interested in obtaining a licence, ensure you understand the different types and their obligations

Exclusive, non-exclusive, and implied licences carry different obligations on the original owner of the work and the owner of the licence.