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NFP Resources – Intellectual Property

Protecting your not for profit organisation’s intellectual property

Intellectual Property’ is ‘the application of the mind to develop something new or original

‘property’-  just like other property, it can be owned, sold and transferred, leased or given away.

Types of intellectual property include:

  • patents (for new or improved products and services)
  • trade marks (for logos and brands)
  • registered designs (for the shape or appearance of a product)
  • plant breeder’s rights (for new plant varieties)
  • copyright (including software, databases, and other copyright works)
  • circuit layout design rights
  • Confidential Information – trade secrets, know how (including client lists, specifications, strategic and marketing plans).

What is Copyright?

Copyright is free and applies automatically when the work is created.

There is no registration system for copyright in Australia.

Copyright does not protect ideas, information, styles or techniques, names, titles or slogans.

There is no general exemptions from copyright law for not for profit organisations

Copyright – what does it protect?

Original works.

  • Literary works – eg. reports, journal articles, books
  • Computer programs
  • Compilations
  • Artistic, dramatic and musical works
  • Cinematograph films – eg visual images and scripts (separately) in a film, video or DVD
  • Sound recordings
  • Broadcasts – eg TV and radio broadcasters
  • Published editions – publishers

Copyright – who owns it?

  • Employees, created in course of employment: Owner – employer
  • Freelance photographers, engravers and people doing portraits: Owner – the freelance creator
    Commissioned work – person who commissioned work, has right to use for purpose commissioned but not ownership unless alter by agreement
  • Films:  Owner – Producer or person who paid for it to be made
  • Recordings: Owner – person who paid for it to be made
  • Some cases – performers recorded on sound recordings own a share
  • Works created for State, Territory or Federal Government: Owner – relevant State, Territory or Federal Government— material created, or first published by it or under its direction or control

HOWEVER, any rules can be altered by agreement.

Copyright and Moral Rights

Individual creators have moral rights, whether or not they own copyright.

These are the rights to:

  • Be attributed as the creator of the work
  • Take action if their work is falsely attributed as being someone else’s work
  • Take action if the work is distorted or treated in a way that is prejudicial to their honour or reputation

Trade secrets

What are a non for profit organisations ‘trade secrets’? Not generally known and developed through expenditure of time, effort. žTrade secrets give a competitive advantage.  Adequate steps are taken to maintain secrecy.

How to find them.

  • Talk to the right people. This would include: marketing people, —service providers, —research and development, computer programmers/managers, operational managers/supervisors
  • Ask the right questions. What would you not want your competitors to know? and why?

Then examine whether the necessary elements of trade secrets are present.

  • Where did the information come from?
  • Is it known by others?
  • Has any source code been disclosed outside the NFP?
  • Is any new product information, specifications sent out to service providers/clients/customers?
  • Is there an employee who could hurt the NFP by leaving to go to a competitor or set up on their own? How could he/she hurt the NFP?

Where to look

  • Bargaining tool – can be licensed or sold for financial gain – further NFPs objectives
  • Enables NFP to compete on the basis of the reputation associated with a product
  • Gives right to determine who can use the IP and how it can be used
  • Increases options if cannot afford to commercialise IP or position in market
  • IP can be used many times without being diminished – eg different licences based on geographical regions
  • IP laws reduce products and/or services being replicated and passed off
  • Opens new opportunities
  • Open opportunities for strategic partnerships
  • Improves operational, financial performance
  • Improves risk management

Top ten tips on protecting IP

Tip # 1 – Educate

Educate yourself and team on the basics of trademarks, copyrights, patent and trade secrets

Tip # 2 – Conduct an IP Audit

Defined: A systematic review of the IP assets owned, used or acquired by the NFP.

Purpose: uncover under-utilised IP assets, —identify any threats to the NFP, enables Board/ management to devise informed strategies that will maintain and improve the NFP’s position


1. Identify readily identifiable IP – internal assets

  • Registered trademarks, copyrights, designs or patents owned by the NFP
  • Licenses in (eg. domain names), licenses out, include cross-licenses
  • In-house work manuals, publications, training, databases, recipes/ formulations
  • Trade secrets, know-how or confidential information
  • Custom software

2. Identify external IP assets

  • NFP Brands, product brands,
  • goodwill, client loyalty
  • product certification, regulatory approvals
  • distribution contracts and networks, client lists
  • marketing and advertising programs

3. Assess what the NFPs legal rights are in relation to each item of IP identified Ascertain:

  • Whether the NFP owns the IP – see Questionnaire
  • If the NFP does not own it, whether the NFP has adequate rights over it
  • whether there are any restrictions affecting the NFPs ability to freely use the IP, such as joint ownership


  • Developed it in the course of the NFPs activities, by the NFPs’ employees and contractors?
  • Developed by an associated NFP legal entity?
  • Developed by another person or organisation and
  • sold or transferred to the NFP
  • sold or transferred to an associated NFP legal entity
  • licensed to the NFP
  • licensed to an associated NFP legal entity?
  • It is something that was learnt from publicly available resources?
  • It is something that was developed jointly with another person or organisation?

4. Understand what value/ advantage these rights give you

A good question to ask is how much will it cost to replace the item if it were lost, what is the expect income?

Tip # 3 Develop an IP Strategy

  • Consider ways you can use the IP system in your strategy
  • Integrate IP into your strategic plan/ business plan
  • Search databases and internet to ensure ideas are new and to avoid infringing others
  • Weigh the risks of registered vs unregistered rights

Tip #4 – Register your IP

Tip # 5 Ensure the NFP owns or has right to use

Employees – contracts

  • Ensure scope of employment clearly defined
  • Ensure obligations of confidentiality clearly articulated – sign non-disclosure
  • efined ‘intellectual property’ and ‘confidential information


Similar to employee, but also:

  • Rights must be transferred to NFP
  • Must be in writing signed by Contractor (creator)
  • [NAME OF CONTRACTOR] hereby assigns and agrees to assign to [NAME OF YOUR NFP] all right, title and interest in and to the [NAME OF THE WORK] and all intellectual property rights therein.
  • A non-disclosure agreement does not transfer IP
  • For contracts to develop computer software – ensure source code assigned

Ownership by a 3rd party

Ensure the NFP has the right to use the IP for its purpose

In contract:

  • 3rd part grants the NFP a licence to use the IP for [insert purpose]
  • Licence for NFP only, if need for other parties then need a ‘sub-licence’
  • If restrictions on use – must comply and must ensure sub-licensees comply
  • If head agreement, must not breach

Tip # 6 – use confidentiality/ non-disclosure agreements

Examine existing confidentiality/non-disclosure agreements

Be sure that appropriate confidentiality agreements are in place with third parties to protect trade secret information that must be released outside the NFP

Tip # 7 – Document licences and approvals to third parties

Have a documented system for granting licences and approvals to third parties and personnel responsible for implementing the system.

This allows the not for profit organisation to prove that an infringer did not have permission or consent to use IP.

Tip #8 – Protect your IP Internally

  • Implement a document management system
  • Educate employees about the risks and ramifications associated with unauthorised removal of IP
  • Implement sufficient IT security policies – use of storage devices, such as thumb drives and external hard drives
  • Implement an email monitoring system
  • Implementing appropriate internet security measures – eg webmail such as hotmail
  • Adopt a process of review when employees at or above a certain level

Tip # 9 Protect your IP online

  • As the stakeholder reach expands the NFP IP become more valuable – it then can be infringed by users anywhere in the world
  • Protect by taking measures to discourage misuse
  • Include section on website that specifically states terms and conditions for use of the NFPs material
  • Acknowledge IP the NFP uses by does not own
  • Use tools such as ‘watermark’ an image, identify copyright owners, its country of original and permitted uses
  • Use disclaimers as commencement of each section, or link to disclaimers

Tip # 10 Develop an infringement strategy

It involves a strategic assessment of your IP rights and setting parameters for beginning (and ending) infringement action.

Seek advise of your lawyer

Develop an infringement strategy that suits your NFPs needs and resources. Such a strategy should include:

  • Identification and awareness – identify, educate, record details
  • Proactive measures – eg software access codes or passwords
  • Detection methods – eg periodic review
  • Target selection
  • Budgets for infringement action
  • Clear goals

To discuss your project or legal needs please get in touch.