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All computer programmers, engineers, photographers, architects and artists invest considerable amount of time, effort and possibly money in the creation of their works, be it a picture or software code. It is thus understandable that such persons would seek to secure this investment thereby ensuring adequate protection for their final works. There again, significant profits can be made by securing the more important and expensive creations. Looking at the pharmaceutical or industry for example, patenting of new drugs, gives security to the company, that their investment in the creation of new drugs, cannot be stolen. The same applies in the technological industry, where for example, the patent disputes between Samsung and Apple over smart technology have stretched numerous jurisdictions, from North America to Asia. It is thus understandable and recommended, that proper intellectual property registrations are done, at the right place at the right time.
Trademarks- Copyright- Patents- Industrial Designs- Trade Secrets
While all forms of intellectual property rights are different in their form, their core purpose remains the same, the protection of the rights of the creator to prevent others from copying the creation or using such a creation for their own benefit, to the prejudice of the creator. However, understanding the fundamental difference between the types of Intellectual Property rights is essential.
One can practically distinguish between five primary Intellectual Property Rights as illustrated below:
Trademarks: Trademarks are essentially marks, logos or brand names which identify a particular person, entity or even a product or product range. Trademarks may consist of shapes, pictures, colors, names, words, numbers or symbols so long as the final mark is identifiable and distinguishable. Trademarks are important since they identify products and services of a seller in the market and guide consumers to the seller simply through the brand name and reputation of the seller. Trademarks are normally registered to obtain formal recognition although some jurisdictions provide a limited form of protection to unregistered Trademarks through prior use.
Copyright: Copyright, is a right granted to the creator of a work, upon inception, so long as such a creation is fixed on a tangible medium and is deemed to be an original work. Copyrightable works include paintings, photographs, software code, books, articles and other similar works. In some jurisdictions, more exotic works where deemed to be copyrightable like the smell of a perfume. In principle, copyright is granted on the creation of the work, however some jurisdictions provide for optional additional registrations as well.
Patents: Patent protection is granted to inventions should the invention satisfy the general requirements of patentability which generally involve that the creation is novel, non-obvious and which is useful or which have an industrial application. Patentable objects vary depending on jurisdictions and thus what is patentable in the United States is not necessarily patentable in the European Union. While this is true for most intellectual property types, such distinction is more evident in patent registrations.
Industrial Designs: In essence, designs are ascetic aspects of an object or a thing, in either two dimensional or three dimensional format, would include its shape, lines, patterns, contours, material and the color of the item. Design protection can be granted to a number of different products varying from electronic devises, to containers and jewelry, however, for a design to be registerable, the design would need to be in essence new. Protection to industrial designs is granted in most countries, upon registration and in some cases, the protection granted might also overlap over copyright protection.
Trade Secrets: Trade Secrets are commercially sensitive information usually a process, a method, practice or formula which are not known to the public. Such information is valuable to the owners of such information however, should this information not fall under other protectable Intellectual property, no official legal protection can be granted and the owner of the information must keep such information confidential to ensure its protection.
Why register your Intellectual Property Rights?
As a general principle, Intellectual Property Right protection, grants the holder of the right, exclusive protection on the creation so as far that, third parties, cannot use the creation of the creator without the permission of the creator, which is usually granted through a license from the creator against the payment of a fee in the form of royalties. A license would allow a third party, to utilise the creation against the payment of a royalty, with the creator keeping exclusive rights on the creation.
Registration is usually affected in the jurisdictions where the creation shall be mostly used. Thus if a company is planning to mainly deal in certain countries, it would obtain trademark registration in such countries. However, it is a common practice, that although that registration on the Intellectual Property is affected in the subject jurisdictions of use, the holder of the right would be an entity in other jurisdictions for numerous reasons, usually for logistical, asset protection and tax reasons so that in the event that a group of companies have numerous registrations in Intellectual property rights, such assets would be separated from other group assets through a separate legal person and also so that all royalty fees as centered into one tax efficient structure.
Malta offers a very tax efficient system whereby, companies in Malta which serve as holding companies of Intellectual Property Rights are only subject to an effective tax ranging from 0% to 6.25%, through the tax refund system, with a possibility to apply for a full tax exemption under one of the many pro-business schemes existing under Maltese Law.
Malta is also one of the only jurisdiction in the world which applies the full imputation system, implying that dividends paid by a company resident in Malta will carry a tax credit equal to the tax paid by the company on the profit out of which the dividends are paid No further Maltese tax is due by the shareholder on a distribution of dividends made by a company registered in Malta. In addition Malta has over 68 double taxation treaties worldwide making Malta a perfect jurisdiction for holding Intellectual Property.
Dr Josef Cachia is the Legal Advisor of KSi Malta and may be contacted on his email email@example.com.
This article was published in The Times of Malta on 18th May 2015.
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