CONSULTING AND INTELLECTUAL PROPERTY

Intellectual property refers to creations of the mind: inventions, literary and artistic works, symbols, names, images and designs used in commerce.1 The term “intellectual property” is used essentially to indicate those industrial, scientific, artistic and other creations that can be legally protected. As a rule, ideas themselves cannot be protected, but their description or formal documentation can be. Various legal instruments are available for the protection of intellectual property, including copyright, industrial designs, trademarks and patents. In certain cases, several types of protection are available for a particular creation.

Copyright protection arises automatically from the moment of creation of the copyright work. Protection under patents, designs and trademarks, on the other hand, is subject to registration. The registration of a patent may take several years as patents are granted only after lengthy investigations. The owner of intellectual property may generally grant a licence permitting a third party to use intellectual property on agreed terms. In return, the licensee may agree to pay a lump sum or to make royalty payments. Protection is usually awarded on a territorial basis. Therefore, a firm that wishes to obtain patent or trademark protection in several countries will, as a rule, need to apply for protection in each country. However, certain international conventions, such as the 1989 Madrid Protocol relating to the international registration of trademarks, provide for a single international registration, although protection will be granted only in the countries designated by the applicant under the conditions set forth by the national laws of these countries.2 The cost of protecting intellectual property internationally can be substantial. For example, one company has recently spent some US$10.6 million to extend its trademark protection from North America and Western Europe to the rest of the world.3

Until recently, most management and business consultants had only vague notions of intellectual property issues and paid marginal attention to them. At best they tried to avoid infringing copyright when using publications and training material authored by others. Consulting contracts often included copyright-related and similar provisions that did not conform to legislation. Consultants involved in