posted 1 Feb 1998 in Volume 1 Issue 4
Protecting your Rights
Knowledge management is rapidly
becoming essential for any business which wishes to keep abreast of the market
and, more importantly, keep ahead of its competitors. The more knowledge a
company can use, the more it will succeed. But the real value of the knowledge
lies in exploiting it to the full and preventing its misuse, once it has been
gathered. Catriona Smith
a Partner at Allen & Overy looks at ways of doing
What is 'Knowledge'?
The word knowledge is hard to define. It probably includes data,
statistics, procedures, published literature, research results, precedents,
information about customers, competitors and the market, ideas and general
know-how. It may include inventions, particular ways of doing business and
computer systems. Some are tangible, some are intangible. There are many
different ways to protect them.
Copyright Ownership and
Copyright prevents unauthorised copying of works in material form, such
as articles, drawings, graphs, photographs and films. Copyright lasts for up to
70 years from the death of the author so even works produced in the nineteenth
century may still be protected.
Much of the knowledge you have will be
in concrete form, whether written, drawn, stored on computer or recorded on
tape. It cannot be copied except in accordance with the Copyright Act 1988. The
Act states that it is only the owner of copyright in a work or his licensee who
can copy the whole or a substantial part of a work. It is therefore very
important to know who the owner is, and what licenses he has granted, as
unauthorised copying can lead to damages, injunctions and adverse publicity, as
well as possible fines and imprisonment.
The first owner of copyright is the
creator of the work, unless they are employed. If they are an employee, the
first owner is the employer. Commissioning a work from an outside contractor
does not automatically give you the copyright in what they produce. That can
only be done in the vast majority of cases by an assignment in writing, signed
by the assignor. So if you ask outside consultants, such as graphic designers,
researchers or photographers to produce work for you, you will not own the
copyright in the work they produce. The consequence is that you will only be
able to copy that work if you have a written contract assigning the copyright to
you or, more probably, a license.
Licenses can take many shapes and
forms. They may be exclusive or non-exclusive, for a limited period, or for
limited acts. They may not be wide enough to permit storage on computer, or to
use the work in foreign countries. They may not allow you to translate the work,
or to make it into a film or video. If they are not written down, it is often
very difficult to work out what licenses do and do not allow, or even if one
exists at all.
Some things are allowed under the Act. You can make 'fair use'
of copyright material in some circumstances without a license. In particular,
you can copy some kinds of material for 'research or private study'. You can copy
all material, except photographs, to report current events, as long as you give
a sufficient acknowledgement. In both cases the use must be fair, which means
you cannot make multiple copies for internal or external circulation, and may
not be able to copy whole articles from journals even once. It is important,
therefore, to make sure that you have authority to make the copies you need and
to do what you wish them.
Of course it is just as important to make it clear to people who receive
copies from you, what they can and cannot do with them. If you are asked to
produce material for someone outside your organisation, it is very useful to
record the terms on which you are giving or selling it to them. You may wish to
spell out the fact that you are the copyright owner. You may also want to make
them agree, explicitly, that they will not do anything with the material which
you do not want them to do. That will make it less likely that arguments will
arise, and make it much easier to solve them if they do.
As the Copyright Act itself has fairly
limited exceptions from copyright infringement, many organisations such as Her
Majesty's Stationery Office have issued licenses allowing more generous copying
than the Act allows.
Others are also happy to grant one-off licenses in return for reasonable
payment, sometimes on the basis of no more than a phone call. If there is any
doubt, it is well worth checking, even on a no names basis, to see whether this
might be an option.
The Copyright Licensing Authority and the Newspaper Licensing Agency
represent bodies of publishers and newspaper proprietors respectively and will
give wider licenses on their behalf which go further than the fair use
provisions of the Act. They monitor use of copies by organizations and will sue
if they believe unauthorised copying is taking place, so it is sensible to take
a license if you think it appropriate.
Copyright in databases
Much of the knowledge
you have collected will be held in a database and have value through being in
one place, readily accessible to those who wish to use it.
Databases are protected by copyright
under the Act. The extent of their protection depends on when they were created.
What the relevant date of creation is can be hard to establish. Obviously many
databases are in a constant state of flux, so practically speaking this may be
hard to work out. Indeed, any one collection may have been created over a long
period of time, which will mean that some of it enjoys copyright protection and
some does not. A database created before 27th March, 1996 will automatically be
protected by copyright. Databases created after 27th March, 1996 will only be
protected by copyright if they are a collection of independent works, data or
material which are arranged in a systematic or methodical way and are
individually accessible electronically or otherwise. In addition, the author
must have used his own intellect in selecting or arranging the contents.
is now a new right in databases created after 27th March, 1996, known as a
database right. It exists if there has been a substantial investment in
obtaining, verifying or presenting the contents of a database. It covers
databases completed on or after 1st January, 1983 and lasts for fifteen years.
The right is owned by the person who takes the initiative and invests in
obtaining, verifying or presenting the contents of the database. If that person
is an employee, their employer will own the right.
The owner of a protected database can
prevent other people extracting or reusing its contents without authority. This
also means that they can benefit from their rights by licensing others to use in
return for a fee. It is not an infringement to deal fairly with the database if
it is for the purpose of illustration for research, and not for any commercial
purpose, as long as the source is indicated. For example, if you have access to
a library's catalogue index, you could use that index to explain how libraries
classify their books. You could not use it to create your own catalogue.
This law is very recent
and we will have to wait to see how it develops, but the new database rights are
an important additional protection for the store of knowledge you have.
The knowledge you have will to a considerable degree have been gathered
from internal sources and may be very valuable in its own right. If you are a
manufacturing company, your formulae and manufacturing methods may be highly
secret. If you are a computer software company, your source codes and ways of
writing new programs are obviously precious and need protection.
Whilst some information
is clearly confidential, much of the knowledge you gather will not be
confidential in its own right, as it may have been obtained from publicly
available sources. However, your collection of material is probably unique, and
very valuable as a result. Competitors and others would probably love to have
access to it. It is therefore worth safekeeping.
Confidential information, including
collections of material, is protected by the courts subject to certain
conditions. Broadly speaking, you must treat the information as confidential
yourselves, limiting access to it and making it clear to others, including your
own employees, the circumstances in which it can be disclosed.
You must make sure that
the recipient also knows it is confidential, and agrees not to use or disclose
it except with your consent. Unless this is clear, the value of your knowledge
may rapidly become eroded, as it is freely used by others. Whilst the courts
will not stop use or disclosure of information which is publicly available,
misuse of confidential information can be stopped by injunctions and past misuse
or disclosure can be compensated for by an award of damages. A recent law
commission paper suggests that it should become a criminal offence to misuse
confidential information to protect trade secrets, which will provide extra much
The knowledge you hold could be damaging to others, particularly if it
is wrong. If defamatory statements are made about a person or an organisation,
you might find yourselves on the wrong end of a libel or slander claim. Even if
you have only published material you have received from third parties, you will
be responsible in many circumstances for what that material says. Internal
communications within an organisation can also be defamatory, as one company
recently found to its cost when false rumours were spread on its internal
e-mails. You will not have problems if you can show that you were justified in
publishing the information, for example, because it was true or it was in the
public interest to do so, but such defences are often surprisingly difficult to
establish when it comes to the crunch. Prudence suggests, therefore, that use of
suspect information should be avoided, and intemperate language
Other laws to consider
Data Protection Act
No doubt you are aware
that personal data about living people can only be held on computer if you are
properly registered under the Data Protection Act. Broadly speaking you cannot
use that personal data unless you have told the Data Protection Registry that
you are holding it and why, and you only use it for those purposes. By October
1998, the same will apply to information held on manual records. The exact
details are still being discussed, but it would be wise to start treating all
personal data as if it were subject to the Data Protection Act now.
It is a
criminal offence to hack into a computer without authority, and to take
information from it, but the law has recently been weakened by a legal decision
that someone who had lawful access to the computer did not commit an offence
when he lawfully gained access to the computer and then misused it. It is
therefore sensible to make sure that your employees have an obligation in their
contract to behave appropriately.
The law can be your strong supporter,
to protect and benefit from your knowledge if you take a little effort to lay
the ground rules before problems start. I would recommend the following:-
||Keep your records in
good order and keep details of who has created them.
||Make sure your
employees know that information is confidential and must not be used or
disclosed without authority. |
||Check your contracts
with all outside suppliers of information to make sure you have authority
to deal with that information as you wish. |
||Tell you customers and
users of the knowledge what they may and may not do with it.
||Limit access to the
material where appropriate, for example by computer passwords.
||Control the content of
e-mails, both internal and being sent outside. |
||Put copying rules in
||Make it clear that
misuse will be treated seriously. |
Catriona Smith is a Partner at
Allen & Overy. She can be contacted at: firstname.lastname@example.org
||If all else fails,
take quick remedial action, through the courts if necessary, to stop the
damage from spreading. |
The information in this article is
general only. Rather than relying on it, please consult your lawyers in any