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Feature

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 that.

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 Licenses

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.

Database Rights

There 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.

Confidential Information

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 needed protection.

Defamation

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 discouraged.

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.

Computer Misuse Act

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.

Conclusion

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 place.

Make it clear that misuse will be treated seriously.

If all else fails, take quick remedial action, through the courts if necessary, to stop the damage from spreading.