In the past 20 years, over 200 Designers’ Institute Members have received free legal consultations on subjects spanning a full range of commercial issues including; 

• Business sales and acquisitions
• Defective products and services
• Copyright and IP issues
• Employment issues
• Health and safety
• Disputes
• Debt recovery
• Product licensing and distribution
• Joint ventures and collaborations
• Business formation

The feedback to DINZ from Members who have benefited from complimentary legal advice has been exceptionally positive.

Whilst initial free consultations don’t include detailed legal services (e.g. contract reviews), the Lane Neave team have a very good success rate for resolving issues and providing direction and clarity for designers needing assistance on legal issues. 

Consultations must be arranged through DINZ Head Office - cathy.veninga@dinz.org.nz

In 2024, Clendons Lawyers (a long-time sponsor and supporter of the Designers Institute) joined forces with Lane Neave, a national law firm with offices in Auckland, Wellington, Christchurch and Queenstown. 

Lane Neave has assumed the role as sponsors and honorary solicitors for the Designers Institute, and continues to provide support to the Institute and its members.

James Carnie - Lane Neave

As your risk Partner, Long Burroughs are focused on RISK.

That means whist they can facilitate the placement of bespoke insurance policies; their true value comes from sharing our experiences as both an adviser and business owners.

Conducting contract reviews, considering business / JV structures and assisting with business strategy decisions from an insurance context are all value-add services they offer which we encourage you to utilise.

Many of you will be familiar with their insurance scheme of Spatial Designers however their services go way beyond this one specialism.

The Long Burroughs team have specific experience in placing all types of insurance and providing bespoke advice and solutions for DINZ graphics, digital and industrial design community including the following:

Business Insurance
Professional Indemnity
Cyber
Property
Business travel

Health & Life
Group Health and life plans
Key Person
Buy / Sale Agreements
Private Health and Life

When it comes to managing risk for your business including health and wellbeing, the team at Long Burroughs advise and design an insurance programme that fits your individual requirements.

Photo: James Carnie - Lane Neave

There is increasing awareness of the value of intellectual property rights, including recognition that innovation and design can create specific demand, influence consumer preference and generate ongoing product/brand loyalty.

Owners and creators of intellectual property rights will often seek to use those rights for their economic benefit.  This can include immediate and ongoing benefits, such as trading or licence revenues, as well as future benefits (trade sale, IPO or otherwise) on exit.

This article discusses some important considerations when commercialising intellectual property.

The first step (and an important one) is to identify the IP that will arise in the course of the venture, and to assess how that IP is to be defined and protected, used for commercial gain, and then (in most cases) transferred by sale or licence for gain on exit.

Most ventures will own copyright and trademarks, and ventures giving rise to inventive business solutions might also have patentable rights. Specific protection is available for new product designs under the Designs Act. The IP will often include valuable know-how accumulated within the venture, and proprietary information (i.e. information that the venture is entitled to regard as its property, generally being secret and the product of the venture’s work effort) which can include customer lists, operating manuals and manufacturing techniques.

Future improvements to the IP can arise from a variety of sources, including licensees/franchisees, manufacturers, contractors and employees.  Business contracts should, where appropriate, secure rights to own/use these improvements.

Businesses choosing not to secure their IP at the outset risk losing any possible monopoly rights through public disclosure and may have less ability to protect the IP in the event of challenge or misappropriation. Whilst this may not greatly alter the operating profits in the venture (at least initially), the loss of control over the IP will be felt when attempting to exit the venture or form collaborative arrangements (including raising capital), or if copycat competitors emerge, upon the defection of key employees or contractors.

It is important to get ownership and trading structures ‘right’ from day one.  For example, the costs incurred in seeking to recover/preserve key IP if disputes arise with business partners (including opportunistic profiteering) will greatly exceed the costs of protecting that IP at the outset.  Indeed, proper structures can prevent the motivation for such disputes arising at all.

The separation of IP ownership from trading risks is also beneficial, where possible.

The strategy for making commercial gain from IP will vary depending on the specific circumstances, including:

• The product/industry type.
• Market dynamics and entry/exit barriers.
• Capital requirements and sources.
• Risk appetite.
• Immediate/long term objectives, notably exit strategy.
• Revenue streams and costs.

Depending on the particular venture, a strategic evaluation may lead to differing structures, for example licensing, franchising, joint venture or partnership.

In most commercial IP arrangements – for example licences – key issues between business partners, apart from monetary commitments, will include:

(a)        Exclusivity
(b)        Territory
(c)        Marketing and sales performance – for example the duty to generate demand/turnover in the licensed territory
(d)        Financial reporting and data availability – including audit rights
(e)        Duration and termination
(f)         IP registration/filing/protection obligations and costs
(g)        Performance obligations
(h)        IP warranties and indemnities, if any
(i)         Quality standards
(j)         Representations to consumers
(k)        Relative contributions to the business model.

Careful consideration should be given to the support provided to licensees, to ensure that there are real incentives to achieve objectives. Having the business structure and documentation well prepared is essential, to ensure that licensees are motivated and do not become disenfranchised or disinterested in the venture.

Much has been written about the success of design-led businesses, particularly in New Zealand where our geographic isolation and exclusion from dominant global markets increase the importance of product differentiation and reputation.

Branding can also play an important overall role in a successful IP strategy. The brand of a product or service, and controlling the appearance of that brand to end consumers, is vital in securing the overall value of the venture’s IP. Clever and well thought-out slogans often supplement trademarks in forming part of the brand.

Contracts with business partners should impose appropriate branding obligations to promote the brand – for example the obligation to attach prescribed trademarks or labels, or to not remove or alter trademarks or labels already attached.

Branding and labelling can include appropriate IP notices – for example ©, ® or TM, patent or design registration number – which signify ownership and indicate an intention to protect the IP using relevant laws.

There are important differences in the way various countries treat IP, from recognition of differing rights, to varying registration regimes or requirements. Various other strategic and cross border issues – commercial and legal – will also be relevant.

For example, when licensing products into some territories, it is unlawful to exclude all warranties in favour of the licensee. Such ‘limitations’ will be viewed as ineffective at law.  There are, however, statutory minimums that can be adopted.

It is important to take advice from experts in the relevant territories. Partnering with local advisors that are members of international networks can assist.[1]

A key part of a successful strategy to successfully utilise IP is analysing the intended market(s) and adopting appropriate product offerings and business partner relationships.

The early identification of business partners capable of assisting, particularly those with established business networks or complementary goods and services, can provide valuable local assistance and contacts.

An analysis should include assessing key market players – including prospects – barriers to entry, regulatory and political risks, and demand factors.

New Zealand Trade and Enterprise can provide some valuable assistance in overseas markets.  For international business models, NZTE provides a range of services to accelerate market entry and international business growth, including its ‘beachhead’ programme.

By taking appropriate IP protection and commercialisation steps, the current and future prospect for making commercial gain from IP can be greatly enhanced. Although set-up costs may need to be incurred at an early-life stage of the venture, the return on that investment can be handsomely rewarded both during trading and on exit.

This background article by its nature cannot be comprehensive and cannot be relied on by any client as advice – its purpose is to help clients identify legal issues on which they should seek legal advice.

Please consult the professional staff of Lane Neave for advice specific to your situation.

[1] Lane Neave is a member of ICLA: see https://icl-alliance.com/