IP & Technology Licensing Legal Services | Technology Lawyer Australia |

Intellectual Property and Licensing in the Digital Economy

In technology businesses, intellectual property is frequently the principal - sometimes the only - asset of real value. The code, the algorithms, the data architectures, the brand: these intangibles determine competitive position and command valuation multiples. How they are protected, licensed, and commercialised shapes business outcomes more decisively than almost any other legal consideration.¹

Innovators that engage early in considering their IP rights show more innovations, more commercialised products and enhanced lifetime value to their IP². It is in this critical early stage that Daimon Legal can provide guidance and sound legal advice based on decades of experience.

TLDR:

• IP is often the most valuable asset in technology businesses - your protection strategy directly impacts company valuation and competitive position
• IP protection spans patents, copyright, trade marks, and trade secrets - each regime offers distinct advantages and limitations for different technology assets
• AI-generated inventions face uncertain treatment under Australian law; IP Australia has already indicated that AI cannot be named as an inventor under the Patents Act 1990 (Cth)
• Software licensing has evolved beyond perpetual models - SaaS, usage-based, and hybrid arrangements each create distinct legal architectures requiring careful structuring
• Open source compliance is non-negotiable; virtually all modern software incorporates open source components carrying licence obligations that affect commercialisation

IP strategy in technology contexts presents distinctive challenges and depends on jurisdiction in many cases. Traditional IP frameworks developed around physical goods and established industries; applying them to software, machine learning models, and blockchain protocols requires adaptation and creativity.³

The line between protectable innovation and unprotectable idea is often blurred. Trade secret protection may be preferable to patent disclosure. Open source licensing creates opportunities and constraints unknown in traditional IP practice.

Daimon Legal advises technology companies and startups on IP strategy across this complex landscape - from protection and enforcement to licensing and commercialisation. We have deep experience in commercial IP and licensing and are one of the few law firms in the world to develop and innovate open source models.

The Australian IP Framework for Technology

Australia's intellectual property regime comprises several distinct statutory frameworks, each offering different protection mechanisms for technology assets.

The Copyright Act 1968 (Cth) provides automatic protection for original literary works - a category that includes computer programs.⁴ Copyright subsists without registration upon creation of an original work, protecting the expression of ideas rather than the ideas themselves. For software, this means the specific code implementation is protected, but the underlying algorithms or functional concepts generally are not. Copyright protection lasts for 70 years after the author's death, or 70 years from publication for works of corporate authorship.⁵

What You Need to Know: Copyright protects your source code automatically upon creation - no registration required. However, copyright only protects the specific expression, not the underlying functionality. It is difficult to prevent a competitor who independently develops software achieving the same result through different code. So if protecting functional innovation is critical for you, consider patents as complementary strategy.

The Patents Act 1990 (Cth) enables protection of "manner of manufacture" - a deliberately flexible concept that Australian courts have interpreted to include computer-implemented inventions where they produce a "concrete, tangible, physical or observable effect."⁶ Patent protection requires novelty, inventive step, and utility, and lasts for 20 years from the filing date (or 25 years for pharmaceutical substances).⁷ Unlike copyright, patents require formal application and examination by IP Australia.

The Trade Marks Act 1995 (Cth) protects brand identifiers - words, logos, sounds, scents, and other signs capable of distinguishing goods or services.⁸ For technology companies, trade mark protection extends to product names, service identities, and distinctive visual elements. Registration provides exclusive rights to use the mark in relation to specified goods and services classes, renewable indefinitely in 10-year terms.

Trade secrets - confidential business information deriving value from its secrecy - receive protection under equitable doctrines and, in some circumstances, contractual arrangements, rather than specific legislation. For technology companies, trade secret protection may be preferable to patent disclosure where the innovation is difficult to reverse-engineer and ongoing confidentiality is achievable.

Software Licensing Structures

Software licensing has evolved dramatically from the perpetual licence model that dominated early decades of the industry. Today's licensing landscape encompasses subscription models, usage-based pricing, freemium strategies, and hybrid arrangements that blend multiple approaches. Each model creates distinct legal architecture and commercial dynamics. These models will directly affect your Terms of Service and marketing collateral too.

The choice of licensing structure has consequences beyond revenue recognition. Subscription models require attention to renewal mechanics, price adjustment rights, and exit provisions. Usage-based models demand clear definitions of metered units and robust measurement mechanisms. Freemium approaches must navigate the boundary between free and paid tiers without creating upgrade friction or enabling value extraction without payment.

For those projects and businesses that support open source models, Daimon Legal has experience in developing dual licensing models and can provide detailed guidance in this tricky area.

What You Need to Know: Your choice of licensing model isn't just a commercial decision - it creates legal architecture that affects everything from liability exposure to IP ownership disputes. Usage-based models need clear descriptions of the pricing units and dispute resolution mechanisms to respond to those (hopefully!) rare occasions when disagreements occur. Get the legal foundation right before scaling, not after.

Our lawyers draft software licence agreements that implement your preferred commercial models while addressing the legal considerations - warranty limitations, liability caps and indemnities, IP ownership, data protection and privacy - that protect the licensor and satisfy sophisticated licensees in the retail and enterprise levels.

SaaS and Cloud Agreements

Software-as-a-service has become the delivery model for business software, yet SaaS agreements present legal considerations absent from traditional software licensing. Vendors retain control of the software while the customer accesses functionality rather than possessing code. This fundamentally alters the risk allocation between parties.

Service level commitments take on heightened importance when customers cannot self-host as a fallback. Data handling provisions must address not only privacy compliance under the Privacy Act 1988 (Cth) but also data portability, exit assistance, and post-termination data return or destruction.⁹ Security obligations reflect the reality that vendors hold customer data in multi-tenant environments.

Enterprise customers increasingly demand substantial negotiation of "click-through" terms, while SaaS vendors seek to maintain scalable contracting processes. The tension between customisation and efficiency is a recurring theme in SaaS commercial practice.

Daimon Legal assists both SaaS vendors structuring their standard terms and enterprise customers negotiating agreements that address their risk and operational requirements.

IP Protection for Emerging Technologies

Artificial intelligence, blockchain, and other emerging technologies create novel IP questions that existing frameworks address imperfectly at best.

Can machine learning models be patented? The answer varies by jurisdiction and turns on how claims are drafted. Models that solve technical problems in novel ways may be patentable; those that merely automate mental processes likely are not.¹⁰ The distinction is frequently unclear at the margins. Australian courts have held that a mere scheme or abstract idea is not patentable, but a computer-implemented method producing a technical effect may qualify as a manner of manufacture.¹¹

What You Need to Know: IP Australia's guidance on AI inventorship is clear: under current Australian law, an AI system cannot be named as an inventor on a patent application. The Patents Act 1990 (Cth) requires a human inventor.¹² If your AI system generates potentially patentable innovations, establish clear protocols for identifying the human contributors who directed, trained, or refined the AI's outputs - they may qualify as inventors.

Who owns AI-generated outputs? When an AI system produces content, designs, or inventions, traditional authorship and inventorship concepts - which assume human creators - provide uncertain guidance. The Federal Court in Thaler v Commissioner of Patents [2021] FCA 879 held that an AI system cannot be an inventor under the Patents Act 1990 (Cth), a decision upheld on appeal.¹³ Similar questions arise for copyright in AI-generated works, where the Copyright Act 1968 (Cth) requires a human author for copyright to subsist.

How should training data rights be structured? AI systems require vast datasets for training; the rights to use, modify, and learn from data are increasingly valuable and increasingly contested. Licensing arrangements must address whether model training constitutes reproduction, whether trained models constitute derivative works, and how outputs generated from trained models may be used.

Daimon Legal advises on IP strategy for emerging technologies, helping clients navigate these unresolved questions while building defensible positions.

Technology Transactions

Technology M&A and asset transactions require specialist expertise that general corporate lawyers may lack. IP due diligence for technology companies must examine not only registered rights but also ownership chains for code contributions, open source compliance, and the adequacy of trade secret protection. A defect in any of these areas can fundamentally impair transaction value.

What You Need to Know: In technology M&A, IP due diligence failures destroy value. Common issues include: employee and contractor IP assignment gaps, undocumented open source usage triggering copyleft obligations, lapsed trade mark registrations, and inadequate trade secret protection. These defects often emerge only after completion - by which time they've become the buyer's problem. Rigorous pre-transaction IP audit is essential.

Post-transaction arrangements present their own complexities. Technology carve-outs require transition services agreements and ongoing licence arrangements. Joint ventures demand careful allocation of background IP, foreground IP, and commercialisation rights. Spin-offs must establish clean IP separation while preserving necessary cross-licences.

Our lawyers handle technology transactions from initial due diligence through post-completion implementation, addressing the IP-specific issues that determine whether deals deliver their intended value.

Open Source Compliance

Open source software is ubiquitous in modern technology development. Virtually every software product incorporates open source components, often through multiple layers of dependencies. Each component carries licence obligations that may affect how the incorporating product can be distributed, commercialised, and licensed.

Copyleft licences like GPL require that derivative works be distributed under the same terms - a requirement with significant commercial implications for proprietary software vendors.¹⁴ Permissive licences like MIT and Apache impose fewer restrictions but still require attribution and may include patent grants with broader effects than developers anticipate.

Daimon Legal assists with open source compliance programs - establishing policies for component selection, implementing review processes, and remediating compliance issues when they arise.

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Technology IP Protection Checklist

The following checklist provides a practical framework for technology companies seeking to establish robust IP protection. It addresses the key considerations across patents, copyright, trade marks, trade secrets, and commercialisation arrangements.

Patent Strategy

• Conduct freedom-to-operate analysis before product launch to identify potential infringement risks
• Establish invention disclosure processes to capture patentable innovations from R&D teams
• Evaluate patent vs trade secret protection for each significant innovation based on reverse-engineering risk
• File provisional patent applications within 12 months of any public disclosure or commercial use
• Assess international filing requirements based on target markets (PCT applications, regional filings)
• Monitor competitor patent activity and prosecution histories in your technology space
• Document the inventive contribution of human developers where AI tools assist in innovation

Copyright Protection

• Ensure employment contracts include comprehensive IP assignment clauses compliant with the Copyright Act 1968 (Cth)
• Obtain written IP assignments from all contractors, consultants, and third-party developers
• Implement version control and code repository practices that demonstrate authorship and creation dates
• Register copyright in significant works with the US Copyright Office if US enforcement may be required
• Establish policies for employee-created works, including works created outside employment duties
• Document the human authorship contribution for works involving AI-assisted creation

Trade Mark Strategy

• Conduct comprehensive clearance searches before adopting new product or company names
• File trade mark applications with IP Australia for core brands, product names, and logos
• Establish international trade mark protection in key markets through Madrid Protocol or direct filing
• Implement brand usage guidelines and monitor for unauthorised use or infringement
• Maintain renewal calendars and ensure timely renewal of registered marks
• Consider defensive registrations in adjacent classes where brand extension is possible

Trade Secret Protection

• Identify and catalogue confidential information constituting trade secrets
• Implement technical access controls limiting trade secret access to need-to-know personnel
• Require confidentiality agreements from all employees, contractors, and business partners
• Conduct exit interviews and enforce post-employment confidentiality obligations
• Document trade secret protection measures to support enforcement if misappropriation occurs
• Establish clean-room procedures where reverse engineering of competitor products occurs

Licensing and Commercialisation

• Develop template licence agreements for each commercial model (subscription, perpetual, usage-based)
• Establish open source component review and approval processes before incorporation
• Audit existing products for open source compliance and remediate any licence violations
• Define standard positions on key commercial terms (liability caps, indemnities, warranties)
• Create escalation processes for non-standard licence negotiations
• Document all inbound licences and track renewal and termination dates

Due Diligence Readiness

• Maintain organised IP registers with registration numbers, filing dates, and renewal deadlines
• Preserve complete chains of title from inventors/authors through to current ownership
• Document open source bill of materials for all software products
• Retain executed copies of all IP assignments, licences, and related agreements
• Prepare IP summaries suitable for investor or acquirer due diligence review

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How Daimon Legal Can Help

Protecting and commercialising technology IP requires lawyers who understand both the legal frameworks and the commercial realities of technology businesses. Daimon Legal provides strategic, practical advice across the full spectrum of IP and licensing matters.

IP Strategy and Portfolio Development We work with technology companies to develop comprehensive IP strategies aligned with business objectives. This includes identifying protectable assets, selecting appropriate protection mechanisms (patent, copyright, trade secret, or combination), and building IP portfolios that support commercialisation goals and enhance company valuation.

Patent Prosecution Support We advise on patentability assessments, draft patent specifications in collaboration with patent attorneys, and develop prosecution strategies for computer-implemented inventions. Our understanding of how Australian courts interpret "manner of manufacture" helps clients secure meaningful patent protection for software and AI innovations.

Software and SaaS Licensing We draft and negotiate software licence agreements across all commercial models - perpetual, subscription, usage-based, and hybrid. For SaaS vendors, we develop scalable standard terms that address service levels, data handling, security, and liability allocation. For enterprise customers, we negotiate agreements that protect operational requirements and manage vendor risk.

Open Source Compliance Programs We help technology companies establish open source governance frameworks - from component selection policies to compliance audit processes. Where compliance issues arise, we advise on remediation strategies that balance legal obligations with commercial realities.

Technology Transaction Support We provide IP due diligence for technology M&A, identifying risks in IP ownership chains, open source exposure, and protection adequacy. Post-transaction, we assist with IP carve-outs, cross-licensing arrangements, and transition services agreements.

AI and Emerging Technology IP We advise on the novel IP questions arising from AI, blockchain, and other emerging technologies - including inventorship and authorship issues, training data licensing, and protection strategies for AI-generated outputs. Our approach combines legal analysis with practical understanding of how these technologies operate.

Trade Secret Protection We help establish trade secret protection programs including confidentiality agreements, access controls, and documentation practices that support enforcement if misappropriation occurs. Where trade secrets are compromised, we advise on enforcement options and litigation strategy.

IP Disputes and Enforcement When IP disputes arise - whether infringement claims, ownership disputes, or licensing disagreements - we provide strategic advice and, where necessary, litigation support to protect your interests.

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For a confidential discussion about your technology IP requirements, contact Daimon Legal.

The information on this page is general in nature and does not constitute legal advice. Please review our Legal Disclaimer for important information about the limitations of this content and the terms governing your use of this website.

Footnotes

1. For analysis of IP value for technology companies, see IP Australia, Australian Intellectual Property Report 2025, available at https://www.ipaustralia.gov.au/tools-and-research/professional-resources/data-research-and-reports/Australian-IP-Report-2025. ↩

2. Higham, Kyle and Richardson, Euan and de Rassenfosse, Gaétan, Patent Pendency and Follow-on Innovation (December 12, 2024). ↩

3. The challenges of applying traditional IP frameworks to software are discussed in the Australian Law Reform Commission, Copyright and the Digital Economy (ALRC Report 122, 2013), Chapter 13, available at https://www.alrc.gov.au/publication/copyright-and-the-digital-economy-alrc-report-122/. ↩

4. Copyright Act 1968 (Cth), s 10(1) (definition of "literary work" includes "a computer program or compilation of computer programs"). ↩

5. Copyright Act 1968 (Cth), ss 33, 34. ↩

6. See CCOM Pty Ltd v Jiejing Pty Ltd (1994) 51 FCR 260 at 295; Research Affiliates LLC v Commissioner of Patents [2014] FCAFC 150 at [117]. ↩

7. Patents Act 1990 (Cth), s 67. ↩

8. Trade Marks Act 1995 (Cth), s 17. ↩

9. On data handling obligations in cloud computing, see Office of the Australian Information Commissioner, Privacy and Cloud Computing for Australian Government Agencies, available at https://www.oaic.gov.au/privacy/privacy-guidance-for-organisations-and-government-agencies. ↩

10. IP Australia, Patentable subject matter: Computer implemented inventions, available at https://www.ipaustralia.gov.au/patents/understanding-patents/types-of-patents. ↩

11. Commissioner of Patents v RPL Central Pty Ltd [2015] FCAFC 177 at [96]-[99]. ↩

12. IP Australia, Artificial Intelligence, guidance on AI and patents, available at https://www.ipaustralia.gov.au/patents/understanding-patents/artificial-intelligence. ↩

13. Thaler v Commissioner of Patents [2021] FCA 879; affirmed Commissioner of Patents v Thaler [2022] FCAFC 62. ↩

14. GNU General Public License, Version 3, 29 June 2007, available at https://www.gnu.org/licenses/gpl-3.0.en.html. ↩