Thursday 2 July 2020

Understanding Intellectual Property

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Jane Lambert

On Tuesday 30 June 2020 I gave a talk over Zoom for the Menai Science Park Enterprise Hub entitled Understanding Intellectual Property.  I spoke for just over 30 minutes and then answered questions from the audience. I made 42 slides which Emily Roberts distributed to attendees after my talk.  I have also uploaded them to Slideshare. As there is a limit to what a person who did not attend the talk can learn from a set of slides, I have summarized my talk in this article.

Intellectual property is the collective term for the bundle of laws that protect investment in branding, design, technology and creativity.  Examples of those laws include patents for inventions and copyright for architecture, drawings, films, novels, plays and sound recordings.  They reflect a bargain that the public makes with those engaged in creating and disseminating new products and services.  In exchange for sharing their creativity and innovation with the public, the public grants them monopolies or exclusive rights that offer them opportunities to recoup their investment and perhaps a little bit more.

Those monopolies and exclusive rights can be very valuable,  As the Intellectual Property Office explains in its animation IP BASICS: Is Intellectual Property important to my business?. they can be used to exploit a competitve advantage.  They can also make money even when their owner is not making or selling anything because they may be licensed for periodic payments known as "royalties" or assigned for one-off payments.

On the other hand, as the animation also explains, intellectual property can be an existential threat to a business.  That is because the remedies and penalties for intellectual property infringement are draconian.  Another reason to take account of intellectual property.

There are often different ways of protecting an intellectual asset.  For instance, the inventor of a new product may tell the world how to make or use his or her invention in return for a patent.  Alternatively, he or she may keep it under wraps and require his or her employees to keep it secret. Not a bad option for a product that cannot easily be reverse-engineered such as a beverage.  That is how Coca Cola has kept its recipe secret since the end of the 19th century and the monks of Chartreuse the recipe for their liqueur for centuries,  But a drug company with a new medicine in competition with other major pharmaceutical companies around the world will probably want a patent in each of its main markets.

Some intellectual property rights such as copyrights, design rights, rights in performances and actions for breach of confidence and passing off come into being automatically and cost nothing to obtain. Others such as patents, trade marks or registered designs have to be registered with the Intellectual Property Office in Newport or a foreign intellectual property office for protection overseas.

When applying for a patent it is a good idea to instruct a patent attorney. They can make the necessary searches and draft the application in such a way as to maximize protection but minimize the risk of a challenge to the patent's validity.  The Chartered Institute of Patent Attorneys has produced a very good video entitled Why do I need a Patent Attorney? which shows how patent attorneys work.  Many patent attorneys are also trade mark attorneys or work in partnership with trade mark attorneys.  If a business owner wants to register a trade mark or design he or she would be well advised to consider a trade mark attorney, The Chartered Institute of Trade Mark Attorneys publishes a useful video on trade mark attorneys entitled How to navigate Intellectual Property Law.

I am often asked how much it costs to register a patent, trade mark or registered design.  The answer depends on how much work the attorney has to do.  There are also office fees and sometimes other costs such as translations or disbursements for other professionals such as barristers.   Typically, a patent for the UK can cost anything up to £5,000 or even more if there are objections and hearings.  Research published by the European Patent Office some years ago calculated that a 10 page patent with drawings for France, Germany, Italy, the Netherlands, Sweden and the UK renewed for up to 10 years could cost €30,000.  A patent covering all those countries plus China, India, Japan, South Korea and the USA could easily amount to £100,000.  Trade marks and registered designs are a lot cheaper.  Well under £1,000 for a UK trade mark including searches, drafting a specification and correspondence with the examiner or third parties and even less for a design registration as there is no substantive examination.

Although some IP infringements are criminal offences, primary responsibility for enforcing IP rights lies with the IP owner.   In Wales and England actions for IP infringement have to be brought in the Intellectual Property List of the Business and Property Courts of England and Wales.   Claims for damages for patent or registered design infringement exceeding £500,000 are brought in the Patents Court which sits in the Rolls Building in London. Claims for infringements of other IP rights have to be brought in the Chancery Division of the High Court or a County Court hearing centre where there is also a Chancery district registry.  The costs of litigating in Patents Court or the Chancery Division can be massive.  Assessments of over £1 million are not uncommon.  Claims under £500,000 can be brought in the Intellectual Property Enterprise Court where recoverable costs are limited to £50,000.  There is a small claims track for claims under £10,000 where the recoverable costs are limited to a few hundred pounds.  The Intellectual Property Office offers a cost-effective mediation service and examiners' opinions on patent validity and infringement disputes.   Both the World Intellectual Property Organization and Nominet provide a cost-effective service for resolving domain name disputes.

Intellectual property claims are often excluded from legal liability insurance policies but there are a few brokers who specialize in IP insurance.   Ian Wishart of Sybaris Special Risks gave a talk on the cover that are available for start-ups and SMEs when he visited M-SParc last September. Other sources of funding are members of the Association of Litigation Funders.  In the USA and some other countries, it is possible to instruct lawyers on the understanding that they will be paid only if their client wins and that their fee will be a share of any damages that may be awarded.

The following websites provide further information on intellectual property the last two of which are my own:

Intellectual Property Office
European Patent Office
European Union
Intellectual Property Office
World Intellectual
Property Organization
British Library Business and
Intellectual Property Centre
NIPC Wales

There is a network of Business and Intellectual Property Centres based which offer a wide range of services and resources onsite and online. The largest of those centres is at the British Library in London. The British Library Business & IP Centre video provides a good introduction to the Centre's services.  Anyone can join its Linkedin and Facebook groups and subscribe to its mailing lists but it is necessary to obtain a British Library reader's ticket to use its onsite services. The nearest Business and IP Centre to Anglesey is Liverpool Central Library and its services are described in the Business and IP Centre Liverpool video.

I finished by mentioning that the Menai Science Park is gathering the following network of professional advisors who can advise and assist its tenants and other businesses and creative or innovative individuals in Northwest Wales:

Commercial Solicitor
Innovation Consultant
IP Tax Specialist
IP Specialist Solicitor 
Patent Attorney

The first question I was asked after my talk was how to protect computer programs.  I replied that copyright was the main way of preventing copying of the code itself and perhaps also features of a program such as its system, sequence and organization. Secret information relating to the design and development of the program such as comments in the source code might be protected from unauthorized use or disclosure by the law of confidence or under the Trade Secrets Directive.  Although computer programs are not patentable as such it is sometimes possible to obtain a patent for a software-implemented invention.

The next question was on how to protect a new travel service.  I explained that services were the most difficult type of innovation to protect. A service provider could register his or her brand as a trade mark and copyright prevented copying of manuals, advertisements and other literature.  Business information such as customers' names and addresses might be protected by the law of confidence and the Trade Secrets Directive.  However, the basic idea of the service could not be monopolized.  Anyone could offer a competing service so long as they did not lead the public to believe that their services were the same as the original service provider's.

My third question was whether copyright prevented copying of products.   I replied that copyright was once an indirect way of protecting new product designs but that had been abolished by the Copyright Designs and Patents Act 1988.  Original designs - that is to say the shape and configuration of articles - are now protected by a new IP right called unregistered design right.  The term of protection was much shorter: 15 years if nothing is made to the design or 10 years from the date of first marketing if articles were made to the design.   In the last 5 years, anyone including an infringer could apply as of right for a licence to make the item.  

The last question was on what to do if an infringer reposts a photo on his website without permission.   I said that most actions in the Small Claims Track were claims of that kind (see Jane Lambert Damages Awards in the Small Claims Track 17 June 2020 NIPC Law).  The court could grant injunctions and award up to £10,000 in damages. It was not always necessary to instruct a lawyer for a small claim and the costs that could be awarded against an unsuccessful party were limited to issue fees, loss of earnings and travel expenses.  Hearings of the Small Claims Track now took place in Business and Property Courts hearing centres outside London such as Liverpool and Cardiff.

Anyone wishing to discuss this topic should call my clerk Stephen Somerville on +44(0)7986 948267 or send me a message through my contact page.

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