New Year’s resolutions: why every business should resolve to better protect its intellectual property

Research shows that trade marks are associated with innovation, growth and productivity, while patents are associated with knowledge creation and businesses making better use of that knowledge[1].  Choosing to register trade marks and file patent applications is inextricably linked to a business’s wider strategy.  By extension, it could (and should) be assumed that having an intellectual property (IP) strategy, however simple, is a vital ingredient for business success. 

More importantly, businesses having an IP strategy are probably more likely to prosper for longer than those businesses that don’t.

The first step in most IP strategies will involve obtaining the best protection possible within budget constraints.  Once protection is in place, the various unregistered and registered rights can be used in a great many ways to help preserve a competitive advantage.

If you do the following seven simple things to best protect your business’s IP, then you will be acquiring good habits which will breed success.  Whatever the economic climate, your business will be better placed to achieve its commercial goals, having maximised opportunities while minimising risk, expenditure, wasted time and hassle.

1.         Regularly review your IP portfolio to check that it is fit for purpose

An IP audit can help identify what IP a business has and any gaps in existing protection or opportunities for obtaining further rights.  This should not be a one-off exercise.  Regular reviews will ensure that opportunities are not missed and that the IP portfolio can support the current and future needs of a business.  For instance, if an important new product is under development, then IP protection should be considered at an early stage, while the product is confidential and before any marketing activities have taken place, to ensure that no opportunities are compromised, particularly for filing patent applications.  Equally, if an IP right is no longer useful, then there is little point in continuing to spend money pursuing an application or paying renewal fees to maintain it in force.  In these circumstances, a business could choose to abandon the IP right or look to sell or license it to another party. 

2.         Ensure ownership of IP to maximise benefit to the business

IP rights are property rights, which confer the right to take action against infringers on their owners.  Also, applicants for patents, registered trade marks and designs must be entitled to make the application, i.e. they should have derived this right from the original inventor or designer.  In addition, ownership of IP can materially affect the value of a business. 

Therefore, businesses should ensure that any IP generated in the course of a project is transferred to them.  In some cases, this may happen automatically and sometimes it will not.  For instance, when a business commissions another person or organisation to create a copyright work, the first legal owner of copyright is the person or organisation that created the work and not the business, unless otherwise agreed in writing.   Accordingly, in order to be in the best IP position possible, businesses should ensure contracts of employment and agreements with consultants make clear that any IP generated is transferred to them.

Also, if registered IP rights are transferred from one business to another, e.g. as part of a merger or acquisition, then this transfer should be recorded swiftly on the relevant IP registers.

3.         Keep inventions confidential until after a patent application has been filed

For a patent to be granted for an invention, the invention must meet several requirements, one of which is that it must be new.  Generally, this means that the invention must not have been disclosed to the public by any means, anywhere in the world before the filing of the patent application.  This applies to the inventor’s or applicant’s own disclosures – e.g. papers, articles, presentations at conferences, marketing materials, sales of a product embodying the invention – as well as disclosures made by others.  Hence, if a business discloses its invention prior to filing a patent application, then the invention would not be new and the validity of the patent application would be compromised.

4.         Know your design rights, because appearances matter in the marketplace

There can be value in the appearance of products.  The appearance of products may be protected by unregistered (EU and UK) design rights, but these rights, while useful and not to be discounted, only provide protection against direct copying and their duration is limited.  It is also possible to protect the appearance of products using registered designs, which last for longer and do not require direct copying to have taken place for there to be infringement.  In the UK, registered designs may be somewhat under-used, given the significant value to the economy of design-led businesses.  Registered designs are affordable and can be enforced against infringers.  When considered per-country, per-year over the course of its 25 year lifetime, the cost of a European registered Community design (RCD) is very low.

5.         Check trade mark availability to avoid the potentially massive inconvenience of re-branding

A survey[2] carried out in 2010 for the UK Intellectual Property Office (UK IPO) found that only around half of businesses surveyed recognised the benefits of checking the trade mark register before deciding the name for a new product or service.  Not carrying out such a check is risky and can have expensive consequences.

Indeed, it is best practice to conduct a trade mark clearance search before applying to register a sign, e.g. a product name, logo or slogan, as a trade mark.  This will show whether or not the sign is available for use and registration.  If the search shows that use of the sign could infringe an existing registered trade mark, then in some circumstances it may be best to think of another sign.  This is much easier and less costly to do, if preparations for use of the sign, e.g. the design of product packaging, marketing and publicity materials, are not already well underway.

 6.         Take credit where it’s due to reduce the financial burden of innovation

Businesses should look to take advantage of government financial incentives for innovation, in particular R&D tax credits and patent box.  These two schemes – the new patent box and the older R&D tax credit scheme – appear to fit well together.

R&D tax credits are a generous government tax incentive for innovative businesses. Although they have been in existence for 13 years, there is a belief among tax advisers that they may still be significantly underclaimed, particularly by SMEs. The main barrier appears to be that SMEs don’t believe that their activities constitute R&D, when in fact they may do, since the definition in the legislation is very broad.

With the introduction of patent box, there are now specific tax implications of a business holding patents or not doing so.  Under the patent box regime, a business can pay a lower rate of corporation tax on profits derived from patented inventions.

7.         Get support, because it is hard to make it on your own

There are a number of support schemes and initiatives that can help businesses, in particular SMEs, realise greater benefit from their IP. 

Recently, the UK IPO published a handy booklet entitled “Business Support for SMEs – Maximising the Value of Intellectual Property”.  This booklet describes briefly a number of the main business support schemes available to businesses.  However, it is not (and it does not pretend to be) exhaustive.  Business support schemes and initiatives can come and go and their availability may vary from one region to another or one sector to another.  Local networking groups such as Science Capital in Birmingham or technology focused groups such as the Materials Knowledge Transfer Network may be a useful source of information on funding and business support for innovation.  Thus, with persistence, a business may be able to access several sources of funding and/or subsidised advice to help with IP-related projects. 

Last but not least, a good patent attorney or trade mark attorney will prove invaluable.  The Chartered Institute of Patent Attorneys and The Institute of Trade Mark Attorneys both have searchable databases on their websites.  Many firms (including Barker Brettell) offer free, no obligation, initial meetings to prospective clients. 

Alternatively or additionally, the UK IPO’s website has an IP for business and enterprise section, which contains a lot of useful information and an online IP Healthcheck tool.

We at Barker Brettell wish you well with all of your New Year’s resolutions, whether IP-related or otherwise.  In 2014, like many other people you could resolve to lead a healthier, better balanced lifestyle, learn a new skill or make time for something that you feel you may have neglected.  However, given the importance of IP to business success, can you afford not to make it one of your New Year’s resolutions to better protect your business’s IP?

For further advice or information, please get in touch with Nick Braddon or your usual contact at Barker Brettell – we’re here to help.

[1] See the penultimate paragraph of page 8 of the UK IPO’s April 2012 discussion paper “From ideas to growth: Helping SMEs get value from their IP”, which refers to: The Value of Intellectual Property Rights to Firms – Greenhalgh and Rogers, 2007; and Criscuolo, Haskel and Slaughter, ‘Global engagement and the innovation activities of firms’ (2006), NBER Working Papers 11479, National Bureau of Economic Research, Inc, 2006

[2] IP Awareness Survey 2010