Intellectual Property (IP) refers to a collection of assets, which, although not tangible, can be every bit as valuable as bricks and mortar. Given the potential value of IP, in order to succeed it is vital for any aspiring business to focus on protecting its IP rights and develop a portfolio, aligned with its commercial objectives.
Identifying IP within your business
There is often a perception that IP is only relevant to larger businesses or those involved in developing new and innovative products. However, that is simply not the case; all businesses have some form of IP but its importance, and the importance of protecting it, is often underestimated until it is too late. In a nutshell, there is likely to be intellectual property in anything that distinguishes a business from others in the same field. Technical developments, manufacturing improvements, trade names, brand names, logos, visual identity of products and services may all provide forms of intellectual property, which can be used to protect creativity.
Engineering companies are often rich in IP but they may not be taking full advantage of their innovation and brand value.
Patents are used to protect the technical aspects of an invention. In many countries, it is not possible to obtain patent protection for an invention which has been publicly disclosed. Therefore, it is advisable to keep inventions secret until it has been decided whether or not their commercial importance justifies patent protection. The patent application process can be a difficult and lengthy process. It is advisable to obtain the services of a qualified patent attorney, who will be best placed to achieve the strongest scope of protection for your invention.
Design rights protect the visual appearance of a product. This can include shape, contours, lines, colors, ornamentation or texture. Unregistered design rights are automatic IP rights recognized in UK and EU law. It is also possible to obtain a registered UK or EU design right, both of which can provide protection against the copy of a design.
Trade marks protect the brand or name of a business either as a whole or particular products/services. Unlike patents, trade marks are simply registered. While registering trade marks is important and can seem relatively straightforward, it is not enough. They have to be registered shrewdly so they carry a threat to infringers.
It is important to have in place processes for recording and managing the development of intellectual property within your business. It is advisable to keep accurate records, for example, lab or research notebooks that prove what work was carried out on which days, or receipts of sales of a product, plus invention/design disclosure documents which allow a business to formally record and manage IP. The better documented your records, the easier it is to prove what was known or done on a given date. This type of documentation might also be useful later down the line to defend yourself against others who may challenge your IP rights or help in future infringement actions.
Assuming that a business has obtained patents, design registrations have been completed, and/or the trade marks have been well registered, the focus then falls on policing and enforcement.
During the patent application process the patent office conducts a search to establish if the invention was already known at the time of filing. If the applicant wishes to proceed, only after a substantive examination process during which the examiner will ensure that all the requirements for patentability are met, will a patent be granted.
There are opportunities for third parties to monitor and intervene during a patent application process if they feel the pending patent covers technology which is already known. Anyone who has concerns about a currently pending patent application should seek advice from a patent attorney.
With trade marks in the EU, the onus is on the trade mark owner to defend its rights as trade mark offices do not bar new applications from being registered on the grounds that similar but unrelated trade marks already exist. The implication of this is significant brand owners have to actively monitor new applications in their area of trading and decide whether they are a threat to their own trade marks.
If a brand owner allows other parties to register a similar trade mark, they are less likely to be successful in the future, should they decide to challenge any other application. Keeping the register clean is important. If you allow other trade marks to co-exist with yours on the register, it becomes more difficult to take action later on. To prevent these risks, you can put in place a trade mark watch, which notifies you of relevant new applications. If a new application is considered to be too close to your earlier trade mark, you can decide on appropriate measures to take against it, such as sending a warning letter or filing an opposition.
Intellectual property rights are ‘negative’ rights, entitling the owner to prevent a third party from engaging in any action which infringes that right, such as making, using, distributing, selling or importing without their consent.
A granted patent does not automatically allow exploitation of the invention by the patentee. If the working of the invention uses an earlier patented invention, and that patent is still in force, permission from the holder must first be obtained to avoid infringing the earlier right.
It is important to note that it is only possible to bring legal action against a third party if you have a granted patent and not a pending patent application. However, once the patent is granted, it may be possible to claim damages from infringement back to the date publication.
A registered design right, trade mark or granted patent will, in many cases, deter potential competitors from infringement. If, however, you believe that someone is infringing your IP right, you may wish to take action.
While there are several out of court options, sometimes going to court to enforce your IP rights becomes inevitable. The litigation option is accepted as being expensive but it often prevents damages that go way beyond lost sales, such as damage to the reputation of a mark, brand tarnishment, brand dilution and even product (hence brand) liability.
One option for litigation is to file legal proceedings through the UK High Court. There are certain advantages, such as the possibility of obtaining higher costs, if successful. However, this process can often be very expensive and drawn out, so a cheaper and increasingly popular alternative is to file proceedings through the UK Intellectual Property Enterprise Court (IPEC). Recently moves have been made to make it easier for SMEs to enforce their IP rights, principally by giving IPEC real teeth.
It is worth noting that the majority of IP disputes do not get to court but are instead settled by an Alternative Dispute Resolution (ADR) or an out of court negotiation.
ADRs, such as mediation and arbitration, are becoming more and more popular as they enable the parties to reach a settlement outside of court, with the help of an impartial third party, for more limited costs.
If an infringer is able to prove that they were not aware of a patent and would have no reason to believe that the patent existed at the time of infringement, they may not be liable to pay damages to the proprietor of the patent. This argument is invalid if the patent proprietor marks their product with the words ‘patent’ or ‘patented’ together with the number of the patent.
The UK law has changed recently to extend these provisions so that a patented product may also be marked with a web address directing the user to a webpage, which clearly links the patented product with a relevant patent number.
Similar marking can also be applied to products which are covered by EU or UK registered design rights.
Whilst it is important to defend your IP rights and take action if someone has exploited them without your permission, it is also wise to be cautious and ensure that infringement has actually occurred before doing so. In the UK, groundless threats of an infringement proceeding are actionable directly against the accuser. This can result in the court granting an injunction to prevent any further threats, a declaration that the threats are unjustified, or damages to compensate the aggrieved for any losses resulting from the threat. Therefore, if in doubt as to whether someone is infringing your IP, it is advisable to contact a qualified patent attorney or trade mark attorney before approaching the alleged infringer.
Patents are generally national rights, effective only in the country in which they are granted. It is important then that a patent filing strategy recognizes the most commercially important inventions and that patent protection for these inventions is sought in all territories of interest.
The scope of design and trade mark registrations is also limited geographically. For instance, a UK trade mark registration will not grant you protection in China. Therefore, businesses should ensure they protect their rights in all relevant territories.
To obtain maximum benefit, it is best to obtain legal advice early on and IP professionals, such as patent attorneys and trade mark attorneys, are best placed to offer these services.
This can be done on an ad hoc basis, as and when you have questions about your own intellectual property or have concerns about the activity of other parties.
Another option is to contact an IP professional to discuss and arrange a more structured IP audit. This will involve a thorough review of all aspects of your IP: patents, trade marks, designs, copyright and IP management. The IP professional will produce a tailored report that captures and analyzes the intellectual assets and provides you with recommendations for future actions.
If you have an idea and want to disclose it before applying for a patent application then disclose it in confidence using a non-disclosure agreement (NDA). It is also sensible to use an NDA even after you have filed a patent application and before it is published.
The technology, products and trade marks of a business are likely to be among its most valuable assets so it makes sense to protect those IP rights with registration. However, there is no point in having granted patents or registered trade marks if you do not enforce them, as sooner or later they will lose their value.
In fields such as engineering where companies invest in innovation and technology, registering and enforcing IP rights, in particular patents and design rights, can give a business a clear edge over their competitors. It goes without saying that you can prevent others from infringing your IP rights. In addition, businesses can generate significant income from selling, licensing or commercializing in some other way their products and services which are protected by IP rights.
July 17, 2015