IP protection for small and medium sized enterprises
by Helen Gavaghan, Barnsley
A panel of intellectual property (IP) experts last month (17th November) presented an overview to local creative businesses about how to protect creative work from those seeking to use original work without payment and/or consent and/or acknowledgement. The event was held at the Digital Media Centre in Barnsley, West Yorkshire*.
"Your investment in creativity creates intellectual assets, for example, books and performing arts," said IP barrister, Jane Lambert, head of chambers at NIPC, who chaired the meeting. NIPC is a small virtual chambers headquartered in the North of England.
Ms Lambert specialises in mediation and arbitration with some litigation, working in media law, IP, technology law and copyright.
The presentation spanned three themes: IP protection, namely patenting, copyright, and registering trademarks and designs; insurance against the need to take legal action against infringers; and contractual means of avoiding the need for legal action.
As the evening progressed it became clear that intellectual property law covers a suite of legislative, regulatory and other formalised mechanisms that can, if used appropriately, enable the development of ideas and business in a commercially positive and safe way. Its interaction, which exists, with company law, was not touched on.
The evening embraced both theory and practice. How, for example, does one brand? Obviously trademarks are among the tools. "It is best," said Michael Harrison, from Harrison IP, "to leave trade marking [until the business has existed] for a couple of years." Once the brand becomes established then trade marking and registering the trademark to make the brand recognisable would cost between £450 and £1000, depending on the locations where the trademark is registered. Dr Harrison is a former chairman of the Chartered Institute of Patent Attornies and is a fellow of the Royal Society of Chemistry.
In his overview Dr Harrison said that a search for former patent claims made by keyword (£200 per keyword) and for trademarks and registered designs would cost £500 in total. Patenting itself costs much more, possibly into the hundred of thousands, and the process ought to begin before there is any disclosure. The cost reflects that patenting is a mechanism that protects intellectual property based on deep and extensive knowledge in competitive fields with the potential for significant financial and commercial reward. It can take years.
"It is easier," said Dr Harrison, "to enforce defence of registered rather than unregistered rights."
If it does become necessary to take legal action it helps to have insurance. Yet, said Ms Lambert, most legal indemnity insurance specifically excludes intellectual property. One specialist firm in the trans Pennine region which does insure IP is insurance brokers McParland Finn, with offices based in Leeds and Manchester. Gareth Greaves-Milner, a development executive with the company, outlined types of insurance and what the broker needs to know, which, primarily, is: what is the IP and what is the value assigned to the IP in the business plan. The responsibility for this quantification lies with the owner," he said.
"Utilise contracts," Mr Greaves-Milner urged. These could cover employee terms and conditions or be confidentiality or non disclosure agreements. With a contract one could, for example, prevent your contracted website developer from taking the design used for your website and applying it to another.
The options are to self insure, insure against damages and legal expenses, insure against legal expenses only, or take out after the event legal cover. With after the event cover there is an upfront non recoverable fee if you decide not to move forward with the cover. The insurance premium itself would be roughly 33 percent of the total sought by the individual taking action, and that total might include recovery of lost value and revenue and of the legal action itself. Certain aspects of the legal cost might be excluded, says Mr Greaves-Milner.
Best of the options, though, is to avoid the need for legal action, and Kate Reid, of IP solicitors, Pemberton Reid in Harrogate, spoke of assigning (transferring ownership) and licensing (giving permission for someone to use the IP under certain conditions) IP.
"When you sign a contract never warrant the future validity of the IP," she said. "This is because you cannot know how the Courts will decide in future, and it might be that a trademark is not valid."
Moving next to licensing agreements; Ms Reid said one is giving permission for someone else to use your IP. The questions to address are: what is the licensee allowed to use, and how and where. If something goes wrong, how would you terminate the agreement? A publisher, for example, might be left with unsold stock if they failed to reach agreed sales targets, and the licensing contract might specify that the licensor would terminate the contract if certain Royalties were not received. In such an eventuality what would happen to the unsold stock? This is the kind of detail that a licensing agreement needs to cover, she said.
If action were brought because of the product who would take infringement proceedings? The licensor or licensee? In the case of a licensed trademark who owns the goodwill in the trademark?
Ms Reid, like all of the other speakers, offers a free initial consultation, during which she gives the potential client a check list, based on what they have told her, which would help them develop their instructions for her should they become clients.
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