Patent and intellectual property rights

Ruth's newest article moves on from her previous 'Asset Management' by looking at how we can protect our intellectual property and original creations. If you are considering your intellectual assets or want more information on gaining a patent - look no further.

In last month's blog I talked about asset management and I pointed out that part of this was looking after the valuables in your business. Most SME owners think that if they don't hold stock then they have no assets but as I explained then, all businesses own Intellectual Property (IP) and in this month's blog I am going to give some good advice on protecting this and, for all the budding inventors out there the "must knows" about patenting. Below, I have listed four aspects of your business which I'd advise you to protect:

  • Trade Marks - IP

  • Copyright - IP

  • Design - IP / Patent

  • Product - Patent

Value what is yours

Intellectual Property Rights

Protection is cheaper than prosecution

As all business owners know, building a business takes so much time, energy and money so surely we would be crazy not to protect this investment? Not one of us would ever give any of this to a competitor on a plate but if you don't invest in protecting your IP or a patent then you could be regardless.

Patenting and IP law is in place to protect what is of value to a company and this includes paper and actual product. If you own the brand name as the limited company name and brand domain, you already have a level of protection. A competitor would not likely choose a brand without owning the limited company name or website domain. If you are a sole trader and have not protected your IP then a competitor could use your brand at any time and you would have to rely on "passing off" rights which is unsafe and unreliable. It is cheaper just to register your trade mark and have protection for the life of your business. You only have to renew every 10 years so remember, if you ever sell your business a big part of this will be the brand, name and trademark.

The commercial value in protection

A patent is an asset as you can sell it when it becomes valuable. You can also licence it under a franchise or other agreement so it will help your business grow without you having to increase your cost base.

If protected legally you can charge royalties for IP use so you will be making money while you sleep.

Some banks and lenders will consider securing finance against IP or a patent. If you are looking to secure investment from a private investor they will have more of an appetite if you are protected.

Trade Mark basics

What is a Trade Mark (TM)?

Customers remember names, words, logos or sounds which is why we use them in business to sell our products. From the music of a British Airways advert to the character on a cereal box, all of them are counted as TM's and must be protected.

How do I register my TM in the UK?

You have three options to register your TM, you can either do it yourself through The Intellectual Property Office, go through an IP Attorney or use an online TM broker. Doing it yourself will always be the cheapest option.

How much does it cost?

An approximate cost to do it yourself is around £250, through an Attorney will be around £600 and around £450 through an online agent.

Copyright basics

What is Copyright?

Copyright is a law that protects documents produced by an author when there is a record of them being created. This article I am writing is covered by the UK copyright law as I am a UK citizen and my computer will retain a copy of it proving I am the author.

What does it cover?

It covers literary documents including spreadsheets and written documents. Artistic work such as paintings, charts, photographs and sculptures are also covered.

How do I register Copyright?

As there is no UK copyright registration system; you can't actually register any copy. Keeping records of any works covers you.

The grey area

As employees will write content and create documents, copyright law can be grey in this area. You need to ensure that your Contract of Employment with the employee covers confidentiality and copyright. You need to detail that you own the rights to all documents or content created by them while under your employment and this will remove any grey area.

The world of patenting

What is a Patent?

In a nutshell, a patent is a legal order (grant) that protects a product with new technology or technical elements from being duplicated or copied within a close comparison. You must be aware that all details about the patent will be published in the public domain if accepted.

When should you apply for a Patent?

It is always advisable to apply for any patents PRIOR to advertising or discussing your product externally with anyone. If this is impractical get a Non-Disclosure Agreement signed then prior to discussing your product.

Why do you need a Patent?

There are a number of reasons why you need a patent but the fundamental reason is for protection of the product being duplicated or copied by competitors. Having a granted patent adds a huge deal of commercial value to any product.

How much should it cost?

If you are going to prepare and complete the application personally, a rough cost would be between £500 -£800 to file and instruct all searches. As we all know, filing the paperwork is the easy part, actually completing a strong application is the difficult part. Using a Patent Attorney may strengthen your application, they know how to word and prepare a strong application and will have far more experience than you do. The cost will jump using an expert to around £1000 - £3000 and to make a fair decision, you must cost the time it will take you to complete the application prior to dismissing using an expert. An expert will normally take around 2 - 4 weeks to prepare a patent application.

The World Wide Web means just that

In this day and age it's not worth having a business unless you are going to have a website and this in the world of IP and patenting can cause risk and cost. E-commerce will help you sell to a wider audience but you really need to assess what potential risk this could lead to. There is no such thing as an International or Worldwide patent as each country's laws are different. Geographically dependant on where your target audience lives, depends on the cost and criteria of a patent application being granted. You can however apply for an umbrella patent that covers 140 countries who have signed up to a patent treaty. If you do need this level of patent I would encourage you to engage with a Patent Attorney who will ensure you take the most commercial approach.

A simple overview on the UK patent application process

  1. Decide if you are going to do it yourself or engage with a Patent Attorney. If you choose to use an expert let them led you, if not you will need to put aside at least 6 weeks in time.

  2. You need to do a pre-filing search to ensure that what you wish to patent really is new and there is no granted or pending patent for a similar product. The following website will assist you in doing this: www.espacenet.com

  3. You can now complete the application form. In doing this you have to ensure you have an excellent technical knowledge of the product and can explain this in writing. It is advisable to have the invention or product at least to a prototype stage to ensure it will mechanically work. The application has different elements to it including a technical write up so the more information and the better the prototype, the stronger your application will be. You will need drawings and any sketches of the creation of the product if you have no prototype.

  4. You now need to file the application with the Patent Office. This can be done by paper or online. Doing this will provide you with a "priority date" which fixes the date you registered your product in the patent system.

  5. You have to file for a "prior art" search within the first 12 months of the application being made.

  6. The Patent Office will allocate your application to an Examiner to consider the legal side and technical aspects and "prior art" searches. They will then issue an examination report detailing their opinions and issues. This element of the application often results in arguments between the examiner and the person lodging the application until the examiner is persuaded to accept the application and grant the patent.

  7. When granted you will have to renew each year to keep the patent in force.

  8. Be aware that people can challenge your patent even after it has been awarded if they believe it to be invalid.

Patent tax benefits

In 2013 the government have launched a tax incentive called the Patent Box which reduces a company's corporation tax by 10% on profits relating to a patented invention.

Useful tips

You can't divorce your creative / web company so start as you mean to go on.

The internet is one of your most powerful sales and marketing tool. This means your website is precious as it can make or break a sales year. In recent years, a common issue I am called upon to deal with is SME owners who have fallen out with their Web Designers. I'm not sure if you have ever got divorced but I have and although it was emotionally painful, the law on ownership made it simple. Falling out with your creative / web company can be just this and unless you confirmed ownership at the beginning of the relationship you're in for a rough ride. A simple but essential tip is having a contract with the company so when you commence work its clear who owns what rights. I had to call my old web designer and ask who exactly owned www.ruthbadger.com

last year when he was refusing to give the FTP details to my new designer.

Be careful who you buy from

Great news, you have found a great Web Designer and they build you the best site in the world. Bad news, a few years on you get a letter from a photographer or agency asking you to pay for the pictures the Web Designer used. I have had this happen to me and I was forced to pay up.

Company's like Getty Images employ staff to find sites who are using their unauthorised photos. It is crucial that when you commission a website the Website Designer confirms all photos are royalty free or they agree to take the liability. This seems like a simple tip but if you don't it could turn out to be a costly error.

Go professional

If you are unsure of what to do at any point contact a IP / Patent Attorney as most of them offer a free of charge consultation to establish what your needs are.

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