15 September 2017

How to make Money from your Invention: Licensing

Jane Lambert

In How to make Money from your Invention 13 Sept 2017, I introduced readers to the EPO's Inventors Handbook. Readers will recall that the Handbook advised that there are basically four ways of exploiting an invention:
  • A licensing agreement with a company
  • A business start-up: get your idea to market yourself
  • A joint venture 
  • Outright sale of the idea.
In this article, I shall consider the first of those ways, namely licensing the invention.

The Handbook explains that a licensing deal is one that allows a party known as a "licensee" to use the invention in return for a periodic payment known as a "royalty". It adds that 
"The exact terms of the licence must be negotiated in a process that can be lengthy (often many months) and complex. The licence is a binding legal document, so it is usually essential to involve patent attorneys and other legal professionals."
The Handbook continues:
"For many inventors, licensing is the best way to benefit from an invention. The main reasons are:
  • The licensee bears the costs and risks of production and marketing.
  • Only established companies may have the resources to exploit an idea with major potential.
  • Licensing can provide the inventor with an income over many years for relatively little effort."
However, it also warns that "only the strongest forms of IP will interest potential licensees" which in most cases means a patent.  Licensing is often seen as a soft option compared to setting up a new business to market the invention, but, in many if not most cases, the reverse is true.

For a start, unless you are answering an express invitation from a company to submit your invention, you are likely to spend a lot of time and effort looking for a company that could make money from your invention. Finding a company that can make money from your invention is not the same as finding a company that makes a product like your invention. If, for example, your invention renders obsolete a technology in which a company has invested heavily or threatens an income stream such as the supply of consumables or replacement parts, such a company may be the last business on earth to be interested in your product.

Once you have found a potential licensee you have to persuade that company that it can make money from your invention.  Sometimes, nothing short of a detailed business plan will do. That is bound to be a bit hit and miss as you are unlikely to have access to the financial, marketing and technical information that is available to the company's managers.  Even companies like Procter and Gamble, Henkel and Boots that invite submissions from inventors require those inventors to show how the invention will fit into their product range (see Boots's Innovation Needs). They usually impose strict legal and technical requirements (see Boots's Submission Requirements).

Except for companies like P & G, Henkel and Boots, you will have to give some thought as to whom you will contact and how you will present your invention. As I said in Finding a Route to Market for Your Invention - Unsolicited Approaches are not usually a Good Idea 25 Feb 2012, you are unlikely to get anywhere with an unsolicited submission. Your best bet is to find out as much as you can about your potential licensee through industry events like trade shows and seminars.  The inventors who are best placed to license an invention are those already in an industry or academics in a relevant discipline. Members of the public with no special connection with the industry will find it hard to sell their ideas.

As a licensee would take a licence under a patent or other intellectual property right, your intellectual property strategy must be one that works for your licensee rather than you.  Your invention must be protected not just in the United Kingdom but in all the countries where the invention is likely to be sold as well as those in which it can be made. Unless you intend to grant an express licence to your licensee you will have to take proceedings against infringers and resist revocation applications in each and every one of those countries. That can be very expensive for a private inventor or small business.

Finally, do not expect your licensee's management to be particularly kind to you.  Their job is to look after their shareholders and not to look after you.  They are likely to drive a very hard bargain in the licensing negotiations. After the licence is granted they will construe it in a way that suits them. Once they have learned how to make your product and developed a market for it they may try to challenge clauses they don't like or seek reductions in the royalty or other payments. When negotiating the licence you should think about dispute resolution and choose a method and governing law that works for you.

In negotiating your licensing agreement you are likely to need the services of a patent strategist who could be a lawyer with experience of licensing or a patent or trade mark attorney, an accountant with expertise in licensing and tax incentives for new technologies as well as a patent attorney.  Should you wish to discuss this article further, call me on +44 (0)20 7404 5252 during office hours or send me a message through my contact form.

13 September 2017

How to make Money from your Invention

Jane Lambert

So you've invented something. Congratulations!  That was the easy bit.  Your challenge is to make money from your invention without losing your shirt, your home, your marriage or even your mental health. I am not being flippant.  In all the years that I have been practising law, I have known far more inventors whose lives have been ruined by their inventions than those who have become rich from them.

The reason why bad things happen to inventors is that they allow themselves to become obsessed with their inventions. Obsession clouds judgment which leads to bad deals and bad decisions.  Often there is only so much that an inventor's spouse or partner can stand. That is what leads to family breakdowns. Money and relationship problems can lead to depression or worse.

In many cases, those misfortunes could have been avoided by seeking good advice at an early stage. Now intellectual property advice can be expensive but it does not have to be. There is a lot of good advice on the internet for free.  One of the best sources of advice is the Inventors Handbook on the European Patent Office website.

The opening words of the Handbook are as follows:
"The purpose of this Inventors' Handbook is to provide you with basic guidance on all the key stages of turning an invention into a commercial product. Or perhaps we should say the key stages of turning an idea into an enterprise, if we are to widen our definition of 'invention' to include novel processes, business methods, social interactions etc. Though invention has traditionally been associated with manufactured products, it is now better understood that new wealth has always been created primarily from new knowledge, or novel uses of existing knowledge."
I would invite readers to read the rest of the page which stresses the need to reduce risk and control costs and that is where someone like me can often be of assistance.

The next passage I should like you to read right now is Exploitation Routes. The page begins with the words:
"There are basically four ways of exploiting an invention:
  • A licensing agreement with a company
  • Business start-up: get your idea to market yourself
  • A joint venture 
  • Outright sale of your idea."
It also warns readers to take care when dealing with invention promotion companies.  Over the next few days, I shall be exploring each of the above options and explaining where you can get more help.

If you want to discuss this article, call me on +44 (0)20 7404 5252 or send me a message through my contact form.

01 September 2017

The National Summer Teacher Institute: How the US Patent and Trademark Office trains Teachers to teach Kids about IP

US Patent and Trademark Office
Author Coolcaesar
Licence Creative Commons Attribution-Share Alike 3.0 Unported
Source Wikipedia

In What do Start-up Entrepreneurs need to look for in a Good IP Lawyer? 23 Aug 2017 NIPC News, I wrote:
"The first thing to say is that intellectual property is far too important to be left to IP lawyers and patent and trade mark attorneys. IP should be on the curriculum of every business school in the country. Every entrepreneur, investor, business owner and manager should know how the law protects his or her brands, designs, technology and creative output and how to leverage such protection for the benefit of his or her business."
Several readers agreed.  One added that IP is underestimated by so many businesses and that can be their undoing.

I was therefore interested to learn of an initiative in the United States that introduces the public to intellectual property very much earlier. In a post to his blog entitled Training Teachers to Educate the Next Generation of Entrepreneurs 31Aug 2017, Joe Matal, the acting US Under Secretary of Commerce for Intellectual Property and Director of the USPTO (United States Patent and Trademark Office), the equivalent of Comptroller here, wrote:
"As students are starting the school year, teachers are heading back with new lesson plans, some of which include intellectual property concepts. Last month, more than 50 K-12 educators from across the nation took part in the 4th Annual National Summer Teacher Institute (NSTI) on Innovation, STEM, and Intellectual Property. This year’s NSTI was hosted by the USPTO’s Office of Education and Outreach in Denver, Colorado in collaboration with the University of Denver’s Project X-ITE Team. NSTI is a week-long innovation and entrepreneurial boot camp designed to help teachers unleash the innovative potential of their students."
The course is open to science and maths teachers at the equivalent of primary and secondary schools or sixth forms colleges or to teachers of practical subjects like wood and metalwork and design technology. They must have some teaching or child mentoring experience and intend to spend at least another year in the profession, They must also intend to incorporate into their lessons plans, curricula and resources "student activities related to making, inventing, or innovating as part of school year curriculum". Finally, their attendance on the NSTI must be approved by their head teacher or other relevant authority (see FAQ on NSTI on Innovation, STEM and IP).

Fifty teachers may not sound much given the enormous population and the massive land area of the USA but one of the conditions for attending the programme is that they agree to share their experience with other teachers so the potential cascade experience is considerable. The USPTO's goal in providing this training is to give "opportunities for educators to explore the concepts of intellectual property creation, development, and protection as it relates to science, technology, engineering, mathematics, art, design, invention, and innovation."

The objectives of the programme are to:
  • "Increase public knowledge about the significance of intellectual property and innovation, especially as it relates to STEM, art, design, and entrepreneurship;
  • Help increase the number of students actively pursuing making, inventing, innovation, and STEM fields of study and careers;
  • Offer tools and instructional strategies to encourage student learning about STEM, innovation, and intellectual property; and
  • Highlight the accomplishments and contributions of inventors and the advances realized as a result of invention."
The course will be taught by "USPTO experts, National Science Foundation-funded researchers, experts from other Federal agencies, representatives from the Maker Education community, and distinguished faculty inventors from U.S. universities." Those attending the course can expect to learn how to:
  • "Apply the principles of intellectual property and innovation to help further motivate and engage students in authentic project-based learning in STEM;
  • Experience how innovators invent new things, improve upon old ones, and apply the creative design and engineering process;
  • Explore resources designed to encourage student inquiry using a strategy modelled on the research-based science writing heuristic to help meet Next Generation standards in science and engineering;
  • Gain experience in methods to implement the “Science of Innovation” materials in the classroom; and
  • Become part of a national network of education professionals at the cutting edge of integrating intellectual property, innovation, and STEM into the K-12 education curricula."
Like the United States, the UK is a country that ought to perform a lot better than it does in the OECD PISA (Programme for International Student Assessment) tests in maths and science. This seems to be an imaginative and effective way of motivating teachers to attract more children and young adults into the STEM subjects. This is the sort of initiative that we would do well to follow here.

Should anybody wish to discuss this article or how to set up a similar programme here, call me on 020 7404 5252 or send me a message through my contact form.

21 August 2017

Patent Revocation FAQ

Jane Lambert

What is meant by "Revocation"?

Revocation means removing a granted patent from the register of patents and cancelling the monopoly of the invention that the patent conferred.

What does that mean in practice?

It means that anyone can make, sell, import or keep your invention without asking your permission. Any action you may bring for the infringement of your patent will fail. You may no longer be entitled to any licence fees in respect of your patent.

Do I get any money back from the EPO or IPO?

Probably not.  It's one of the risks that you take when you apply for a patent.

Who can revoke my patent?

The European Patent Office can revoke a European patent in all the countries for which it is granted if someone opposes the grant under art 99 of the European Patent Convention within the first 9 months. The Intellectual Property Office, the Patents Court or IPEC (Intellectual Property Enterprise Court) can revoke a European as well as UK patent at any time under s.72  of the Patents Act 1977. The Comptroller (chief executive of the IPO) can also revoke such a patent under s.73.

On what Grounds can my Patent be revoked?

Essentially, the patent should never have been granted.

In the case of a European patent, art 100 EPC sets out the following grounds:
"(a) the subject-matter of the European patent is not patentable under Articles 52to 57;
(b) the European patent does not disclose the invention in a manner sufficiently clear and complete for it to be carried out by a person skilled in the art;
(c) the subject-matter of the European patent extends beyond the content of the application as filed, or, if the patent was granted on a divisional application or on a new application filed under Article 61, beyond the content of the earlier application as filed."
The grounds under s.72 are somewhat wider:
"(a) the invention is not a patentable invention;
(b) that the patent was granted to a person who was not entitled to be granted that patent;
(c) the specification of the patent does not disclose the invention clearly enough and completely enough for it to be performed by a person skilled in the art;
(d) the matter disclosed in the specification of the patent extends beyond that disclosed in the application for the patent, as filed, or, if the patent was granted on a new application filed under section 8(3), 12 or 37(4) above or as mentioned in section 15(9) above, in the earlier application, as filed;
(e) the protection conferred by the patent has been extended by an amendment which should not have been allowed."
The Comptroller's powers under s.73 arise when an invention was anticipated by an unpublished patent application or where an examiner finds that a patent was invalid under s.74A and his or her opinion is not successfully challenged.

How can a Granted Patent not be a Patentable Invention?

Let me give you just one example.

As you know an invention must be new. An invention is new if it does not form part of the state of the art. The examiner checks the databases and publications that are available to him or her and publishes details of the invention on the office's website and journal. However, much of the world's new technical literature is now in Japanese, Korean or Mandarin, none of which is widely understood here. There is a risk that the examiner will miss relevant prior art written in one of those languages when an application for a patent is filed. If that prior art finally comes to light it can invalidate the patent.

Can I still rely on Confidentiality, Design Rights or other IPR if my Patent is revoked?

Probably not.  Your specification is supposed to disclose your invention in a manner which is clear enough and complete enough for the invention to be performed by a person skilled in the art.  If it doesn't do that your patent would probably be void for insufficiency.  One of the less publicized passages of Mr Justice Whitford's judgment in Catnic Components Ltd. v. Hill & Smith Ltd. [1982] R.P.C. 183 is to the effect that you dedicate any copyrights or nowadays design rights in design drawings to the public when you apply for a patent.

What about Costs?

It depends on where the proceedings take place.

Costs in the EPO are usually borne by the parties themselves though the rules do provide for apportionment.

The losing party in the IPO usually contributes a few thousand pounds to the successful party on a fixed scale.

That is also the case in IPEC though the amounts awarded are usually much greater.

Costs in the Patents Court can be many hundreds of thousands of pounds.  Revocations are usually brought by way of counterclaim in infringement proceedings or vice versa.  According to Taylor Wessing, the costs of a typical patent action are between £200,000 and £1 million.

What can I do about it?

Take the best possible specialist advice when choosing the optimum legal protection for your intellectual assets, applying for such protection, enforcing and defending it. Such advice will not come cheap so it is important to arrange before-the-event insurance or other funding for those expenses. Obtaining IP protection without the means of enforcing it is as risky as travelling to North America without accident and medical insurance.

Further Information

Should anyone wish to discuss this article or patent litigation in general, call me during office hours on +44 (0)20 7404 5252 or send me a message through my contact form.

03 July 2017

What can a Barrister do for an Inventor that a Patent Attorney or Solicitor can't do just as well?

Jane Lambert

A flippant response to the above question might be: "Why do patent attorneys and solicitors seek counsel's opinion, instruct barristers to draft complex legal instruments or brief them to represent them before the courts or hearing officers on behalf of their clients?"  The obvious answer is that barristers can do some of those things better than other legal professionals can. That is not because barristers are brighter or more knowledgeable than other IP professionals but because we have two important advantages.

The first is that we know the judges who make the law. We know how they think which enables us to guess how they would analyse an issue that has not come in front of the courts before. We gain that knowledge by arguing against them when they are at the bar and before them when they reach the bench. Anybody can look up a statute or the case law which will describe the law as it stands today but only a specialist advocate can forecast accurately how the law will develop tomorrow.

Our other advantage is that we tend to be called in only after things have gone wrong. Through such experience, we learn how disputes or other difficulties arise and what could have been done to avoid them.  That experience also enables us to flag up potential difficulties before they arise and to suggest steps to avoid them.  That is why barristers are instructed to draft contracts and other legal instruments for use in business, particularly in new situations involving new technologies or new business situations.

Until 2004 our expertise could be accessed only if a solicitor, patent attorney or other professional intermediary instructed us.  Since then, it has been possible for businesses or individuals in the UK to instruct us directly. That does not mean that we now do patent attorneys' or solicitors' work. We remain a referral or specialist profession, but there is no longer a need to instruct an intermediary just to instruct us.  Also, if we believe that it is our client's interests to instruct some other legal professional, we are under a professional duty to say so.

That leads to yet another advantage.  We see a lot of patent agents, solicitors and other legal professionals in the course of our work and are thus in a unique position to judge their relative strengths and weaknesses.  We can, therefore, help members of the public who require the services of such an intermediary to identify one who will best suit their needs.

We cab now be a point of entry to the legal services industry. Often the best time to instruct us is early in the life of a new business or the development of a new product because we can help with the formulation of an IP strategy, suggest the optimum legal protection for an intellectual asset and build a team of IP professionals.  I have listed some of the services that I offer on the Services page of this blog and you will find others on the equivalent page of my NIPC Law blog. Details of how to instruct me appear on the Instruct Me page.

If you want to discuss this article with me or you have a specific matter upon which you require some help, call me on +44 (0)20 7404 5252 or send me a message through my contact form.

Further Reading

Jane Lambert

01 July 2017

Animated Advice from across the Pond

Standard YouTuve Licence

Jane Lambert

In Animated Advice 18 March 2016 NIPC News I introduced readers to some animations published by the Intellectual Property Office, the World Intellectual Property Organization and others. One of the films I mentioned was the IPO's IP BASICS: Should I get a patent?

Today I want to share with you an even more helpful animation published by the US Patent and Trademark Office ("USPTO") so long as you bear in mind that the USA is a different country, with different institutions and different laws. However, the United States like the United Kingdom is party to a number of international agreements such as the Paris Convention for the Protection of Industrial Property and the Agreement on Trade-Related Aspects of Intellectual Property Rights ("TRIPS") which requires each country's intellectual property laws to be broadly similar.

Here are also some points to bear in mind for British readers:
  • The USPTO is the place to start for inventors in the USA because it is the intellectual property office for that country but inventors in this country can start either at the Intellectual Property Office in Newport (look you) or the European Patent Office in Munich ("there's lovely for you!" as they say in Wales).
  • Our law does not expressly define an invention though it does list a number of things that can't be patented as such like computer programs or methods of doing business which are not specifically excluded in US law. Also, we cut out some of the verbiage like "machine" or "composition of matter." Basically, an invention can be patented on this side of the Atlantic if it is a product or process.
  • One reason why I really like this animation is that it advises inventors to consider writing a business plan and carry out some market research. I've been ramming that message home in my IP clinics, talks to inventors' clubs and blogs for years. Here is just one of my articles: "Why every business plan should take account of intellectual property" 3 Apr 2016 NIPC News.
  • The places where you can get help with your invention in this country would be the Business and IP Centres at the British Library next to St Pancras Station in London and the central libraries of Birmingham, Exeter, Hull, Leeds, Liverpool, Manchester, Manchester, Newcastle, Northampton, Norwich and Sheffield. Those libraries are also part of a wider network of public libraries that are associated with the EPO called PatLib. If you study the list you will find help available in Aberdeen. Belfast, Glasgow, Plymouth and Portsmouth.  We no longer have anything quite as good as Business USA.gov in this country but we do have the Business and Self-Employed pages of the gov.uk website. Also, you can call me on 020 7404 5252 any time during business hours and I can point you in the right direction.
  • As in the USA, you can apply to the IPO or EPO for a patent without instructing a patent attorney but I would strongly advise you against it.  I know patent attorneys don't come cheap but there are funding schemes here to help you (see How Small Businesses can fund IP Advice and Representation 3 Sept 2016 NIPC News). By the way, the terms "patent agent" and "patent attorney" mean different things in the USA. There, a patent attorney means a lawyer specializing in IP but a patent agent is a non-legally qualified professional who prosecutes patent applications. Here, the terms patent attorneys and patent agents are used interchangeably. Patent attorneys in the UK are members of the Chartered Institute of Patent Attorneys which used to be called the Chartered Institute of Patent Agents until a few years ago. Finally, the expression "pro se" is not used in this country. Those who apply for patents without the help of patent attorneys are usually referred to as "unrepresented applicants". 
  • In this country, we don't have "utility", "design" or "plant patents" as such but we do have registered and registered Community designs (for the time being) and EU and national plant breeders' rights  (see Jane Lambert Protecting Investment in New Plant Varieties 4 May 2016 LinkedIn). What Americans call "utility patents" are simply "patents" here.
  • There is no call centre in Newport or Munich like the Inventors Assistance Center but both the IPO and EPO publish guidance for unrepresented applicants on their websites and the Chartered Institute of Patent Attorneys, Ideas 21 and I hold free consultations with an IP professional at towns and cities around the UK. Check out CIPA's IP Clinics page and Ideas 21's regular advice sessions in London. Mine are held in Barnsley on the second Tuesday of every month and you can book your appointment through the BarnsleyBiz Surgeries page.
Wherever you are in the country, you can call me on 020 7404 5252 during office hours or send me a message through my contact form.

European Inventor Awards 2017

Standard YouTube Licence

Jane Lambert

Every year the European Patent Office recognizes outstanding inventors from around the world who have made exceptional contributions to social development, technological progress and economic growth with the European Inventors Awards.

Nominations are sought in the following categories:
  • Industry: for outstanding and successful technologies patented by large European companies
  • Research: for pioneering inventors working at universities or research institutes
  • SMEs: for exceptional inventions at small-to-medium-sized enterprises (SMEs)
  • Non-European countries: for all inventors who are not European nationals but have been granted a European patent
  • Lifetime achievement: honouring the long-term contribution of an individual European inventor.
The most recent award ceremony took place in Venice on 15 June 2017 and this year's winners were 
The above film shows the presentations. The winners were chosen from 15 finalists one of whom was Steve Lindsey from the UK who invented an energy-saving rotary air compressor.

Nominations are open for next year's awards. Anybody can propose any inventor including him or herself (see the Nominations page on the EPO's website).

Anybody who wishes to discuss this article or the legal protection and commercialization of innovation generally should call me on +44 (0)20 7404 5252 during office hours or send me a message through my contact form.

29 June 2017

The Inventor Prize 2017

Jane Lambert

When NESTA announced on 24 Jan 2017 that it "was working with BEIS to pilot an ‘inventor’ prize that will inspire and harness the potential of the UK’s home-grown inventors and stimulate user-led innovation" (see Zofia Jackiewicz Announcing the Inventor Prize on 24 June 2017 Inventor Prize website), I promised to do everything I could to support the initiative (see NESTA's Inventor Prize 26Jan 2017 NIPC Yorkshire).

Today NESTA appeals to the public for help to "refine the prize design through a better understanding of the support inventors need" (see  The Inventor Prize wants to hear from you 19 June 2017).  As I noted in my article "the Inventor Prize, which opens for entries later this summer, is a challenge prize pilot that aims to inspire and harness the potential of the UK’s home-grown inventors." NESTA is now holding a month-long consultation during which it will aim to talk to inventors, experts and the public about how it can shape the prize so as to achieve its aim of helping inventors.

It will do that by conducting a survey which I did this morning, interviewing respondents and holding a workshop at the Museum of London between 09:00 and 12:00 on the 10 July. Regrettably, I can't attend that workshop as I have conflicting professional obligations but I will report regularly on this initiative.

In the meantime, here are three interesting inventions that NESTA has found which have been created by individual inventors:
  • The Comp-A-Tent disposable tent made from non-finite, bio-based materials which are selected for their minimal environmental impact; 
  • Sugru, the first new mouldable glue designed for fixing, making and improving stuff; and 
  • Nimble which looks like a thimble but seems to do a great deal more.
Today I received a call from an inventor in Northampton about the advice and assistance that was available in his area. If you want to find out what services and resources are available in your part of the United Kingdom, call me on 020 7404 5252 or message me through my contact form.