30 November 2005
According to its chairman, "The Korea Invention Promotion Association is an organization specialized in promoting nation's intellectual property rights and commercialization for patent technology under Article 32 of the Invention Promotion Act, fulfilling its mission of implementing projects in the interest of inventors with efficient system."
The Association appears to provide:
- funding for commercialization;
- support for patent transfer
- support for patented technology valuation
- patent valuation; and
- an e-market place.
It is interesting that Koreans seem to regard globalization as an opportunity for improving living standards and the environment while our business and political leaders dangle globalization as a threat.
It is an excellent introduction to the topic and it makes some excellent points. It starts with the almost Marxian analysis of the transition of the world into a knowledge based economy. The dialogue contains some wonderful catch phrases like "business as usual" is not an option. It stresses the need to identify intellectual assets through an IP audit. Finally, it ends with a short test which I am glad to say I passed.
This is the first of 10 modules. The following are promised for the end of this year: marketing (trade marks and industrial designs), invention and patent, trade secrets. copyright and related rights. Next year, the re should be patent information, licensing, e-commerce, IP and trade and IP audits.
26 November 2005
"UK performance is strong on filings of trade marks, which may be more closely indicative of non-technology based innovation than patent statistics."
In a forward looking arrow graphic, it also suggests that other UK strengths include excellent science base, English language and traditions of openness. Since some of our best universities are closing their physics and chemistry departments I am not persuaded about this strong science base. It appears to be based on another convenient statistic namely the number of scientific papers and citations which comes conveniently from the DTI. However, even this particular piece of propaganda has to admit that the UK business’s record on R&D and patents is comparatively (sic) weak, though it tries to minimize that weakness by suggesting that these are imperfect measures of innovation in an increasingly services focused economy. Not nearly as imperfect as scientific papers and citations, mate!
I am trying very hard to keep this blog politically neutral but guff like that would try the patience of Job.
17 November 2005
I thought of Lemelson yesterday when Terry Singleton and Clayton Roudette (winners of the University of Manchester Incubator Company inventors competition) gave their presentations to the Leeds Inventors Group. This was one of the most stimulating evenings ever and we also had one of our best crowds. They made no bones of the fact that invention and commercializing their inventions had not been easy for them, but what came over from their talks was that invention can be fun. In the questions and answers that followed several members of the audience requested a brainstorming meeting where inventors and others could share their advice and experience. Ideas NW (Blackburn inventors' group) has just had a successful evening on those lines on 20 Oct and the Manchester group is going to try one in the Central Library at 6pm on 6 Dec 2005. Accordingly, we have resolved to run one in Leeds on 18 Jan 2006.
One of the reasons why we were particularly pleased Clayton is that he had come all the way from Poulton-le-Fylde and was due to appear at the Business Enterprise eXchange in Manchester today. The programme looks really interesting and will continue until tomorrow when you can catch Terry.
Finally, if anyone has got any energy for the evening. There is a talk at 18:00 tonight by Ray Clark "From Invention to Commercial Success" at Blackburn Technology Management Centre, Challenge Way, Blackburn BB1 5QB. I heard Ray speak in Manchester on 1 Nov 2005 (see "What Inventors can learn from Marketeers" and found his talk very good indeed.
14 November 2005
We are also slowly uploading the slides and handouts of some of the best of the talks that we have given since we started in 1997. So far we have got the slides and a handout for two seminars from earlier this year.
Watch that space. This is going to be a major resource for inventors and others initially in the North but hopefully later nationwide.
12 November 2005
I've already done quite a bit on confidence on my IP/it Update website and the Patent Office has published an excellent leaflet entitled "Confidentiality and Confidential Disclosure Agreements (CDA)" which actually contains a serviceable confidentiality agreement at the end. The question of where do you get a good confidentiality agreement actually came up in questions. I tried to explain that the obligation of confidence does not necessarily depend on an agreement but this is not an easy area of the law even for lawyers so I have decided to try again here.
What is an Obligation of Confidence and How does it arise?
Most people pick up the basics of the law of confidence at primary school. When one child tells a secret to another, there is an understanding that the child to whom the secret is imparted will keep the secret. If that child fails to do so, he or she will be despised. There are, of course, exceptions even in the playground. For example, a promise to keep a secret may be overridden where disclosure is necessary to prevent bullying or other harm. Essentially the same rule applies to adults. The law will prevent unauthorized disclosure or use of confidential information unless the public interest requires otherwise.
What is “Confidential Information”?
Essentially, any information the use or disclosure of which would harm the person who confides it (“the confider”) or benefit the person who receives it (“the confidante”) is confidential. Most such information falls into two categories.
- Personal information such as discussions between husband and wife, clinician and patient, client and professional advisor; and
- Business secrets such as the formula for a new chemical or the results of a market survey.
Business secrets do not have to be new or inventive like an invention. A collation of matter from publicly accessible sources will do so long as it consumed time and labour. All that is required is that the information should have value and not be widely known.
What do the words “disclosed in confidence” mean in practice?
The confidante must know or have reason to believe that the information was disclosed to him or her in confidence. Often the indication that information is disclosed in confidence is obvious. The words “Secret” or “Confidential” at the top of a page suffice in most circumstances to put anyone of reasonable honesty and intelligence on notice. But those words are not essential. Confidentiality will be assumed where the nature of the information is such that no rational person would willingly disclose it otherwise than in confidence.
Nevertheless, circumstances arise where it is not clear whether a particular item of information is disclosed in confidence. In advanced research and development, it is particularly difficult to separate what is confidential from what is arcane. In those circumstances, the best way to ensure that a confidante knows that the contents of a particular document or matter imparted in an interview is confidential is to say so. The best way to make sure that the confidante understands and accepts that such information is confidential and has been disclosed in confidence is to ask him or her to acknowledge such understanding in writing. Such an acknowledgement is often referred to as a “confidentiality” or “non disclosure agreement”.
Purpose of Confidentiality Agreements
It has to be stressed that an obligation of confidence does not arise from a confidentiality agreement as such. The primary function of the agreement is to put the confidante on notice that the information is confidential and that the disclosure is in confidence. Lest the obligation be broken, the agreement also records the disclosure in confidence and the undertaking of the obligation. Another purpose of a confidentiality or non-disclosure agreement is to impose a positive obligation on a confidante, such as obtaining similar undertakings from employees or taking proceedings to prevent disclosure or use by them.
Need for Positive Steps
However carefully it may be drafted, a confidentiality agreement will not protect unauthorized use or disclosure of information unless the confider takes reasonable steps to keep it secret. Such steps should include restricting access to computer files or documents containing secret information to those who need to know. Confiders should record access to those files and monitor their copying and use. Staff should be trained in security and their co-operation sought at all times.
How long does an Obligation of Confidence last?
The short answer is for so long as the information remains secret. That can be a very long time indeed. The recipe for chartreuse has been secret for 400 years. The Coca Cola Company has kept the recipe for coke secret for well over a century. More typically, the confidentiality of a design or formula of a product that can be reverse engineered lapses when it is put on the market. The rule is that once information becomes generally known otherwise than through the confidante’s misconduct the duty ceases to bind.
In what Circumstances can Confidential Information be disclosed?
An obligation of confidence may be overridden in any circumstances where disclosure is in the public interests. An obvious example is where disclosure would prevent or assist the detection of a crime or enable a patient to receive medical help.
How is the Obligation enforced?
The courts will grant an injunction to prevent unauthorized disclosure or use of confidential information for so long as it remains secret. If necessary, they will consider granting interim or temporary injunctions to prevent use or disclosure until the merits may be adjudicated. Where unauthorized disclosure or use has already taken place, the court may order the confidante or other defendant either to disgorge his or her gain or compensate the person who has been injured for his or her loss with interest. They may also make supplementary orders such as requiring a wrongdoer to hand over documents or supply information about others who may be involved. Above all, wrongdoers can be ordered to pay costs to the injured party which may amount to many thousands of pounds.
Most claims for breach of confidence in England and Wales are brought in the Chancery Division of the High Court of Justice or in county courts whose staff also work in district registries (that is to say offices of the High Court) that do chancery work. That means that claims may proceed in London (the Royal Courts of Justice or the Central London County Court), Manchester, Leeds, Liverpool, Newcastle upon Tyne, Birmingham, Bristol or Cardiff. Claims issued anywhere else are usually transferred to the High Court or county court of one of those cities.
That is the first question to ask. The question may seem impertinent immediately after someone has harmed or appeared to harm you but, that is exactly the right time to ask it. That is because the longer proceedings continue, the harder and more difficult they will be to escape.
There are really only two good reasons to sue.
- to recover reparation that would not otherwise be recoverable; and
- to prevent imminent and irreparable harm.
No other reason is good enough.
Making trouble for its own sake or seeking revenge will be regarded as unnecessary and may well be penalized. Litigation (going to court) is always expensive but if a court believes litigation to have been unnecessary, the costs for the party at fault could be swingeing.
Factors to Consider
Even if you have good reason to sue, you must decide whether the money you are likely to recover, or the harm that you are likely to prevent, is worth the time, risk and cost of litigation.
That is a complex judgment and often depends on uncertainties.
First, you have to estimate your own costs and your chances of getting any of them back.
Next, you have to estimate how much the other side is worth and how easy it will be to recover money from an opponent who can be expected to do all he or she can to avoid paying you. You should ask yourself whether a judgment be any practical use to you at the end of the day. If you get an injunction (an order by the court to do or refrain from doing something on pain of punishment) against the other side, could it find a way around your order? If the other side is ordered to pay you money, what financial state will it be in when the litigation comes to an end in several years time?
Closely connected to that question is what are your prospects of success given your knowledge of the facts and the unknowns? Can you afford, and do you have the will, to litigate over several years? Does your opponent have the will and resources to litigate over that time? Equally important, is it possible that the other side underestimates your determination and resources? Similarly, are you sure that you do not underestimate the other side’s?
What is involved
Litigation can take many years, and cost tens of thousands of pounds (or euro, dollars or yen), to resolve. Parliament, the courts and practitioners are taking steps to reduce costs and delays, but it will always take time and money to read, copy and analyse documents, trace and interview witnesses, prepare court documents, present one’s own evidence, test the other side’s and argue the merits.
A Two-Stage Procedure
IP (intellectual property) cases in which money is claimed generally proceed in two phases in England and Wales. In the first phase, the court considers whether the claimant (the person bringing the claim) has a valid IP right (IPR) that has been infringed. That is sometimes called “the trial on liability”. It can take anything from a few months to 2 years depending on the complexity of the case and the number of other cases waiting to be heard by the same court. The second phase is the “account” or “inquiry” where the court decides how much (if anything) the defendant (the person who is sued) owed the claimant.
The First Phase
If the court does find that the claimant has a good claim, it may order the defendant to stop infringing the claimant’s IPR at once, to surrender any goods that infringe those IPR and any equipment used to make those goods and to pay the claimant’s costs so far. If the court finds that the IPR claimed by the claimant to be invalid or that they have not been infringed it will dismiss the claim and order the claimant to pay the defendant’s costs.
Sometimes, a defendant makes a claim against the claimant known as a “counterclaim”. A counterclaim that occurs frequently in IP cases is revocation of a patent or a declaration that a trade mark or design registration or other IPR is not valid. If the court agrees with the defendant, the claimant may also lose the IPR upon which the action was fought or be required to amend it.
The Second Phase
If, on the other hand, the court finds the IPR to be valid and to have been infringed, the court proceeds to an inquiry as to the damages (compensation) that that the defendant owes to the claimant, or an account of the profits that the defendant has gained from his wrongdoing. The claimant can chose one remedy or the other but not both. Normally, it will chose whichever it believes likely to yield more money. An account or an inquiry can also last up to two years and may be even more expensive than the trial on liability if forensic accountants or other experts are instructed.
If an IPR owner believes that it can’t afford to wait for the court to determine whether its rights are valid and infringed, it can ask the court to grant an interim injunction, that is to say, an order enforceable on pain of punishment to do or refrain from doing something for the interval between the issue of the claim and judgment on the trial on liability.
Many litigants regard an interim injunction application as a short cut to victory and, in many cases it is. That is because an application for such an order can be nearly as expensive and time consuming as preparing for the trial and the losing party either runs out of money or simply loses heart. However, that is not how the remedy is supposed to work. The court is required to consider how much the claimant will lose in the long run from continuing infringement by the defendant if the claimant wins the case, how much the defendant will suffer if the claimant loses but the defendant is prevented from doing for a time something that proves to have been lawful, and then decide which of the alternative courses of action is least likely to do injustice. If it thinks that the claimant is unlikely to win or that it is likely to recover adequate compensation from the defendant in the end of the case, it will refuse an interim injunction. If it believes that the claimant could win and that, if it does, it would be unlikely to recover adequate compensation from the defendant for the losses that it might sustain up to trial it will consider injuncting (restraining) the defendant until trial. However, it will do so only if the claimant promises to compensate the defendant for any loss or damage that it may suffer from the injunction if subsequent facts show that the injunction should never have been granted.
Search Orders and Freezing Injunctions
There are several special types of interim injunctions that are available where there is evidence that a defendant would destroy, remove or hide records damaging to its case that would otherwise be available to the court or remove from the UK or otherwise dispose of money or assets against which would otherwise be available to a successful claimant.
One of those special injunctions is called a “search order” (formerly known in England as, and still called in other places, an “Anton Piller order”). This is an order requiring a person in charge of an office, factory, warehouse, vehicle or other property to admit an independent solicitor appointed by the court (“a supervising solicitor”) plus one or more solicitors instructed by the claimant accompanied perhaps by a computer or other expert to search the premises and computers for files or other evidence that may be relevant to the litigation and to allow that evidence to be copied, photographed or otherwise made available to the court.
The other special order is nowadays called a “freezing injunction” in England and Wales but was previously known as a “Mareva injunction” and is still known by that term in other countries. This is an order not to remove, hide or otherwise dispose of assets that could be used to satisfy a judgment. It is directed not only to the defendant but also to his bankers, stockbrokers or other financial advisors.
It goes without saying that both search orders and freezing injunctions have to be made in the absence of the defendant. Because both remedies are highly intrusive they are subject to many safeguards. Applicants for such relief can be made only to the High Court or to a special judge of the Central London Court. All evidence in support of such application has to be made in a sworn statement known as an “affidavit”. Such affidavit has to disclose not only facts that are helpful to the application but also those known to or reasonably ascertainable by the claimant that are not. The supervising solicitor has to have experience of search orders and be completely independent of the parties. Usually, he or she is an experienced litigation solicitor in a well known and hence expensive law firm. There are extensive restrictions on when, where and how the order can be carried out. The supervising solicitor is required to report to the court and the defendant has to be given an opportunity to challenge the order. All of this greatly adds to the cost of the litigation and should be considered only as a last resort.
Other Interim Orders
Applications for interim injunctions are not the only contested proceedings that could take place in the run up to trial. For instance, if the claimant is a limited company that may not be able to afford to pay the defendant’s costs at the end of a trial on liability, the defendant may ask the court to order the claimant to deposit into an escrow account held by the court a sum of money or give some other security for the defendant’s costs. If it is unable to give such security within the prescribed time, the court may stop the action in its tracks. Parties to an action are required to disclose all documents that are material to the case but sometimes disputes arise as to whether that has been done. Orders an such matters as interim injunctions, security for costs and disclosure of documents are known as “interim” or, occasionally, “interlocutory orders” to distinguish them from “final orders” which are those given after a full trial.
Either side can appeal to the Court of Appeal from any interim or final order and from there to the House of Lords. Should a point of EC law arise there may be a reference to the European Court of Justice in Luxembourg. There is also the possibility of an application to the European Court of Human Rights if either side is denied rights under the European Convention on Human Rights.
These will depend on the length and complexity of the action, the court in which it proceeds and the hourly rates of the lawyers and experts involved. It is rare for an action that is fought all the way to cost less than £100,000 for each side. Often the costs rise to over a million. Even an application for an interim injunction could cost over £10,000 apiece and an application fro a search order or freezing injunction very much more.
Costs will vary greatly depending on location, experience and overheads. An experienced litigator in a City practice could charge many hundreds of pounds an hour while that of an assistant in a suburban or country practice could be a quarter or even a third of that. The same variation applies to counsel. An intellectual property specialist could charge over £350 an hour while an experienced general chancery or commercial practitioner in Leeds or Manchester could be less than a third as much.
It has to be remembered that the country solicitor or provincial counsel will lack the experience of the specialist and that there will be times when he or she will spend several times as long as (and hence charge more than) the specialist and still get it wrong. Conversely, not every IP case is so complicated that it needs a London specialist.
Whatever is spent on lawyers and experts often pales into insignificance compared to the diversion of management time and resources from running a business to conducting litigation. This opportunity cost will vary from case to case and from company to company but a good rule of thumb is that for every penny spent on lawyers another 3p has to be added to a litigant’s costs in terms of disruption, extra expense and lost opportunity.
Alternatives to Litigation in England and Wales
Sometimes there are alternatives. it may be possible to rely on a collecting society or other trade association. Some intellectual property infringements are also criminal offences. Occasionally, disputes can be resolved through arbitration, mediation or other ADR (alternative dispute resolution) procedures. If a corresponding patent or other IPR has been infringed in some other country, it may be cheaper or less risky to sue elsewhere.
11 November 2005
I mention all this because I have just come across an excellent article on the Dyson website entitled "Help for Inventors". It consists of 4 pages:
- Why Patents are Important
- Getting a Patent,
- Costs, and
- Useful Contacts.
Most of the links are the usual, but there are one or two that are not found everywhere, like Inventorlink. Altogether, some very good stuff.
One of the beneficiaries of the foundation is the Smithsonian National Museum of American History in Washington DC. Using funds contributed from the Foundation, the Smithsonian has established the Lemelson Center for the Study of Invention and Innovation. This is a wonderful resource even on the internet. The current centre pieces include "Invention at Play" for children (particularly appropriate to honour the memory of a man who began his career in invention as a small boy), "Inventing Ourselves" (an exhibition on performance enhancement through invention and innovation) and a focus on the Novel Prize. Online resources include thousands of articles on invention.
It is rare to find a serious independent inventor of any kind nowadays, rarer still to find a successful one. Altogether a great inspiration.
06 November 2005
The Invention and Innovation website, which was commissioned by NESTA, sets out to be "a step-by-step guide to the process of invention and innovation" with guidance on the pitfalls to avoid and sources of advice to pursue, tips on developing an idea into a real product, an overview of protecting intellectual property and advice on ways of getting an idea into the commercial world from licensing to making and selling the product oneself. Like their books the website sets out a number of tips in digestible bites. The first of these is
"If you want to succeed, you must first do everything you can to avoid failure. That means you must always control your costs and always limit your risk."
It continues with some other good advice like making patent and market searches, prototyping, applying for a patent, licensing and the like.
Although much of what is on the site is also in their book (and indeed the "About Invention" page of the Design Council site) this website has one big advantage and that is the extensive though slightly out of date "Inventors' Directory" links page. This covers everything from innovation and enterprise agencies to banks though there are lacunae such as the absence of any serious mentin of enforcement, funding, inventors' clubs and professional help other than patent agents. These minor faults apart, it is a good guide and is strongly recommended.
03 November 2005
Ray Clarke's talk last Tuesday was excellent. An engineer himself, Ray contrasted the approach of an inventor keen to commercialize an invention with that of the marketeer looking for a product to fill a gap in the market. The two go together but the market need must come first. Anybody who missed that Ray in Manchester can hear him in Blackburn on 17 Nov 2005.
The Manchester Inventors plan a very special event next meeting for 6 Dec. Members will be invited to showcase their inventions to other members of the club in confidence. We hope to generate a lot of sparks from that event. Nobody will be allowed in without signing a confidentiality undertaking. A draft of this will agreement will be on the blog soon.
Finally, I have to apologize for the lack of activity on this blog over the last few days. The reason is that I have been doing jury service in Bradford and have had to use time that I would otherwise spend on this blog on paperwork. I have another week of this imposition. After 11 Nov, normal service should be resumed.