A patent, copyright, trade mark, registered design or other IP right is nothing more than a right to bring a law suit. Its purpose is to protect the income generated by an intellectual asset, that is to say, a brand, design, technology or creative work. Such protection does not come cheap. According to research commissioned by the EPO, it costs €32,000 to obtain a typical European patent and maintain it for 10 years. That is an awful lot of money to spend considering that most patents are never worked. Enforcement is even more expensive. IPAC (HM government’s high level advisory committee on intellectual property) estimates that a patent infringement action costs £1 million in the High Court. That explains why I have seen far more businesses fail from having too much IP than from having too little in my 32 years at the English bar.
Yet there are circumstances in which a business needs to protect its investment in branding, design, technology or creative works. How does a businessman or woman recognize such circumstances and how does he or she choose the optimum legal protection. Here is a simple 6-point plan that can apply to just about any business.
1. Choose a period in which you expect your business to develop. This can be any period of your choosing which will probably depend on the nature of your business and products and services. For a company in the fashion or novelties business this could be a matter of months or even weeks. For a pharmaceutical company it could be decades.
2. Identify the main income streams that you expect to develop in that period. IP is intended to protect income streams, If your invention is never going to earn money whether directly or indirectkly through sale or licensing why waste thousands of pounds on patenting it? Similarly, if you have no sales in country X and are never likely to have any why seek intellectual property proteciton there? You may want tpo protect yourself in country X it it has a sufficient industrial base to allow a competitor to set up there but, if not, why bother?
3. Consider potential threats to each of those income streams. Competition from competing products or services may be one but there may be others such as changing patterns of demand or the general economic situation.
4. List possible counter-measures to those threats. Most of these will be commercial rather than legal such as cutting your prices or developing new products or services but for some threats such as plagiarism you may actually need some legal protection such as a patent or design registration.
5. If any of those counter-measurers is an IP right, choose the most appropriate one for your business. There is usually a choice. For instance, one way of protecting a new product or process is simply to keep it under wraps and seek to rely on the law of confidence to prevent unauthorized use or disclosure. The other is to proclaim it to the world in exchange for a temporary monopoly of the manufacture, sale and use of the product or use of the process (otherwise known as a “patent”). Where the technology has only a short shelf-life, a 20-year monopoly is otiose. On the other hand, if you are a drug company which has invested millions in R & D in a new product and waited years for approval from drug licensing authorities you need patent protection in every country of the world of you are to see an adequate return on your investment.
6. Ensure that there is adequate funding for enforcement proceedings. Unless you can afford hundreds of thousands of pounds on litigation and can risk at least as much again if you lose your case with equanimity you should think of IP insurance. Though these articles need to be updated you can start with two articles that I wrote in September 2005: “IP Insurance. Does it Work” (IP/IT Update) and “IP Insurance” (NIPC Inventors Club).
These and other tips are all set out in my presentation to Leeds Inventors Club “So you think you want a Patent?” which I gave on 18 April 2008. I also discuss them in my book “Enforcing Intellectual property Rights” which appeared earlier this month.
