Essential Reading for Inventors and Entrepreneurs

Jane Lambert

IP really can make or break a business.  Get it right and you can control entry to your markets or generate substantial amounts of licensing revenue. Get it wrong and you can be ensnared suddenly in complex litigation with draconian remedies and ruinous legal fees. You can try to ignore it but every business in the world has goodwill, some trade secrets, a website with text and photos all of which are likely to be copyright works. 

Problems can be avoided and opportunities seized by spotting them in advance.  By and large, that is what big companies do.  Their executives will have learnt something about IP at business school.   They will have attended conferences or read about IP in business journalists.  They will also be supported by in-house lawyers and patent and trade mark attorneys with ready access to the specialist bar and law firms. But inventors, designers and business owners rarely have the time, expertise or funds for any of that.  

Those who are aware of the problem have often asked me in the past to recommend a manual on IP for startups.  I wrote one on IP enforcement in 2009 but it needs updating and it does not cover non-contentious issues such as patent prosecution, design or trade mark registration or licensing.  But one book that I can recommend is Enterprising Ideas A Guide to Intellectual Property for Startups which was written by Omer Hiziroglu and published this year by the WIPO (World Intellectual Property Organization), the UN agency for intellectual property.

The publication is only 78 pages long and can be downloaded free of charge from the WIPO's website.  It consists of the following chapters:

• Introduction 
• Protecting your innovation
• Distinguishing your product in the market
• Going international
• Other strategic ways to exploit IP
• Managing risks
• Using IP databases, and
• IP audit

There are also two annexes.

The Introduction contains an overview of IP.  The IP office for the UK is the Intellectual Property Office in Newport.  We do not have utility models in this country but we do have unregistered design rights which protect the shape or configuration of articles from copying for up to 10 tears from the first marketing of the articles. Our industrial design law is also complicated because we have overlapping protection by copyright and design registration and now a new supplementary unregistered design right. Product designs that are new and have individual character can be registered with the Intellectual Property Office for 5 consecutive terms of 5 years each.   Also in the Introduction is a section on IP generating as opposed to IP consuming startups and a paragraph of technology readiness rating which is "a technique for assessing how close a technology or product is to commercialization".   Scattered throughout the book are case studies, and the one in the Introduction is about the Turkish company. Arçelik A.Ş.

The next chapter discusses patents, trade secrecy and copyright.  The third covers trade mark registration, domain names and design registration.  Going International introduces the Patent Cooperation Agreement, the Madrid Protocol and the Hague Agreement.  There is a discussion about licences and assignments of IP rights and funding, the scientific, technical and marketing information that can be obtained from patent, trade mark and design databases and an overview of IP audits.   The only area that could be improved is on managing risks.   In the UK there are watch services that warn of applications for possibly conflicting IP rights and there is a developing IP insurance market.

Anyone wishing to discuss this article may call me on +44 (0)20 7494 5252 during normal office hours or send me a message through my contact form. 

An Inventor's Guide to Shanks v Unilever

UK Supreme Court

Author Christine Smith Licence CC BY-SA 4.0

Jane Lambert

On 23 Oct 2019, the Supreme Court of the United Kingdom delivered a judgment that could affect anyone who works in R&D or in some other capacity in which he or she is likely to devise an invention. It could also affect an inventor who assigns his or her rights in an invention to his or her employer.  Five justices of the Supreme Court found that an invention that had generated revenues of £24 million had been of such "outstanding benefit" for the inventor's employer that the inventor deserved a payment of £2 million in addition to the salary and perks that he had received from his employment.

The case is known as Shanks v Unilever Plc and others and you can read all about it on the Supreme Court's website and my case note, Employees' Inventions - Shanks v Unilever of 28 Oct 2019 in NIPC Law.  My note links to a press summary of the judgment and a video in which Lord Kitchin, who delivered that judgment, reads that summary.

The right to an additional payment known as "compensation" arises out of s.40 of the Patents Act 1977. Subsection (1) could affect you if you are employed in a capacity where you are likely to devise an invention. Subsection (2) if you are employed in some other capacity that entitles you to patent your invention but you sell or grant an exclusive licence to your patent or right to apply for a patent to your employer,

However, inventors can't expect compensation in addition to their pay and benefits for any old invention.  It has to be one that generates an "outstanding benefit" for the employer. That is to say, a benefit that is exceptional or stands out.  That is not easy to prove.  Not many employed inventors apply for compensation and most of the applications that are made fail.

The significance of the Supreme Court's decision is that the Court made an award to the inventor even though £24 million is chicken feed to a multinational group of companies like Unilever.  The inventor, who is now a visiting professor of electronics and electrical engineering in the University of Glasgow, had worked in R&D for a subsidiary of Unilever in the 1980s. He applied for compensation as long ago as 2006. He took his case to the Comptroller-General of Patents, Designs and Trade Marks who appointed an official known as a "hearing officer" to hear his plea. 

One of the factors that the hearing officer had to consider under s.40 (1) was "the size and nature" of the employer's undertaking.  As Unilever, which makes everything from ice cream to deodorant is massive, the hearing officer could not say that £24 million was an "outstanding benefit" for that company. He dismissed the application. The inventor appealed to Mr Justice Arnold who agreed with the hearing officer. He then appealed to the Court of Appeal which agreed with the judge below and the hearing officer.

The inventor finally appealed to the Supreme Court which is the highest court of the United Kingdom. There Lord Kitchin, who had distinguished himself as a barrister of the intellectual property bar and later as a judge of the Patents Court and Lord Justice of Appeal, said that the hearing officer and the courts below had been looking at the words "the size and nature of the employer's undertaking" the wrong way.  The inventor had not been employed by the whole Unilever group but by a subsidiary that was responsible for R&D.  The correct way to consider the issue was to compare the benefits that had accrued from the invention in this case with all other inventions in the field that had emanated from the same subsidiary.  If that was done the £24 million benefit really did stand out and the inventor was entitled to a fair share of it.

The hearing officer had decided that 5% of the £24 million, which would have amounted to £1.2 million, was a fair share had he been able to make an award of compensation to the inventor and the Supreme Court agreed.  However, as Unilever had enjoyed the use of that money for many years and as the value of that sum had been eroded by inflation the Supreme Court gave the inventor an uplift to £2 million. Mr Justice Arnold had said that corporation tax should be deducted from the £24 million but the Court of Appeal disagreed with him and so did the Supreme Court.

Lord Kitchin made clear that the methodology of assessing the benefit from the invention having regard to the size and nature of the employer's undertaking did not apply to every case.  Sometimes it is appropriate to consider the benefit in relation to the revenues of the whole company as was the case where an employee's invention transformed the fortunes of the company.  Each case depends on its own facts.

While it is still not easy for an inventor to recover compensation over and above his or her salary and benefits this case has undoubtedly removed some obstacles and clarified the law. Most applications for employee's compensation start in the Intellectual Property Office where the procedure is less formal than a court and the costs that may be awarded against the unsuccessful party are considerably lower.

Anyone wishing to discuss this article or employee's inventions generally should call me on 020 7404 5252 or send me a message through my contact form.

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.

PatLib Libraries in the UK

Manchester Central Library

Author habiloid  Licence CC BY-SA 2.0  Source Wikipedia Commons

Jane Lambert

Yesterday, the Intellectual Property Office published an updated guide to PatLib (patent library) centres in the United Kingdom. These libraries are part of a European network of over 320 patent information centres that provide information on patents and other intellectual property rights to the public.

There are now 15 PatLib libraries in this country, the latest being Hull and Northamptonshire Central Libraries. The others are at Aberdeen, Belfast, Birmingham, Glasgow, Leeds, Liverpool. Llandudno Junction, London. Manchester, Newcastle upon Tyne, Plymouth, Portsmouth and Sheffield.

As well as offering access to Espacenet and other on-line databases, many libraries offer other services such as searches, patent clinics, watch services, workshops and seminars and inventors clubs. The services offered by each British library are listed in the guide.

The Birmingham, Leeds, Liverpool, Manchester, Newcastle and Sheffield central libraries are linked to the British Library in a national network of Business and IP Centres. This network is sponsored by the Arts Council of England, the Department for Communities and Local Government and the Intellectual Property Office. Last week I attended the opening of Sheffield Business and IP Centre and wrote about it in Sheffield Business and IP Centre Launch 24 Jan 2015 IP Yorkshire.

Inventors, entrepreneurs, business owners and others who are not close to a Business and IP Centre or a PatLib library can nevertheless benefit by subscribing to the British Library's Business and IP newsletter and joining its Linkedin and Facebook groups.

Further Reading

29 Jan 2015 Northamptonshire Central Library joins the PatLib Network IP East Midlands
24 Jan 2015 Sheffield Business and IP Centre Launch IP Yorks
17 Jan 2014 Alternatives to Invention Promotion Companies
2 Jan 2015  Putting IP at the Heart of Your Business Plan   4-5 IP
2 Sept 2014 Sheffield Inventors Welcome Joyce Gray  IP Yorks
15 Aug 2014 Sheffield Business and IP Centre IP East Midlands
18 Oct 2013 Where to get free basic Information on Intellectual Property IP South East
14 Oct 2013 Business and IP Centre National Network IP Yorks
21 July 2013  Finding the Right IP Advice IP North West
10 July 2013 Practising the Dark Arts in Leeds and Sheffield - roll up to be enlightened IP Yorks
6 Mar 2013 Enterprise and Libraries: a New National Network of Business & IP Support
5 Oct 2012 Organizations that Inventors in Manchester should know about IP North West
21 Jan 2012 BIPC Newcastle
15 Aug 2011 Inventors Resources in Northern Ireland
2 Apr 2011 Resources for Inventors in South East England
21 Mar 2011 Business Support Update
23 Jan 2011 Resources for Inventors in Yorkshire and the Humber
5 Dec 2010 Resources for Inventors in North West England
26 Oct 2010 Resources for Inventors in North East England
21 Oct 2010 Local Enterprise Partnerships begin to take Shape
2 Mar 2006 Liverpool Inventors Club
15 Jan 2006 New Leeds PatLib Library Website

Alternatives to Invention Promotion Companies

The other day I was asked for my opinion on an invention promotion company. It was not one that I had ever dealt with so I could not answer the enquiry directly but I referred the inventor to the advice that the US Patent and Trademark Office and our own Intellectual Property Office had given on invention promotion companies generally. 

The inventor thanked me for my reply and added:

"My family and friends have given me very positive feedback on my invention but how else do I check if my invention is good ?
What should I do next ?
Where can I find trustworthy contacts ?"

I replied:

"First do some market research. You can get some help with that at the Business and IP Centre of the British Library.
Next you should decide whether to exploit your invention directly by setting up in business to produce and sell it or licensing it out to someone else.
If you decide to license it out you will need to show your licensee how it will make money from the invention which means that you have to do much the same work as you would if you were making and selling it yourself. If you do get it out you will get a licence fee which will typically be a small percentage of the sale price.
I can advise you on the legal issues but not on the financial ones.
I wish you all the best with your invention."

The British Library and its associated libraries in Birmingham, Leeds, Liverpool, Manchester, Newcastle and Sheffield have massive resources on market research, business planning and everything else an inventor would need to know to set up in business. If he or she is not clear how to use those resources there are courses from the library staff and its partners.

I also advise the inventor to join an inventors' club if one is nearby. There he or she will meet product development consultants, patent attorneys, business advisers and other professionals who assist individual inventors and, most importantly, other inventors who can share their experience with him or her. I have listed some of the inventors clubs that I know about in the side panel to this blog. The Wessex Round Table of Inventors has a much longer list. I am sure that there will be lots of trustworthy and knowledgeable contacts at any of those associations.

In my email I made clear that I am a lawyer and not a business adviser. Here are some of the things I can do for inventors.

1. Tailoring a non-disclosure agreement to the inventor's needs or reviewing or advising the inventor on somebody else's.
2. Advising the inventor on the optimum intellectual property protection for his or her invention and if that includes patents helping him or her find and instruct patent attorneys in this country and abroad who can apply for them.  As I do not prosecute patent, design or trade mark applications I have no interest in selling the inventor a service though I must stress that every patent attorney I know would try to advise objectively too.
3. Representing the inventor at a hearing in the Intellectual Property Office if the examiner challenges his or her application.
4, Helping the inventor negotiate and draft agreements with collaborators, investors and consultants.
5. Drawing up terms and conditions, manufacturing and distribution agreements if the inventor wishes to make and sell the invention him or herself or licences if he or she doesn't and just about any other agreement the inventor may need.
6. Helping to keep the inventor out of trouble with third parties and resolving difficulties if any arise.

There was a time when barristers could be approached only through solicitors or patent or trade mark attorneys but that rule changed over 10 years ago, Now we can do more or less anything that a solicitor can do and as we don't have offices to maintain our services are often cheaper. You can find out more about instructing us in IP Services from Barristers 6 Apr 2013.

Should anyone wish to discuss this article, invention promotion companies or help to inventors in general they should contact me through my message form or call me on 020 7404 5252 during office hours.

Enterprise and Libraries: a New National Network of Business & IP Support

The Business and IP Centre of the British Library has offered advice and information to entrepreneurs and inventors in London and Home Counties since 2006. In addition to the publications and databases that would be expected of a library, the Centre offers business planning, intellectual property, market research and networking services which it delivers through clinics, seminars, workshops and on-line.   On-line services include the Centre's newsletter and the British Library UK Entrepreneur Network on Linkedin. Some of those services are offered by British Library staff and others by the Centre's partners.   

In my article "Local Enterprise Partnerships begin to take Shape" 21 Oct 2010 I wrote:

"One of the first casualties of the abolition of the RDAs are likely to be local and regional Business Link services. In an interview with Jason Hesse on the Real Business website, Mark Prisk, the Business Minister, announced:

'We’re going to wind down the Regional Development Agencies, and as part of those, we’ll be winding down the regional Business Link contracts.'  

These will be replaced by a state funded on-line service - presumably the existing Business Link website possibly under the Solutions for Business brand - and greater use of existing service providers such as chambers of commerce and local authorities. The proposal for a new business information service to be provided by thee British Library, NESTA, Newcastle City Council and Northumbria University is probably something like the model Mr. Prisk had in mind (see "Mark Prisk announces new business advisory service" on theReal Business website)."

The Business and IP Centre for Newcastle was subsequently launched and I blogged about it in "BIPC Newcastle"  on 21 Jan 2012.

In “Digital Opportunity A Review of Intellectual Property and Growth” Prof. Hargreaves recommended:

"9.     Small firm access to IP advice. The IPO should draw up plans to improve accessibility of the IP system to smaller companies who will benefit from it. This should involve access to lower cost providers of integrated IP legal and commercial advice."

The IPO drew up those plans in From ideas to growth: Helping SMEs get value from their intellectual property which I blogged in "IPO's Plan to support SME" on 31 May 2012.   One of the IPO's suggestions was "extending the model used at the Business and IP Centre in London to six regional patent libraries."

By a press release dated 19 Nov 2013 the British Library announced that it had signed an agreement with the Intellectual Property Office and six major UK city libraries  to establish a national network of services for small businesses and entrepreneurs across the country, modelled on the services offered by the British Library’s Business & IP Centre.  The six participating libraries are Birmingham, Leeds, Liverpool, Manchester, Newcastle and Sheffield City Libraries four of which host inventors groups that I have helped to set up.

On 11 Feb 2013 Penny Mordaunt MP sponsored a reception at Portcullis House to launch this network to be known as Enterprise and Libraries: A new national network of business & IP support.  The event included speeches from staff of the British Library, entrepreneurs who had used the Centre and representatives of local libraries. I was unable to attend the meeting but I am glad to say that I was represented by Jason McCartney, my Member of Parliament, and by Ian Wishart a patent agent who is also a director of Cobra Special Risks Ltd.

Over the last few years I have worked very closely with Chris Brown in Manchester, Ged Doonan and Stef Stephenson in Leeds, Ruth Grodner in Liverpool and Nicola Avella of Sheffield to support entrepreneurs and inventors in those cities.   Now that I am practising primarily from 4-5 Gray's Inn Square (see "Moving to London" NIPC website 5 March 2013) I hope to make a similar contribution to the Business and IP Centre in London.   If you want to want to discuss this article, call me on +44 020 7404 5252 or send me an an email through my contact page. You can also follow me on Facebook, Linkedin, twitter or Xing,

From the Patent Examiner's Mouth

At the first meeting of the Leeds Inventors Group many years ago, our first speaker Lawrence Smith-Higgins, Head of Business Outreach & Education at the Intellectual Property Office, promised to send us a patent examiner to address one of our meetings. I reminded Lawrence of that promise every time I visited the Intellectual Property Office for a hearing and at every outreach event at which we were both present. Eventually he relented and arranged for Kalim Yasseen to speak to us earlier this year.  Kalim did in fact address the Sheffield group to a packed house but, sadly, he fell ill and was unable to repeat his talk in Leeds.

Happily, Kalim's colleague, Sarah Whitehead, took his place and she was excellent. Starting from first principles, Sarah explained what a patent was and why an inventor or businessman or woman might want one. She distinguished patents from other intellectual property rights such as copyrights and design rights.  She outlined the inventors' bargain with the public - a monopoly in return for teaching the public how to make or work the invention - and showed how a patent specification reflects that deal. The description and drawings setting out the teaching and the claims the extent of the monopoly.   Patiently she educated the audience as to why the application had to be examined, how it was done and indeed why it seemed to take so long.  It is a very strong thing to grant a 20-year monopoly of the manufacture, importation, distribution and use of a new invention and it is not to be undertaken lightly. The British process may seem long drawn out but our Intellectual Property Office was significantly faster than many other countries'. Finally, Sarah talked about disputes over patents and how they may be resolved mentioning in particular the IPO's opinions service.

After her talk I invited Sarah to supper at "All Bar One". Over a hamburger and chips and vegetarian pad Thai (I had the burger and she the pad Thai) she told me a little more about her work and that of the examiners.  We discussed the practical effects of the Supreme Court's decision in Human Genome Sciences Inc v Eli Lilly and Company [2012] 1 All ER 1154, [2011] UKSC 51, [2012] RPC 6, [2012] Bus LR D37 (a case that I had blogged in "Patents: Human Genome Sciences Inc. v Eli Little and Co" IP/IT Update 9 Nov 2011).  Turning to other matters, she mentioned that she came from Derbyshire, that she was educated at the Universities of Bath and Manchester and that her research had been in life sciences. 

One of the many matters upon which we agreed was that the cost and risk of enforcement had inhibited British businesses from protecting their research and development adequately. We welcomed the new small claims track to the Patents County Court (see "Patents County Court - the New Small Claims Track Rules" IP/IT Update 20 Sept 2012) which will be the topic of my talk to Sheffield Inventors Group tomorrow 1 Oct 2012 at Sheffield Central Library at 18:00 and Liverpool Inventors Club at QualitySolicitors Jackson & Canter at 88 Church Street, Liverpool, L1 3AY on 29 Oct at 18:00.