European Patent Applications from the UK in 2024

European Patent Office, Munich

Author Carsten Steger  Licence  CC BY-SA 4.0   Source  Wikimedia Commons

 

Jane Lambert

The European Patent Office ("EPO") is the fifth-largest patent office in the world.   The other four are the China National Intellectual Property Administration, the United States Patent and Trademark Office, the Japan Patent Office and the Korea Intellectual Property Office.  The EPO grants patents for the territories of its contracting parties on behalf of their governments.  The United Kingdom is one of those parties.  A patent granted by the EPO designating the UK (known as a "European patent (UK)") is treated as equivalent to a patent granted by the Intellectual Property Office in Newport for all practical purposes.

According to EPO figures published earlier this year, there were 6,076 applications from the United Kingdom in 2024.  That was an increase of 3.1% over the previous year, and it placed this country 9th in the list of countries of origin for European patent applications.   The countries ahead of us were the United States with 47,787 European patent applications, Germany with 25,033, Japan with 21,062, China with 20,081, South Korea with 13,107,  France with 10,980, Switzerland with 9,966 and the Netherlands with 7,054.  Immediately behind the UK was Sweden with 4,936 applications.  Italy was 11th with 4,853, and Spain was 15th with 2,192.  In the top 10 countries of origin, only South Korea and Switzerland exceeded the UK's percentage increase in European patent applications, though Hong Kong and Norway, which are further down the list, saw double-digit percentage increases.

Britain's 3.1% uptick is less impressive when the number of European patent applications per country is compared to its population.   Switzerland produced  1,112.8 applications per million inhabitants.   It was followed by Sweden with 467.79, Finland with 428.28 and Denmark with 425.92. With 87,88 applications per million, this country came 18th in the list which is surprising for the country that pioneered the industrial revolution and has some of the finest universities in the world.

The following graphic shows the fields for which applications from the UK were filed in 2024.

Consumer goods came top, followed by computers, med-tech and biotech.   The top 10 applicants were as follows:

British American Tobacco Plc	636
Unilever Plc	613
Rolls-Royce Plc	254
BAE Systems Plc	184
British Telecommunications Plc	175
Linde Plc	173
Imperial Brands Plc	140
AstraZeneca Plc	121
Shell Plc	116
Johnson Matthey Inc.	105

One of the reasons why the UK has underperformed its competitors in patenting was thought to be the risk and costs of IP enforcement.   The Arnold reforms which I discussed in New Patents County Court Rules on 31 Oct 2010 NIPC Law, were intended to be an answer to that problem.  It seems to be taking a long time for news that IP enforcement need not be ruinously risky and expensive to filter down to industry.

Small and medium enterprises can protect themselves against such risk and cost by taking out IP insurance cover.  The Intellectual Property Office has published useful Guidance on Intellectual Property Insurance, and the Chartered Institute of Patent Attorneys maintains a comprehensive list of brokers, underwriters and insurers on its website.

Anyone wishing to discuss this article may call me on +44 (0)20 7404 5252 during normal office hours or send me a message through my contact form at any time.

Online Inventors Academy: Tips for Inventors - Confidentiality Agreements

F, Jouffroy Premier Secret confié à Vénus

Photographer Christophe Moustier Licnece Set out in Wikimedia Commons

 

Jane Lambert

Most inventors will have been told by their patent attorneys, Business and IP Centre librarians or other advisors to keep their invention secret until they apply for a patent.  The reason for that advice is that a patent can be granted only if the invention is new.  Once the public knows about it, the invention is by definition no longer new.   It is also worth mentioning that a lot of inventions will never be patented for one reason or another.   In some cases that may be because their subject matter is unpatentable.  In other cases, it may be because the invention is not worth the cost of patenting. 

Inventors often need to discuss their inventions with others such as possible collaborators, product design consultants, business angels, manufacturers or potential licensees.  When they do so, they are often advised to obtain the signature of the person to whom they disclose the invention ("the confidante") on a confidentiality or non-disclosure agreement ("NDA"). Such agreements require the confidante to use the information only for a specified purpose and either not to disclose the information at all or to disclose it only to designated personnel.

It is important to note that the obligation not to disclose or use such information arises not from the agreement but from the law of confidence. Mr Justice Megarry explained the principle in Coco v A.N. Clark (Engineers) Limited [1968] F.S.R. 415, 419:

"In my judgment, three elements are normally required if, apart from contract, a case of breach of confidence is to succeed. First, the information itself, in the words of Lord Greene, M.R. in the Saltman case on page 215, must 'have the necessary quality of confidence about it.' Secondly, that information must have been imparted in circumstances importing an obligation of confidence. Thirdly, there must be an unauthorised use of that information to the detriment of the party communicating it. I must briefly examine each of these requirements in turn."

Probably the most frequently found circumstance in which the imparting of information gives rise to an obligation of confidence is when the person confiding the information ("the confider") and the confidante enter a confidentiality agreement.  It is not, however, the only circumstance.   Another instance is where a client seeks advice from a solicitor or patent attorney.   No NDA is required because it is obvious that the client is disclosing, and the solicitor or attorney is holding, such information in confidence.  

In Coco, the judge said that the information must have the necessary quality of confidence about it.  That means that the information must have some value in that its unauthorized use or disclosure must either benefit the confidante or harm the consider. The information must be secret or at least not generally known.   It could be sensitive technical or commercial information or personal information such as the state of a celebrity's marriage.   A third requirement is that the confider must take reasonable steps to prevent the information's disclosure or misuse perhaps by keeping the document containing the information under lock and key or in a restricted file on a computer.

Obligations of confidence are usually enforced by proceedings in the civil courts.  In There's more to the Law of Confidence than NDAs 14 Oct 2019 I wrote:

"If, as sometimes, happens I am instructed to resist an application for an interim injunction where the applicant relies on an NDA I have a field day. First, I ask whether the information was ever confidential in the first place. Sometimes it is something that has been common knowledge in the industry since Adam was a boy. Other times there has been no attempt to keep the information secret. I was once negotiating terms of a licence which negotiations were taking place in serviced offices when I found the other side's supposedly confidential document in the publicly accessible ladies' loo. There is often room to dispute whether the confidentiality agreement was ever intended to apply to the information in question. One way or another, a halfway competent intellectual property specialist can drive a coach and horses through a bog-standard standalone non-disclosure agreement."

It is essential to specify in the NDA the information that is confidential, the occasion on which it is communicated, the documentation or media in which it is held, the persons to whom it can be disclosed, the purpose of the disclosure, the use to which the information can be put, the deadline for the return of the documents, media and any copies and so on.

In the above article, I suggested:

"If you want to rely on the law of confidence, print a form in duplicate on no carbon required paper with boxes for:

• The name and full postal address, job title, email, telephone and other contact details of the confidante and those of his or her employer if they are different.
• Identify the information to be delivered and the way in which it is to be passed (that is to say, private conversation, whether it is is a document and if so what it contains).
• An acknowledgement that the information has been disclosed in confidence.
• A finite period in which the confidante can contend that the information is not confidential at all and a rapid and cost-effective way of resolving such contentions such as expert determination or expedited arbitration.
• The use to which the information may be put.
• A deadline for the return of confidential documents and may have been made.
• Submission to the jurisdiction of the English courts.

Every single confidential conversation and the delivery of every single document should be recorded and logged separately. If any of the conditions is breached, the confider should call the confidante at once. If it is still not put right the confider should consider legal action including possibly an interim injunction."

Interim injunctions are not cheap to obtain because a lot of work has to be done by solicitors, patent attorney or other authorized litigators and counsel or other advocates in a very space of time.  There is always a risk that the application may fail and the applicant will be required to contribute to the respondent's costs in addition to his or her own.  But if the information is essential to the success of an enterprise there may be no other way.  

For most startups and many other small and medium enterprises, the only way in which enforcement litigation can be funded is by obtaining before-the-event insurance.   I have been urging inventors to take out such cover since 2005 (see IP Insurance  3 Sept 2005),   I repeated my message every year until 2020 2020 when the Chartered Institute of Patent Attorneys published its own guidance on IP insurance to its members (see IPO Guidance: Intellectual Property Insurance 25 Feb 2020).  I now refer inventors and all SME to CIPA's Advice on IP insurance which complements comprehensive Guidance on Intellectual Property Insurance from the Intellectual Property Office.

Last September I launched the Online Inventors Academy with a talk on Patents and Alternatives to Patenting.   Although the audience was not large we had a very lively and informed discussion that exceeded the advertised time by a whole hour,  Unfotunately the response to the next event was disappointing.    As Christmas was approaching we decided to relaunch the Online Inventors' Club and the Online Inventors' Academy until the New Year.   I will kick off the new season with a talk on confidentiality on 23 Jan 2025 at 18:00.   Attendees can join by clicking this link.

Anyone wishing to discuss this article or the Online Inventors' Club or Academy generally should call me on 020 7404 5252 during normal UK office hours or send me a message through my contact page, 

UK Innovation Strategy

Standard YouTube Licence

Jane Lambert

In his foreword to Global Britain in a competitive age which I discussed in NIPC Brexit on 19 March 2021, the Prime Minister wrote: "Our aim is to have secured our status as a Science and Tech Superpower by 2030." The Secretary of State for Business referred to that target in his foreword to UK Innovation Strategy Leading the future by creating it.  In my article, I wrote:

"As an intellectual property lawyer, I should love to see the UK become a science and technology superpower with vibrant creative industries attracting investment and expertise from around the world.   I just can't see how it is going to happen,"

I read the UK Innovation Strategy very carefully in the hope that it would explain how the UK will become a science and tech superpower in 9 years.

Synopsis

The document is 116 pages long divided as follow:  

• Secretary of State's Foreword (pages 4-5);
• "At a glance":  a bulleted list of the steps that the government proposes to take (page 6);
• "Introduction:  Why do we need an Innovation Strategy?":  a summary of the strategy (pages 7 - 10);
• Part 1 "Innovation today" covering "What is innovation?", "Why is innovation important?", "The challenge: Innovation created the modern world, but progress is slowing" and "The opportunity: The UK is ideally placed to lead a renewed global spirit of innovation" (pages 11 to 17);
• Part 2 " Innovation tomorrow" covering "Learning from the pandemic to create the world’s best innovation ecosystem", "Vision 2035: The UK as a global hub for innovation" and "Tracking progress towards our vision" (pages 18 - 21);
• Part 3: "Achieving Vision 2035" covering "Pillar 1: Unleashing Business – We will fuel businesses who want to innovate", "Pillar 2: People – We will make the UK the most exciting place for innovation talent", "Pillar 3: Institutions & Places – We will ensure our research, development & innovation institutions serve the needs of businesses and places across the UK" and "Pillar 4: Missions & Technologies – We will stimulate innovation to tackle major challenges faced by the UK and the world and drive capability in key technologies! (pages 18 - 100);
• Part 4: "Achieving our ambitions – implementation and next steps" (pages 101 - 107);
• Annex A "Innovation institutions" (pages 108 - 113) and
• Annex B: "List of Stakeholders Consulted" (pages 114 and 115).

Becoming a "Science and Rech Superpower" in Nine Years

The Introduction states on page 8:

"The Prime Minister has announced our intention to be a science superpower by 2030, placing science, innovation and technology at the heart of his vision for the UK. This involves being to science and technology what we are to finance: a central hub of the global economy, and the country that the world’s most innovative people and firms make their home."

Although there are signs that it has lost some business to Amsterdam, Dublin, Frankfurt, Madrid, Milan and Paris as a result of the UK's departure from the European Union, London remains one of the world's leading financial centres rivalled only by New York, Shanghai, Hong Kong and Singapore (see The Global Financial Centres Index 29  Long Finance. March 2021. Retrieved 18 March 2021).

A good measure of scientific and technical activity is the number of patent applications sought in a year.  According to the World Intellectual Property Indicators for 2019 published by the World Intellectual Property Organization, applicants in China applied for more than 1.5 million parents from the world's top 20 patent offices in 2018.  The United States came second with 597,141. Japan followed with 313,567 and South Korea came fourth with 209,992.  Companies from those countries. Huawei, Mitsubishi, Samsung, Qualcomm and Oppo, were among the top 5 applicants.  China, the USA, Japan and South Korea can fairly be regarded as scientific and technical superpowers.   If the UK is to be in science and technology what it is in finance it should aspire to create a similar number of patentable inventions by 2030.

With 29,941 patent applications in the world's top 20 parent offices, the UK lay number 13th.  It was ahead of Mexico but behind Taiwan, Germany, India, Russia, Canada, Australia and Brazil.   If the UK is to leapfrog over all those countries to join the USA, China, Japan and South Korea as a scientific and technical superpower it has a lot of work to do.

The government acknowledges the magnitude of that task on page 18 in the section headed "The opportunity: The UK is ideally placed to lead a renewed global spirit of innovation":

• "Business investment in R&D has fallen relative to our international peers. 

• There are low rates of technology adoption by firms that lead to underutilised knowledge. 

• We are at risk of a ‘brain drain’, the UK being a net exporter of talent. 

• Our workforce has skills gaps in some key areas which are at risk of growing in the coming years. 

• Our regulatory system often favours incumbent businesses over innovative new ones. 

• Growth is increasingly due to consumption, not due to investment. 

• Data, research and IP must be safeguarded to maintain competitiveness."

 Learning from the Pandemic

Part 2 of the UK Innovation Strategy points to the development of the Oxford/Astra-Zenica vaccine and other medical technologies in response to the pandemic as examples of British scientific and technical prowess and indicators of the way forward to superpower status. The speed with which the Oxford/Astra-Zenica vaccine had been developed and deployed was indeed a substantial achievement despite criticism of its effectiveness and side effects and the delay in obtaining regulatory approval in the USA.   However, similar success has been achieved elsewhere.  China has developed 7 vaccines that have achieved regulatory approval.  Russia has developed another 4.  The USA another 3 although the Pfizer–BioNTech and Janssen or Johnson & Johnson were developed in collaboration with German and Dutch scientists.  Two vaccines have also been developed by Cuba.  Others have been developed by India, Iran, Kazakhstan and Taiwan,

The Four Pillars

On page 21, the UK Industrial Strategy states that the government has four objectives it refers to as ‘Pillars’ in the document:

• "Pillar 1: Unleashing business – We will fuel businesses who want to innovate. 

• Pillar 2: People – We will make the UK the most exciting place for innovation talent. 

• Pillar 3: Institutions & Places – We will ensure our research, development & innovation institutions serve the needs of businesses and places across the UK. 

• Pillar 4: Missions & Technologies – We will stimulate innovation to tackle major challenges faced by the UK and the world and drive capability in key technologies."

These are amplified in  "At a glance" on page 6:

"Pillar 1: Unleashing Business – We will fuel businesses who want to innovate.

Increase annual public investment on R&D to a record £22 billion. 

Reduce complexity for innovative companies by developing an online finance and innovation hub between Innovate UK and the British Business Bank. 

Invest £200 million through the British Business Bank’s Life Sciences Investment Programme to target the growth-stage funding gap faced by UK life science companies. 

Consult on how regulation can ensure that the UK is well-placed to extract the best value from innovation. 

Form a new Business Innovation Forum to drive implementation of this Strategy.

 Pillar 2: People – We will make the UK the most exciting place for innovation talent. 

Introduce new High Potential Individual and Scale-up visa routes, and revitalise the Innovator route to attract and retain high-skilled, globally mobile innovation talent. 

Support, through Help to Grow: Management, 30,000 senior managers of small and medium-sized firms to boost their business’ performance, resilience, and growth. 

Pillar 3: Institutions & Places – We will ensure our research, development and innovation institutions serve the needs of businesses and places across the UK.  

• Undertake an independent review, led by Nobel Laureate Professor Sir Paul Nurse, Director of the Francis Crick Institute, looking across the landscape of UK organisations undertaking all forms of research, development and innovation. 

• Allocate £127 million through the Strength in Places Fund to develop R&D capacity and support local growth across the UK. 

• Invest £25 million of funding to the Connecting Capability Fund to help drive economic growth through university-business innovation. 

Pillar 4: Missions & Technologies – We will stimulate innovation to tackle major challenges faced by the UK and the world and drive capability in key technologies.  

• Establish a new Innovation Missions programme to tackle some of the most significant issues confronting the UK and the world in the coming years. 

• Identify the key seven technology families that will transform our economy in the future.

• Launch new Prosperity Partnerships to establish business-led research projects to develop transformational new technologies, with £59 million of industry, university and government investment."

Those  "pillars" are addressed in more detail in Part 3 and repeated for good measure in Part IV. 

Intellectual Property

One of the reasons why there are relatively few patent applications from businesses in the UK is the high cost of prosecution and enforcement.  

In 2004 the European Patent Office commissioned Roland Berger Market Research to compare the cost of patenting an invention in the UK and 5 other countries with the cost of patenting it in the USA and Japan (see my article Cost of Patents: EPO Report tells us what most of us already knew 23 Dec 2005).   In its Study on the Cost of Patenting Roland Berger reported that the cost of patenting an invention consisting of 10 claims on 3 pages, 11 pages of description designating 6 countries including the UK would be €30,530.  The cost of patenting the same invention would be €24,100 in the USA and €5,460 in Japan.  The cost of patenting in Europe may have fallen as a result of the Agreement on the application of Article 65 of the Convention on the Grant of European Patents in London (OJ EPO p 560 12 Feb 2001) but it is still believed to be higher than in the USA and Japan.

According to TaylorWessing's Patent Map. the typical costs of an infringement claim are between £200,000 and £1 million in England, €200,000 - €800,000 in France, €100,000 - €200,000 on infringement and a similar amount on validity in Germany, €75,000 - €200,000 in the Netherlands and  €2,530 - €375,000 in Switzerland.   The costs of litigation in the USA will be at least as much as in England because it is also a common law country but it is unusual for lawyers' fees to be awarded against the unsuccessful party.  It is arguable that England is the most expensive and possibly the riskiest jurisdiction in the world in which to enforce an intellectual property right.

Governments of both parties have been aware of this problem for at least the last 20 years (see DTI Innovation Report Competing in The Global Economy: The Innovation Challenge 1 Dec 2003).  They have also been aware of the solution which was an EU patent to be enforced by an EU patent court.  It is for that reason that the UK ratified the Community Patent Convention in 1975. It supported proposals for a Litigation Protocol to the European Patent Convention, a regulation for an EU patent and later the agreement for a unitary patent.  Even after the 2016 referendum, the government believed it would be possible to remain party to the agreement.  Mr Boris Johnspn in his capacity as Foreign Secretary actually deposited the UK's instrument of ratification on 26 April 2018.   Sadly, Amanda Solway MP gave notice of British withdrawal from the Unified Patent Court Agreement just over a year ago (see UK Withdrawal from the UPCA 20 July 2020).

As I argued in Has the Volte-Face on the Unified Patent Court Agreement been worth it? in NIPC Brexit on 6 April 2021 and in other articles, the sudden reversal by Amanda Solway of a longstanding policy on a unitary patent did British industry and science no favours.  It has perpetuated the disincentive to patent in this country.   Without adequate legal protection for innovation, investment in research and development can be expected to diminish.

The government might have been expected to respond that withdrawal from the Unified Patent Court Agreement was a necessary consequence of Brexit and that losses resulting from withdrawing from Europe will be more than offset by new opportunities elsewhere.  I looked carefully to see whether that was the case but I found nothing in the UK Innovation Strategy to suggest that it was.  Though the Intellectual Property Office published a press release on 29 July 2021 promising that IP was at the heart of the new innovation strategy, there is very mention of IP at all.  The word "patent" occurs twice in the document's 116 pages and there are a few paragraphs under the heading "Safeguarding Intellectual Property" on pages 39 and 40.  There is nothing in those paragraphs on reducing the cost of patenting or the cost of enforcing intellectual property rights.

I am not the only commentator to spot that lacuna.   Graeme Moore wrote in his comment New Innovation Strategy for the UK for The Patent Lawyer Magazine:

"However, there is a major factor that the UK government’s announcement fails to address satisfactorily – how to better protect the innovations developed in the UK from being copied and exploited by other companies who have not invested in the innovations? This should be at the forefront of the UK government’s mind when committing to spend UK taxpayers’ money on R&D – it’s a key part of ensuring a return on investment."

Conclusion

There are announcements to be welcomed in the Strategy such as the spending promises in Piller 1 and the "new High Potential Individual and Scale-up visa routes" in Pillar 2.  But the idea that British companies will be competing with the likes of Huawei, Mitsubishi and Samsung in such fields as artificial intelligence,  mobile telecoms, consumer electronics or any other new technology is as fanciful as the garden bridge, an airport in the Thames estuary and a bridge to Northern Ireland.  

Anyone wishing to discuss this article can call me on 020 7404 5252b during office hours or send me a message through my contact form,

It is never enough to get a patent, trade mark or registered design.

Corporation of Lloyds

Author phogel, Licence: Creative Commons Attribution-Share Alike 2.0 GenericSource Wikipedia 

Jane Lambert

As a barrister, I am often shown a blatant act of piracy or a breathtakingly unjustified letter before claim and am asked for my opinion on the strength of the claim. More often than not, that is the last I ever hear of the matter.  Sometimes I run into the patent agent or solicitor who consulted me and ask what happened. "Oh! The client just could not afford to fight" is the usual answer. "So he let it go" or as the case may be, "He just caved in."

Now if you consult TaylorWessing's Patent Map, click the arrow beside "I have a question for all countries" in the left-hand box, click again on "Questions concerning First Instance" and choose the "Typical costs at first instance?" option, you will see why.  The figure for England and Wales is £200,000 to £1 million. Compare that to France (€200,000 to €800,000), Germany (infringement €100,000 to €200,000 and the same for validity), the Netherlands (€75,000 to €200,000_ and Switzerland (court fees: €830 - €125,000 attorney's fees: €1,700 - €250,000). It is not surprising that only 5,736 European patent applications were made from the UK in 2018 compared to 26,734 from Germany, 10,317 from France, 7,927 from Switzerland 7,140 from the Netherlands (source European patent applications by country of origin 2009 to 2018).

Of course, those figures don't tell the whole story. Patents for European countries can be granted by national intellectual property offices such as the IPO in Newport as well as by the European Patent Office. Intellectual property litigation can be conducted far more cheaply in the Intellectual Property Enterprise Court than the Patents Court or the rest of the Chancery Division.  But these figures tend to confirm the widely-held view that IP litigation in England and Wales is prohibitively expensive and that it is just not worth spending many thousands of pounds on a patent or other registered right which costs many thousands of pounds more to enforce. 

Now what, if anything, can be done about that? The Ministry of Justice has probably done as much as it could by streamlining the practice and procedure of the Intellectual Property Enterprise Court, introducing a small claims track for the simpler cases and requiring all courts to manage their cases at proportionate costs. The IPO offers a cost-effective mediation service and examiners' opinions on such issues as whether a patent is valid and whether it has been infringed. The Unified Patents Court would have created a level playing field for all European patent owners but that may well have been scuppered by brexit and litigation in the German Constitutional Court,

Probably the best way forward is for businesses to consider enforcement whenever they apply for a patent, trade mark or registered design or acquire some non-registrable right. In the case of a start-up or other small business that probably means taking out IP insurance.  I have been writing about this topic since 2005 (see IP Insurance: Does it Work? 3 Sept 2005 NIPC Law, IP Insurance 3 Sept 2005 NIPC Inventors' Club, 6 Feb 2006 IP Insurance: Two More Insurers Identified 6 Feb 2006 NIPC Inventors Club, IP Insurance Five Years On 26 Oct 2010 NIPC Inventors Club, Intellectual Property - The Funding Options 10 April 2013 NIPC Law, IP Insurance: CIPA's Paper and 1 May 2916 NIPC Inventors Club).

Back in 2005, there were not many brokers with experience of arranging IP insurance and many patent and trade mark attorneys were sceptical of the value of the policies. Because after-the-event premiums and success fees were then recoverable from unsuccessful paries, many rightsholders thought that it would always be possible to find solicitors and counsel who would accept instructions on a no-win-no-fee retainer should a dispute ever arise.  All that changed with the Legal Aid, Sentencing, Punishment and Management of Offenders Act 2012 and costs capping in the Intellectual Property Enterprise Court (see Success Fees and ATE Premiums in the Patents County Court: Henderson v All Around the World Recordings Ltd 14 July 2011 NIPC Law). The Chartered Institute of Patent Attorneys published IP Insurance and other IP litigation funding arrangements in 2016.  The Intellectual Property Office published its guidance on Intellectual Property Insurance on 22 Jan 2016 which it updated earlier this year.

The IPO's guidance covers the types of before-the-event IP insurance policies that are available, the types of litigation, jurisdiction and risks that can be covered, the costs and benefits, the criteria for setting premiums, the claiming process and alternatives to litigation such as IPO examiners' opinions and mediation.  There is also a list of specialist brokers on the CIPA and IPO's websites.  Provision for IP insurance premiums or some other funding should appear in every business plan.  Angels, private equity investors, bankers and other lenders should insist on it.  It is as important as rent, equipment hire and employees' wages.

Anyone wishing to discuss this article or IP insurance generally should call me on 020 7404 5252 during office hours or send me a message through my contact form. 

Talk "How can I protect my Business Idea?"

Jane Lambert

I have been holding patent clinics around the country for many years and the most frequently asked question is "How can I protect my business idea?"

There is no easy answer because it depends on the nature of your business and the type of idea. For instance, a patent may afford the most extensive protection for a new product or process but if the costs of patenting, insuring and policing the are likely to outweigh the income likely to be generated from the invention you would be better off looking at other forms of legal protection.

It is for that reason that I am giving a talk at Barnsley Business and Innovation Centre (BBIC) entitled

How can I protect my Business Idea?

on 9 May 2017 between 12:15 and 13:15.

I will 

• introduce you to all the tools in the legal toolbox such as patents, trade secrecy, unregistered design rights, trade marks et cetera; 
• tell you the advantages and disadvantages of each type of protection; 
•  explain how to get each type of IP and how much it will cost; 
• give you some useful tips about insurance, watch services and enforcement; 
• advise you on the different types of IP professional, where to find them, how to instruct them and how much they are likely to cost; and finally,
• share a methodology for working out an IP strategy.

There is likely to be quite a lot of demand for places so call George or any of his colleagues on 020 7404 5252 to book your place as soon as possible,

Patent or No Patent

Jane Lambert

In IP's not just for Big Brands and High Tech Businesses 27 Aug 2016 NIPC News I wrote:

"In my career at the Bar I have known far more businesses that have failed from having too much IP than too little. Some of those failures had been caused by patents that cost many thousands of pounds to obtain but could never be worked. Others by disputes that were abandoned because the rights owner (who in many cases had a strong claim) simply ran out of money."

I appreciate that observation probably goes against everything that you have been told by your accountant, bank manager, business adviser, your patent agent and your peers but that does not make it any less true. You take a risk and commit yourself to considerable expense which you may never recover whenever you apply for a patent. So think long and hard before you take that step.

What are the Risks and Costs of Patenting?

In order to get a patent for an invention you have to "disclose the invention in a manner which is clear enough and complete enough for the invention to be performed by a person skilled in the art" (see s.14 (3) of the Patents Act 1977).  If you don;t do that, the Intellectual Property Office or a judge may take that patent away from you under s.72 (1) (c) of that same Act.  So the first risk is that you tell the world, including potential competitors in countries where you do not seek patent protection, how to make or use your invention. If your invention is any good that is precisely what they will do, The only thing stopping them is whatever patent protection you may be granted around the world and your ability to enforce that protection through civil proceedings in the English and other courts.

Before you apply for a patent you can rely on the law of confidence to prevent anyone to whom you may disclose the invention in confidence, such as angels, consultants, contractors, designers, manufacturers and others, from making use of the invention or disclosing it to third parties for so long as the invention is secret (see Trade Secrets FAQ  24 Aug 2016 NIPC News). You lose that protection as soon as your application is published because your invention becomes public knowledge.  Losing the protection of the law of confidence is the second risk that you run. Moreover, it could be argued that you disclaim all other IP rights, such as unregistered design rights,  when you apply for a patent because you dedicate your invention to the public. The would be another risk.

There is no guarantee that you will get a patent and if, you do get one, there is always the risk that it may be taken away if it is found that the invention had already been invented, that it was obvious in the light if previous inventions or some other reason.  If the IPO decides not to grant you a patent or the IPO or a court decides to take it away all the money that you will have spent on searches. professional fees, payments to the IPO or other patent offices and so on goes down the plughole. That is yet another risk.

Now for the costs.

A patent attorney will charge you several thousand pounds for preparing a patent application just for the IPO or European Patent Office ("EPO").  If you want to apply for patent protection in other countries it will cost you many times more.   Although it is not compulsory to instruct a patent attorney you are strongly advised to do so. Attorneys are trained to draft specifications in such a way as to claim a sufficient monopoly to make the invention commercially viable but not so broad as to render it invalid.  That's a great skill to have and that is why attorneys need good natural science, engineering or technology degrees to do their job as well as years of legal training.  It is possible for a reasonably intelligent and well educated lay person to apply for his or her own design registration or even a trade mark successfully but it us very rare indeed for a lay person to draft a satisfactory patent application.

If you are short of money it is very tempting to apply for a patent for the UK alone and ignore the world outside. The problem with ignoring the rest of the world is that your competitors outside the UK will then be free to make and sell your invention everywhere else and you won't get a bean. You may comfort yourself with the thought that the UK is the 5th or 6th largest economy in the world for time being. That may be true but compared to the USA, China, Japan or indeed the rest of the EU number 6 {or even number 5} is not all that big.  If you are going to confine your monopoly to the UK make sure that there is a sufficient market in this country to make money from your invention.

Your expenditure does not stop on obtaining the grant. Every year for the life of the patent you have to pay renewal fees to the IPO and other patent offices just to keep the patent alive.  In many countries those renewal fees increase during the term. You have to watch out for potential infringements and if the patent is infringed you may have to take legal proceedings to prevent the infringement.  That is the biggest cost and risk of them all because it can cost hundreds of thousands if not millions of pounds to pursue an infringer in a common law country like England or the United States and anything up to 50,000 euro even in civil law countries like France or Germany.

You and your backers need to be pretty sure that your invention is a real money spinner before taking those risks and incurring those costs.

What are the Alternatives to Patenting?

Essentially keeping your invention under wraps and relying on the law of confidence to stop unauthorized use or further disclosure (see Understanding Trade Secrecy and Confidentiality 23 July 2016). That can work very well if your product cannot easily be reverse engineered once it is put on the market which is  the case with beverages like Coca Cola or Chatreuse (see Trade Secrets FAQ 24 Aug 2016). The problem is that most technical secrets can be ascertained by buying a product and taking it apart and analysing it or discovered through parallel research.  In the absence of a patent there is nothing to be done to prevent reverse engineering or parallel research. Indeed, the functioning of a free market depends on it.

In the UK a technical design may be protected from copying for up to 10 years by unregistered design right, an almost uniquely British IP right.  That would include the shape of equipment or the arrangement of its electronic or mechanical components but design right would not protect the technology as such. If a competitor makes a similar product without copying the protected design he is quite free to make and market it in the UK. Moreover, anyone in the world including an infringer is entitled to apply for a licence to reproduce a design as of right for the last 5 years of the design right term.

Design right law is used to protect semiconductor topographies in the UK with a number of amendments that permit citizens of countries outside the EU to apply for protection and give a longer term.

Computer programs are protected from copying for the life of the author plus 70 years by literary copyright and the source code of a program can be a trade secret so long as it is not disclosed.

The advantages of confidentiality, copyright and design rights are that they are all free but they provide only limited protection. However, that may be long enough for a business to establish itself in the market and build up a reputation which would give it a competitive advantage. For many businesses that is all that is required. The big disadvantage is that the protection is much less extensive than the monopoly that only a patent can offer.

So how do I choose between a Patent or No Patent?

Here are my tips.

1. Remember that the purpose of IP is to protect income streams and not to protect clever technology just for the sake of it.  
2. Referring to your business plan try to identify the main income streams for your business over the business planning period.
3. Consider all the possible threats to those income streams. I don't mind betting that a large number of those will be commercial rather than legal such as new products based on different technologies or demand for the product drying up because of changing market conditions.
4. Think about possible counter-measures to those threats. In many cases those counter-measures will be commercial too such as reducing your prices or improving your product. Only in a  few cases will you need a legal remedy,
5. Where you do need a legal remedy consider all the alternatives such as design right and confidentiality. Choose the one that gives you the most cost-effective protection over the business planning period. In some cases that may be a patent but in many other cases it will not.
6. Unless you expect your earnings to grow substantially, take out intellectual property insurance or make other arrangements to fund enforcement litigation.

If you want to discuss this article, call me on 020 7404 5252 during office hours or send me a message through my contact form.

Understanding Trade Secrecy and Confidentiality

Jane Lambert

The right to bring an action to restrain, or recover damages for, the unauthorized disclosure or use of a trade secret is probably the most widely held intellectual property right but it is also one of the least understood. This article attempts to shed some light on the issue.

1. What is a trade secret?

As good a definition as any would be technical or commercial information that is secret or not generally known the unauthorized use or disclosure of which would benefit the person who receives it or harm the person who wants to keep it secret. That could include an algorithm, business plan, chemical formula or customer list.

2. How does one acquire a trade secret?

You can create it by data analysis, design, experiment, market research, R & D or other work or you can license it in from a third party. The important thing is that the information has to have some intrinsic technical or commercial value and it is kept secret.

3.  Do I need a confidentiality or non-disclosure agreement?

Not necessarily. The right to sue to restrain, or recover damages for, unauthorized use or disclosure arises from a set of judge made rules that imposes a duty upon a person who receives a trade secret in confidence not to use or disclose the information without the owner's consent or other lawful excuse. Sometimes it is obvious that information has been disclosed in confidence. Other times you have to put the recipient of the information on notice. That is done by getting him or her to sign a confidentiality or non-disclosure agreement.

4.  Give me an example of when a duty of confidence is obvious

When you seek legal advice from a lawyer or a patent agent is one example. Our professional codes of conduct impose an automatic duty of confidence which can be enforced by our regulators as well as the courts. Another example is where you spot on envelope marked "TOP SECRET" or "PRIVATE AND CONFIDENTIAL" on a bus or train. You should contact the owner or authorities and hand it in to them immediately.

5. Where can I find a reliable all purpose confidentiality agreement?

Such an agreement does not really exist because the obligation not to use or disclose varies according to the circumstances. The Intellectual Property Office gives some useful guidance in Non-Disclosure Agreements and it offers examples of a one-way and mutual non-disclosure agreements but these are just examples and cannot be used in every single case.

6.  What do you suggest?

if you ever have to enforce a confidentiality or non-disclosure agreement in court you have to:

• identify the information precisely as well as the date, time, place and circumstances in which it was given;
• prove that it was communicated expressly in confidence or in circumstances giving rise to an obligation of confidence;
• persuade a judge that it has technical or commercial value in that its unauthorized use or disclosure would benefit the person receiving it or harm you;
• satisfy the judge that it has been kept secret at all times; and
• explain the purpose of the disclosure, state who us entitled to see it and for what purpose and when documents containing the information are to be returned.

The best way to do that is to set it out in an acknowledgement and undertaking by the recipient of the information  and I have prepared a form for that purpose (see Confidentiality Agreement 21 Sept 2010 JD Supra). Particulars of the agreement should be entered into a ledger and strictly monitored.

7.  What happens if the recipient breaches his or her promise?

You contact them immediately, remind them courteously of the terms of their undertaking and ask them to comply with their promises immediately.  If they won't do that immediately then you must take legal advce immediately because you may have to apply to a judge of the Chancery Division for an interim injunction to restrain the disclosure. If you are advised to make such an application you must not hesitate. Once information enters the public domain it ceases to be confidential. A delay of a few days - sometimes of a few hours - can be critical.
NB Don't bring an interim injunction application in the IPEC small claims track as the judge has no jurisdiction to give such relief. You can always transfer your case to IPEC or some other court after you have made your your application.

8.   Are there any get-outs to the duty not to use or disclose?

Loads. Let me give you just a few examples.  As I said above, information ceased to be confidential once it reaches the public domain so long as that is not the fault of the recipient of the information. If the trade secret is a formula or mechanism it is quite lawful to buy a product made to the formula or embodying other technical information to find out how it is made or how it works once it has been placed on the market. You may discover the information yourself by independent, parallel research. You can't rely on the obligation of confidence to break the law or do anything that is regarded as improper.

9.   Say Something about the Trade Secrets Directive

The Council and European Parliament adopted Directive (EU) 2016/943 on the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use and disclosure (OJ 15.6.2016 L 157/1)  on 8 June 2016 which harmonizes the trade secrets laws of the 28 EU member states. Governments have to implement that directive by the 9 June 2018 which is likely to be before we leave the EU. Although we will cease to be bound by the directive when we leave the EU it will probably be in our interests to transpose it into our law because the directive offers an opportunity to codify our law of trade secrets. I discussed this directive in The Trade Secrets Directive 7 July 2016.

10.   Further Information

If you want to discuss any part of this article call me on 020 7404 5252 during office hours or use my contact form.  Meanwhile, here are some other materials that you may like to read.

Jane Lambert    All You Need to Know About Confidentiality   Leeds Inventors Club 14 June 2006

Jane Lambert    Confidential Information  NIPC Inventors Club, 12 Nov 2005

Intellectual Property Office Guidance Non-Disclosure Agreements 12 March 2015

IP Insurance: CIPA's Paper

Lloyd's of London

(c) 2011 Lloyd's: all rights reserved

Source Wikipedia

Creative Commons Licence

Jane Lambert

It will cost you several thousand pounds to get a patent for the UK and considerably more if you require patent protection elsewhere in the world especially outside Europe but unless you can enforce your monopoly in the civil courts you may as well spend the money on a new car or exotic holiday or even down the pub.

The cost of patent litigation has come down considerably in England and Wales (though not in Scotland and Northern Ireland) with the changes to CPR Part 63 in 2010 (see New Patents County Court Rules 31 Oct 2010 NIPC Law) but it is still not cheap. The costs that you may recover from the other side are capped at £50,000 for the trial on liability plus another £25,000 for an account or inquiry but you will probably have to pay at least as much out on your own solicitors and counsel and probably a great deal more. As for litigation in the Patent Court there are no limits though the judges will do their best to keep the parties focused on the issues and avoid unnecessary expense.

So what are your options if you are an inventor or small business owner?

• "Legal aid?" Sorry, chum, that was abolished for business disputes by paragraph 1 (h) of Schedule 2 to the Access to Justice Act 1999 although it may become available for litigation in the Unified Patent Court (see Legal Aid for the UPC 23 Jan 2016), 
• "How about no win, no fee?" No mate!  That may be a perfectly sensible way of funding personal injuries claims against insurance companies but intellectual property litigation isn't like that. For a start liability (whether your patent has been infringed) and the account or inquiry (how much money is due to you) are separate proceedings separated by many months and sometimes years. There's a great deal more uncertainty. Several lawyers have got their fingers burnt (see Success Fees and ATE Premiums in the Patents County Court: Henderson v All Around the World Recordings Ltd. 4 May 2013 NIPC Law).
• Litigation funding? Possibly but unlikely. Most funds shy away from IP litigation for the same reason lawyers steer clear of no win no fee retainers in this area of law.
• Legal indemnity insurance? You will find that most policies specifically exclude IP litigation.

No your best bet is IP insurance. Two of my most popular posts in this blog have been IP Insurance 3 Sept 2005 and IP Insurance Five Years On 23 Oct 2010.

More than five years have elapsed since my 2010 update but I have decided not to update it because the Chartered Institute of Patent Attorneys have just done that job for me.  They have published a 10 page report entitled IP Insurance and other IP litigation funding arrangements which can be downloaded from the CIPA's website. This report discusses before and after-the-event insurance and various alternative funding arrangements and then lists the brokers, insurers and other associations who offer IP cover. 

Anyone wishing to discuss this article, the CIPA report or IP insurance in general should call me during on 020 7404 5252 during office hours or send me a message through my contact form.

How to enforce your IP claim after court fees sky rocket

A patent or other intellectual property rights is essentially a right to bring a lawsuit. With a few limited exceptions, it is not a crime to infringe an intellectual property right. Patentees and other intellectual property rights holders have to enforce their rights themselves which generally means bringing proceedings in the civil courts.

1.  Court Fees are about to Sky Rocket

Unfortunately, the costs of issuing proceedings in the civil courts of England and Wales are about to soar through the roof. Art 2 of The Civil Proceedings and Family Proceedings Fees (Amendment) Order 2015 which is currently before Parliament requires those claiming more than £10,000 in damages or other monetary relief to pay 5% of the value of the claim up to a cap of £10,000.  At present, the most that anyone has to pay for issuing a claim is £1,920. That will increase to £10,000 after the Order is made - a whopping £8,080 or 421%. It is even worse for those with modest claims. Those seeking damages of £190,000 will have to pay £9,500 an increase of £8,185 or 622%.

The peers including the law lords have protested at these new fees as have the senior judges and lawyers (see Senior judges attack government's planned court cost rise 4 March 2014 BBC and Wednesday in Westminster 4 March 2015) but governments tend to get their way and the draft order will go through. So what should inventors and other small businesses do now?

2. Limit Damages Claim to £10,000

The issue fees for claims under £10,000 remains unchanged. They increased quite a bit last year but they will not be going up this time. If your claim for damages is between £5,000 and £10,000 the issue fee will still be £455. Limiting claims to £10,000 is not nearly as bad as it sounds because the principal relief that an intellectual property owner wants is an injunction - that is to say, an order of the court to do or refrain from doing something on pain of a fine or imprisonment for disobedience. Inquires as to damages and accounts of profits are very rare in IP litigation. I can count on the fingers of one hand the number of cases in which I have been instructed that have actually gone all the way to a full-blown inquiry.

Happily, there is now a court for small intellectual property claims, namely the Intellectual Property Enterprise Court (formerly the Patents County Court) small claims track. The judges of that court will hear claims for all types of IP cases except those involving patents, registered designs, registered Community designs, semiconductor topographies and plant breeders' rights where the damages or other pecuniary relief is £10,000 or less. I have written a lot about that tribunal, given a lot of presentations and even argued a case before it. You will find links to those articles at Patents County Court - the New Small Claims Track Rules 20 Sept 2012 NIPC Law. The great advantage of the small claims track is that the procedure is very simple. There is usually only one hearing which lasts less than half a day and the judge can award an injunction and damages at the same sitting. Something that can't be done in any other court. The risk as to costs is limited to a few hundred pounds though by the same token you can's recover more than a few hundred pounds if you are successful.

Even if your claim is in relation to patents, registered or registered Community designs, semiconductor topographies or plant breeders' rights you can still limit your damages claim to £10,000. Your case will be allocated to the multitrack which means that your liability for costs will increase but you will still only be charged £455 for issuing proceedings and recoverable costs in the multitrack are limited to £50,000.

3.   Bring your Case in the Intellectual Property Office

The hearing officers of the Intellectual Property Office have extensive jurisdiction in patents, trade marks, registered designs and unregistered design rights disputes and recoverable costs in proceedings before hearing officers are limited in most cases to a fixed scale (see Tribunal Practice Notice 2/2000 Costs In Proceedings Before The Comptroller).

In patients, for instance, hearing officers can decide who is entitled to a patent or to be named as an inventor, they can amend or revoke a patent, they can declare that a patent has not been infringed and they can decide compulsory licensing and licence of rights disputes. They can even hear infringement claims with the consent of the parties under s.61 (3) of the Patents Act 1977 though that has rarely if ever happened, possibly because hearing officers cannot grant injunctions.

In trade mark disputes hearing officers can revoke or declare trade mark applications invalid.

In designs, hearing officers can cancel design registrations and determine the conditions for licences of right.

Appeals from decisions of hearing officers in trade mark disputes can be made to an Appointed Person rather than the court who will generally award costs on the same scale as hearing officers.   S.10 of the Intellectual Property Act 2014 makes similar provisions in respect of designs.

4.   Seek an Examiner's Opinion

For the last 10 years, Intellectual Property Office examiners have delivered non-binding opinions as to whether a British or European patent is valid and whether it has been infringed.  This has proved very popular and their jurisdiction has recently been extended to other patent disputes and will shortly extend to designs. The cost of an examiner's opinion remains at £200.  In some cases, an authoritative opinion is all that is needed to resolve a dispute. In cases where the losing party refuses to back down a favourable opinion should make it easier to get after-the-event insurance or litigation funding.

5.  Use established Arbitration or other Alternative Dispute Resolution Schemes where they exist

Probably the best-known schemes are the ICANN Uniform Domain Name Dispute Resolution Policy for generic top-level domain name disputes and Nominet's Dispute Resolution Service for domain name disputes in the .uk top level domain name space. For a few hundred pounds trade mark owners can obtain an order for the transfer of a domain name in less time than it takes to exchange statements of case in many intellectual property disputes. Costs are irrecoverable but then you don't usually get all your costs back on a detailed or summary assessment anyway.

6.  Insert Dispute Resolution Clauses into your Licences and other Agreements

If you don't want to go to court to resolve a dispute with your licensee, joint venturer or other associate you can insert provisions for mediation, expert determination or arbitration into your licences or other agreements.

7.  Take out Before-the-Event Insurance

Although the 622% and 421% increases that I mentioned above are enormous, they are not a large part of the total cost of litigation and should not increase before-the-event insurance premiums greatly. There are some good IP packages on the market, particularly the IP Insured package which Sybaris IP offers to ACID members.

8.  On the Horizon

The British government has signed an agreement to establish a Unified Patent Court with exclusive jurisdiction to determine disputes over European patents and passed enabling legislation to implement the agreement. Art 71 of that agreement restored legal aid for inventors which was taken away from them by paragraph 1 (h) of Schedule 2 to the Access to Justice Act 1999. The Court will consist of a Court of Appeal in Luxembourg and a Court of First Instance with a central division based in Paris with a section in London. The Court will have its own rules and charge its own fees. So long as this country remains in the EU it is the best news for private inventors for 20 years.

Should anyone wish to discuss this article or IP law in general, he or she should call me on 020 7404 5252 during normal office hours or message me through my contact form.