Intellectual Property (IP) rights are one of the most valuable assets a business can have. They concern the results of intellectual and creative effort. One key attraction of effectively commercialising and protecting IP is that a business can enhance its value in the eyes of investors and financing institutions. It is therefore crucial that businesses firstly understand what they have and then adopt measures to protect against ‘infringements’, in other words another party exploiting, copying or otherwise using your IP rights without your authorisation.
Research from the Federation of Small Businesses (FSB) suggests small firms are struggling to protect the identity and ideas at the heart of their businesses, with a quarter of the businesses surveyed by the FSB with intellectual property rights (25 per cent) suffering some sort of violation or wrongdoing within the last five years.
Lucy Marlow, solicitor at law firm Thomas Eggar LLP says, ‘To help protect a business’ IP rights, it is important to consider what strategies can be adopted to deter potential infringers.
‘One main way of achieving this is to emblazon the protected article in question with a special type of marking which communicates to the public that the IP right in question exists.’
For example, for copyright protected work you should mark the work (eg a photo, drawing etc) with the copyright symbol ©, followed by the name of the owner and the year of creation; for trademarks you can use ® symbol to show that you have a registered mark, and for unregistered trademarks you can use the TM symbol.
‘It is important that you only claim to hold a registered IP right if that is the case. It is also worth considering joining a trade organisation, such as ACID, which aims to raise awareness of IP and encourages the respect of IPrights.’
What to do when an IP infringement occurs?
But what should do if you find that another party is infringing your IP rights? Michael Shaw, attorney at Marks and Clerk LLP says that, in principle, a small company should take the same action as a large plc if its IP rights have been infringed. In practice, however, the position can be very different due to potential costs involved in IP litigation before the courts.
‘The first step is to seek legal advice on whether infringement does in fact arise, or whether the alleged infringer may have a defence to infringement. For instance, a claim of patent or registered design infringement could be avoided if the infringer has found some prior art that destroys the novelty of your patent or design,’ Shaw says.
If intellectual property infringements do arise, the first step is usually to draw the infringer’s attention to the infringement, by issuing a letter before action (sometimes called a ‘cease and desist letter’).
‘Any such letter needs to be worded very carefully, since it is very easy for such a letter to be deemed a groundless threat of infringement – if so, the infringer could then be in a position to take action against the owner of the IP right, so reversing the positions of the parties involved. It is therefore imperative that specialist legal advice is obtained before making any contact with an infringer,’ Shaw adds.
The hope is that, upon receipt of the letter before action, the infringer will cease their infringing activities and perhaps also agree to pay compensation to the IP right holder. Many IP disputes are resolved in this way, with settlement agreements being entered into to ensure that no further conflicts arise in the future.
If, however, the dispute cannot be resolved following the letter before action, it may be necessary to escalate matters. ‘The most common method is to bring infringement proceedings before the courts. It is now possible to sue for infringement at the IPEC (Intellectual Property Enterprise Court) at a much lower cost than infringement proceedings before the High Court. Furthermore, in some cases it is possible to use the small claims track at the IPEC,’ says Shaw.
However, civil proceedings are not the only option. The infringement in question might amount to a criminal offence that Trading Standards might wish to pursue. Alternatively, the UK Border Agency may be willing to take action if infringing products are being imported into the EU. If the infringement relates to a trademark, it might be possible to file a complaint at the Advertising Standards Authority.
Will IP rights be enforced?
Lorna Brazell, a partner in charge of the Intellectual Property team at Osbourne Clarke, says that many businesses take a cynical view that IP rights will rarely be enforced or simply see how long they can get away with it.
‘So, if they ignore you, or respond but do not back down, then a letter from a solicitor may change their mind: If they respond giving arguments as to why they do not infringe, then you have options – of taking legal advice or, more cheaply, it may be possible to get an Opinion from the Intellectual Property Office setting out whether or not your rights are indeed infringed,’ she says.
The Intellectual Property Office also runs a mediation service which is a way of getting expert assistance without paying too much – provided you can get the infringer to agree to mediate.
If the infringer will neither back down nor mediate then you can take a claim in the Intellectual Property Enterprise Court, which has a small claims track for low value claims where you do not need to instruct a lawyer, so you can represent yourself.
FSB national chairman John Allan says, ‘Intellectual property is a fundamental building block if the UK is to become the best country in the world for innovation and creative services.
‘Small businesses must be better supported in harnessing intellectual property in the UK and overseas.’
The Federation of Small Businesses is the UK’s largest campaigning pressure group promoting and protecting the interests of the self-employed and owners of small firms. Formed in 1974, it now has around 200,000 members across 33 regions and 188 branches.