Last reviewed 27 April 2022
All businesses need to innovate to remain competitive in their markets. But how does your company protect these innovations, asks Dave Howell?
According to the IPO (Intellectual Property Office), nearly three-quarters (70%) of any business’ value is the intangible assets it possesses and creates. Therefore, protecting IP (Intellectual Property) is now more critical than it has ever been.
As companies become data businesses, and with the expansion of digital assets coupled with new virtual spaces such as the Metaverse, plus the rise of NFT’s (Non-Fungible Tokens) and the practical application of the Blockchain and distributed ledger, reducing the instances of IP infringement is a clear imperative for all businesses no matter their size.
In essence, IP protection can the broken down into several well-defined categories: copyright, registered design, trademarks and patents. Each category of IP protection requires different levels of registration. The IPO has a handy IP checker to help you identify what protection applies to your company's assets.
Depending on the type of IP your business needs to protect, one or more of these registration processes may be necessary. In many cases, new products will require a patent and potentially a trademark and design protection. Therefore, it is critical to gain the expert advice of specialised patent or trademark lawyers to ensure your business’ IP is fully protected.
IP protection will often focus on a specific product, but IP can also take other forms: the most important for businesses and organisations is protecting their brand. A brand can be the expression of images, colours, design elements, website address and today also audio and video components. Together, these form the identity of the business. Protecting these brand assets from infringement is essential, as branding enables your company to stand out from what can be a crowded marketplace.
In addition, paying close attention to the patent protection could actually save your business substantial amounts of Corporation Tax. The Patent Box scheme is designed to encourage companies to keep their IP in the UK. It is important to understand which patents may qualify and how this might connect to any R&D tax relief your business is or wants to claim. Seek qualified advice to ensure your application is valid.
It is also essential to appreciate that some IP protections — copyright is a good example — are often not universal or international, as Rachel Jones, CEO of SnapDragon Monitoring — an IP protection service aimed at smaller enterprises, told Croner-i:
“IP is territorial and since Brexit, those in the UK and Europe now need to consider these regions separately – with separate filings – which increases cost. Businesses in Europe can benefit from significant funding from the EUIPO to help with filings for trademarks. It is recommended they investigate this offer.”
Rachel continued: “You need to consider your priority territories – where you are going to trade, or manufacture your products? You must, must, must register your IP in places where you are manufacturing – even if sounds irrelevant in the early stages. It’s much better for you to own your trademark than for someone to copy your trademark and prevent you, the originator, from exporting or importing your own genuine product. You can only defend yourself and your brand in territories where you have IP protection, that’s the main thing to remember.”
Assets in virtual spaces also need to be protected. The much-publicised Metaverse could be the next major commercial environment businesses will trade within. Protecting brand and other assets in these virtual spaces is vital to understand.
We spoke with Laura Trapnell, head of the IP team at Paris Smith solicitors.
Is protecting IP now much easier than it has been in the past? Or is IP protection still a challenge, especially for smaller businesses?
“The challenge is understanding what IP you have and how to protect it effectively. Some IP (such as copyright and design right) arises automatically, and other IPs (such as trademarks, patents and registered design) require registration in the territory in which you are seeking protection. So, as with everything, protection is easy when you know what you are doing!
“Your first step should be to do an IP audit – find out what intellectual property rights you have; it is probably more than you think!
“Then think about which of those IP rights are most important to your business, what should you protect first, and what can wait? Some IPs (like patents and registered designs) must be new and novel at the time of filing. Other rights (such as trademarks) can be registered further down the line once a reputation has been built.
“The registered rights will require a financial budget, and this should be transparent and factored into your financial forecasts. Having an effective registration strategy which aligns with your commercial plan, will help you with budgeting and will focus your mind on what IP to protect and when.”
How should small businesses manage their IP protection outside of the UK?
“Regarding ‘unregistered IP rights’ such as copyright and design right, you may find that your IP rights are already enforceable in other countries by virtue of those countries being signed up to international treaties that ensure reciprocal enforceability for various IP rights. You will need a solicitor based within the particular locality to advise you on this.
“With regard to registered intellectual property such as patents, trademarks and registered designs, since Brexit, as with other international territories, UK business and individuals require an agent (located in the particular country where protection is sought) to act on their behalf. Look online to find the intellectual property office in the country where you want to protect your IP and they may have a list of attorneys that can help.”
Are there any tools that small businesses can use to protect their IP and then track potential infringements in the digital space?
“Most of the intellectual property offices have online applications now, but you will need local representation to respond to any issues that arise.
“There is no specific App that I am aware of to ‘track’ potential infringements, but you could keep on top of what your competitors are doing by:
Do regular Google searches regarding your competitors, your own products (what comes up when you google your own products?) and services.
File ‘watching notices’ for particular brand names at the different intellectual property offices and receive watch notices of similar applications.
Review new patent applications online via Espacenet and use this online service to search in different sectors.”
How has Brexit impacted the IP protection of UK small businesses?
“On Brexit, any EU registrations were nationalised in the UK systems and EU rights holders were given mirrored UK registrations. This has ensured that there were no one lost any rights and there should be no ‘gaps’ in their protection as a result of Brexit. However, UK individuals and businesses (including solicitors and IP attorneys) no longer have rights of audience in the EU IPO and EU representatives are now required to act on our behalf.”
Are there common mistakes that small business owners make when protecting their IP?
“The most common mistake that we see is not giving IP rights enough value within the business. Small businesses are often focused on cash flow. Using some of this to put into an IP strategy budget often seems not worth doing until either someone infringes their IP rights or accuses them of infringement.
“It is a shame, because so much can be done which can prevent (or flag) issues at an early stage without a huge amount of budget. We always recommend that businesses appoint a Board member to be responsible for the IP of the business, to carry out the IP audit and create an IP strategy – even if the strategy is 'to reconsider this next year' or 'by the end of the next financial year, we want to have conducted a full audit'. Just start the process of thinking about it.”
What is your view about IP protection of NFTs and IP protection in the Metaverse?
“This is an interesting issue! Theoretically, the actual NFT (either the artwork itself and/or the computer code behind it) might be capable of copyright protection as an artistic work or a graphic work under the Copyright Designs and Patents Act 1988 in the UK (or the appropriate legislation of the territory where the creator is a citizen) if the NFT fulfils the relevant criteria and is created by a qualifying individual.
“The ‘Metaverse’ is obviously not a physical place, so it is not a legally recognised territory. Therefore, any legal action would take place in the geographical location where an infringer is located or where the infringing activities are taking place.
“This is all very new technology, and we know, the legal world takes a little while to catch up – we have only recently seen legislative updates to accommodate digital copyright We shall see whether the legal space adapts quickly enough to cover these new ‘territories.’”
Today, protecting your company’s IP is a critical component of successful businesses. From brand protection to product innovation, always place the safety of these assets at the top of their development roadmap.
Also, don’t forget to think globally. A product or brand may be focused on the UK today, but it could quickly find an international market and audience. Protecting these assets across international territories is critical but can also be a complex process as IP protection can be managed quite differently in global regions. Always take qualified advice to ensure your business’s assets are fully protected everywhere your business trades.