Tag Archives: Intellectual Property

SMEs and IP - FSB Reports They Struggle To Protect Their Intellectual Property

SMEs And IP – FSB Reports They Struggle To Protect Their Intellectual Property

SMEs and IP - FSB Reports They Struggle To Protect Their Intellectual PropertyA recent research from the Federation of Small Businesses (FSB) has revealed that the price to be paid by UK’s small firms and start up businesses to protect their intellectual property would very often cost them their ability to develop and innovate.

That is because taking care of your IP is costly and time-consuming and businesses often find the instruments provided by the IPO to help secure IP rights too hard to use. As discussed in our Guide For Start Ups Part 1 and Part 2, protecting intellectual property is crucial for the UK’s growing knowledge economy, and it is questionable whether companies should be directed to do the work themselves.

Many companies suffer losses because they do not effectively protect their range of IP rights.

The research surveyed more than 1,000 of FSB’s 200,000 members. Only 32% had actually spent money to secure their IP rights within the last five years, 22% of whom invested more than £5,000. These figures speak about the lack of awareness of SMEs as to the importance of IP protection for their businesses and how much damage it could cause. More importantly, around 25% of the businesses surveyed responded that they have suffered some form of violation or misuse of their IP and a third of them took no action over the theft because of lack of resources and information as to the correct routes and costs involved.

Unregistered rights

Interestingly, most of the infringements outlined are related to unregistered rights like copyright. This underlines the severity of the problem, namely that SMEs and start ups are not aware of the significance of their IP rights for their businesses, hence their passive attitude towards protecting them. They need to be “educated” on these issues and learn how to protect them so they can profit from their intangible assets. Once they realise this is possible, it will then make sense for them to take actions against perpetrators. Currently, only a small portion of those questioned acted upon IP infringement.

The FSB chairman, John Allan has also underlined this issue by stating that ‘The knowledge economy, which runs on innovative ideas and brands, is becoming ever more critical to our economic success. Left unchecked, theft and infringement of ideas, patents and brand costs small businesses and diminishes their appetite to invest in their business, ultimately hampering the UK’s long-term economic growth.’

The proper protection of IP is a “mainstream issue which deserves a mainstream focus”, continues Allan. Therefore, we need effective tools to help secure and protect intellectual property rights.

IPO tools

The Intellectual Property Office has addressed this problem by putting in place various tools and services to deal with the effective protection of IP. The IPO’s mediation service, the IP Enterprise Court’s small claims track and the intellectual property finance toolkit are good examples. And yet SMEs find them too costly or difficult to work with. The FSB is advocating for simplification in order to encourage a proactive approach to IP by SMEs and start ups.

The onus is on the Government to better promote the IP services available and install effective instruments that will enable adequate protection. Back in 2011, the Hargreaves Review suggested that “there are outstanding uses that need to be resolved” Therefore, there is a need for a collective action to resolve this problem.

On the one hand, those who are aware of the strength that IP brings it, should promote this idea persuasively, and, on the other hand, the Government, the IPO and other institutions need to make sure they provide the most effective tools for this to happen. In the end, the benefit will be for all of us – because in UK’s growing knowledge economy, businesses increasingly rely on their intangible assets. And more often than not do these assets turn out to be more profitable than the tangibles.

Arbitration As An Alternative Dispute Resolution Method in IP – Pros and Cons

Arbitration As An Alternative Dispute Resolution Method In IP – Pros And Cons

Arbitration As An Alternative Dispute Resolution Method in IP – Pros and ConsWith the recent launch of the Independent Press Standards Organisation’s (Ipso) consultation into setting up a pilot arbitration service to widen access to justice, it is interesting to consider the advantages of arbitration as an alternative dispute resolution method.

Arbitration has increased its popularity in recent years, and could be very advantageous in IP matters due to its flexibility, private and confidential nature.

Before agreeing to use arbitration to resolve a dispute, it’s important to explore the pros and cons of the option. The main arguments in favour of arbitration in IP disputes include:

+        Privacy

When it comes to IP, especially with trademarks and patents, companies with rich IP portfolios have an incentive to keep any dispute private so that their IP does not suffer in any way. One of the perceived advantages of arbitration is its confidentiality. Parties can keep the nature of their dispute and all other details private. This is essential in some IP disputes especially when sensitive and secret information is involved. For example, in a dispute relating to a trade secret or a patent, a lot of confidential matters will be discussed. In such circumstances, it would be crucial for the owner of the IP to keep the matter private and confidential and make sure any business secrets remain hidden.

Of course, it should be noted that courts in civil litigation would also treat particularly sensitive information as confidential as well, and in this sense there will not be huge difference between both.

Another consideration is that parties could adopt strategies and measures that wouldn’t be available to them if the dispute were public in case it would be harmful or embarrassing to their reputation. In that way a party could act unfairly or inequitably, and yet be awarded the relevant remedy.

Still, one of the main advantages when it comes to arbitration is the very high level of confidentiality of the dispute it guarantees. This is fundamentally crucial for businesses whose reputation and future success are primarily based on intellectual property.

+        Flexibility and better price

Arbitration brings with it the choice of jurisdiction, arbitrator, and language and by doing so ensures an impartial and neutral process. The chosen arbitrator would be an expert in the field. And in a technical and specialised field such as IP, it is important to have someone with industry knowledge to have the competence to decide the matter. However, in jurisdictions where the court systems provide experts in the IP field, this advantage of the arbitration system would not be that significant. What is more, sometimes the act of choosing the arbitrator could lead to suspicion of bias and unfair outcome.

It is also suggested that arbitration is a better option from a financial point of view and is less time consuming as well. The International Survey on Dispute Resolution in Technology Transactions concluded that survey participants spent significantly more time and had higher costs in court litigation than in arbitration and mediation. In US terms this means that in courts parties spent approximately three years and $475,000 while arbitration lasted only a year and cost around $400,000 (WIPO, 2013). However, linking this to my next point, often the length of the dispute could be a reason for the increased cost of arbitration. For example, sometimes it takes from six to nine months just for the arbitration panel to be settled.

+        Shortened procedure

Generally, it is said that arbitration is much faster than court proceedings and there is practical evidence for this as mentioned above. This is due to various reasons related to the characteristics of arbitration one of which could include one of its disadvantages, namely the finality of appeal.

And although it is assumed that arbitration is usually the faster dispute resolution method, there are some arbitration cases which have lasted so long that arbitrators retired and were replaced by their colleagues. This is because the longer the dispute, the higher the price.

These were the main reasons why parties decide to go ahead with arbitration. But one needs to be fully aware of the contra-arguments related to this method. The negative side of arbitration is related more to the consequences flowing from that choice of ADR.

-          Not necessarily that cheap and quick

At first arbitration may seem the better choice from a financial point of view especially if the court litigation is as pricy as in the UK. And in many instances it would be. However, as already mentioned, some disputes may last for so long so as to incur costs leading to bankruptcy of a business. Therefore, one needs to explore the options in detail, bear in mind this danger and consult with a professional as to what the impact for the business could be. And in the context of IP, where IP rights are all a business has as an asset, it is likely that the business gets in trouble simply because it is too difficult to evaluate IP rights and use them as a collateral for a loan for example. And it could end up in a situation where the business does not have the money to proceed with arbitration.

-          Finality of appeal

In contrast to court proceedings, arbitration does not give the parties an opportunity to appeal a decision. That is, the decision of the arbitrator is final and binding and that would be the end of the matter. This is of fundamental significance and should be acknowledged when the decision to agree to arbitration is taken. And the chances to be satisfied by the arbitrator’s decision are as high as the chances not to be. Therefore, one needs to balance the pros and cons and decide whether to take the risk.

To summarise this brief outline of pros and cons for arbitration, it is crucial to say that arbitration could be a double-edged sword. On the one hand, it could be helpful for your business especially where reputational issues are at stake. However, on the other hand, it could be a big risk to take especially for SMEs with small IP portfolios who may not be able to bear the eventual high cost of arbitration.

What will be of the future of 3D trade marks?

3D Trademarks – No Breaks For Kit-Kat

What will be of the future of 3D trade marks? The latest in Nestlé’s attempts to trademark its iconic four-finger chocolate is at odds with EU Law.

Back in 2012 we reported in our blog Can you trademark a colour? that Cadbury had managed to secure a trademark for its signature purple colour after a lengthy battle with Nestlé. If you have been following the race for confectionary supremacy between Nestlé and Cadbury, you will know that in 2013 Nestlé successfully blocked Cadbury from maintaining its trademark rights in the colour purple ‘pantone 2865c’ for its Dairy Milk chocolate bar.

Cadbury’s application did not meet the criteria of a trademark, namely that ‘predominantly’ purple was not specific enough and lacked objectivity for the purpose of registration. See here.

Nestlé are set to see a similar fate in the latest turn of events.

What does this mean for the future of 3D shape marks?

Yesterday it was reported that the Advocate-General (AG) has advised that the Nestlé’s application for the three-dimensional ‘Kit-Kat’ shape is not compliant with EU law.  Although not an official ruling, it poses a serious threat to the future of three dimensional trademarks.

Life in 3D

Three dimensional trademarks are notoriously difficult to register. Why? Because a registered trademark grants perpetual monopoly rights and, because, the registration of these marks provide an enormous advantage in highly competitive markets where products are homogenous or differ only by a few features.

Having a trademark means that no one else can use the same or similar shape for the same or similar goods. This is generally considered anti-competitive.

To this extent, shape marks play a crucial role in the multi-dimensional aspect of a brand’s distinctive character. A trademark acts as an agent of a commercial strategy, and shapes are one of the foundations to a successful marketing campaign.

In our piece about ‘Coca Cola Bottle Granted Trademark Protection in Japan’ we mentioned the Coca-Cola bottle, which seems to be one of the few shapes on the market which has been able to achieve trademark protection in many different countries. It only takes a few moments to think of that bottle and realise how many international campaigns, advertisements and references are based on this one shape.

To be or not be?

In a recent article by the Guardian, Iain Connor, head of Pinsent Masons’ contentious IP practice, stated that the AG’s “opinion is entirely consistent with the court’s previous refusal to grant trademark protection for Lego bricks and so comes as no surprise.”

It is not so clear cut, however. The general rules are that you can’t register a 3D mark, even if it has acquired a level of distinctiveness, if:

1. The shape results from the nature of the goods, i.e. you’d have a hard time registering the shape of a banana for bananas;

2. The shape is necessary to obtain a technical function; and

3. The shape adds substantial value to the goods. (What this value is, is inconclusive).

Lego had failed to register its toy bricks because the shape was necessary to connect one brick to another. Philips had failed to register its 3 headed shaver for similar functional reasons. On the other hand, the triangular Toblerone pack enjoys trademark protection which, arguably, makes it easier to package the confectionary in bulk. Is that not a technical function? Chrysler were also able to register the front ‘seven slot’ grill of their Jeep vehicle which, in the author’s opinion, serves the technical function of cooling the engine. The court’s interpretation of these ‘exotic’ trademarks is therefore far from consistent.

To draw the distinction is a conceptually difficult task. For instance, the shape of a chocolate bar with ridged indents is no less necessary to break the fingers off than a Toblerone is good for stacking; a Cola bottle is useful for containing Coca-Cola; and the holes in the front of your car prevent your engine from exploding.

The argument put forward by Cadbury was that without the branding and logo the shape was not distinctive enough to warrant a trademark. However, a street survey revealed that 90% of consumers recognised the chocolate bar (without its packaging) as a ‘Kit-Kat’.

If it is all about packaging, however, then the court offers no less abstract guidance. Last summer, Apple Inc. were able to trademark the layout of their store. The CJEU came to the conclusion that, somehow, the Apple store is equivalent to ‘packaging’. See here at para. 16.

The author’s view is that the ruling (whilst a coincidently accurate metaphor for corporate culture) defies the whole point of specificity and objectivity. Not all Apple stores are the same, and if the design alone is such that it presents the services provided, then does Cadbury’s ‘predominantly’ purple ‘packaging’ or Nestlé’s four-finger chocolate bar not present ‘Dairy Milk’ and ‘Kit-Kat’ in much the same way?

The ‘certain’ circumstances for registration 3D trademarks are not so certain after all.

Trademarks unchained

Shape marks are construed narrowly because of the commercial power which they yield. However, to what extent does a company have to sacrifice its distinctiveness for the good of its competitors?

Modern advertising and marketing practices now incorporate far more than your standard bill-board and infomercial. Companies are awakening to the fact that the most powerful advertiser is the consumer himself. The one who is inadvertently a brand ambassador carrying ‘lifestyle’ products for the world to see.

The shape of a product is therefore more important than ever before. It helps preserve the individuality of the product and uniqueness of its brand and it creates something completely different from the myriad of the commonplace. Sooner or later, a reform of trademark law will need to take into consideration this new function of trademarks.


Azrights #Foodporn

Intellectual Property & Food Photography – 3 Steps To Innovation

What are you doing with your food?

We all have something to say when it comes to food but the real question is what are you doing with it? Other than eating it of course, the movers and shakers of the digital age have found innovative ways to give you more than just a culinary experience.

Recently we wrote about ‘Is Posting Photos On Twitter A Breach Of Chef’s IP?‘ where we explored the relatively new phenomenon of taking pictures of the food we eat while at restaurants. Albeit commonplace, many restaurants, particularly some chefs, have seen this as an appropriation of their intellectual property.

1.       Identify your intellectual property and where its value lies

In our post ‘Is Posting Photos On Twitter A Breach Of Chef’s IP?‘ we looked at what intellectual property elements are involved in making and preparing food, as well as taking photos of it. We concluded that intellectual property will not protect your meal because of the underlying element of fixation that is required in order to be able to define what it is you are trying to protect. You can’t eat someone’s copyright nor would you expect to eat their trade mark, as Lord Justice Jacob expressed in his ruling referring to Bongrain’s cheese trade mark application.

Sombre news as it may be for some, others in the industry have taken advantage of the phenomenon, embracing innovation and turning it into profitable opportunities.

2.       Don’t do what everyone else is doing, take advantage of what it is they are doing!

In the last couple of months we’ve stumbled across some truly innovative ideas. Israeli based winery ‘Carmel Winery’ have come up with an interesting take of photographing your food with a viewing to uploading it onto social media. It is called: Foodography, and it is a project born by the “art of food image capture using a smartphone”. In essence, it involves a series of specially designed plates which (are protectable through Design law) allow you to take the most artistic image of your meal possible using your smartphone, see the how it works here.

Those of a more traditional disposition may see this concept as completely bizarre, however, it is more than just a mere gimmick. A recent article in business insider reveals that some chefs are embracing this digital phenomenon, also known as #Foodporn, and using it to their advantage. A good food shot can result in increased publicity and bookings for the restaurant. Certainly those restaurants equipped with specially designed plates that turn every amateur using their phone into a professional food photographer, and critic, wield a lot of commercial power.

3.       Go the extra mile

The trail doesn’t stop there, however. A new app developed by Google can now count the number of calories in your food through your Instagram photos. Im2Calories incorporates artificial intelligence which uses algorithms to estimate the number of calories in your food photos. Unlike the food you eat, this software is protectable by copyright and patent legislation. The real challenge is how big can you stretch your idea?

One thing is certain, the #Foodporn revolution is real and companies are commercialising it. The key is to understand where the value of your idea lies. Chances are that your winning recipe will only be half the ticket. Your appetite for innovation on the other hand extends the commercial opportunity beyond mere gustatory and olfactory senses.

Image rights

Image Rights – How Much Control Do You Have Over Your Image?

Image rightsLast week, the Republic of Ireland readied themselves to vote on what was, for a catholic state, a very controversial referendum; yes or no to gay marriage. The BBC reported here how one family in particular had other controversial concerns about the referendum for an altogether different yet important reason.

This family, unknown to them, were made the “poster boy” of the No campaign. In 2014 they had signed up for a free family photoshoot. In return the family provided consent for the photographer to sell these photos on stock image websites. Their photo was displayed amongst many other seemingly similar photos.  The family felt unfortunate to have been selected for this purpose.

Although the family morally disagree with the use of their stock photo for the No campaign they accept there is nothing they can do to prevent use of their image in this way.

There are many considerations to be made when assigning or licencing your rights; not only in relation to use of your image but also when granting permission for others to use your music, literature and branding materials such as trade marks and logos.

Not giving enough thought to the implications of a licence or an assignment can have unintended effects financial consequences as well sometimes, so take care to consider documents you are asked to sign carefully and if you aren’t sure seek legal advice.

Which tech city will you start your start-up

Startups – Where Will The Next Tech City Be Located?

Which tech city will you start your start-up

Now that the Conservatives have gained another term in government it is likely that they will press ahead with many of their pledges. Of particular interest are the proposals set out in George Osborne’s recent Budget Plan for 2015.

The Chancellor of the Exchequer has offered a series of measures to support the technology sector, including:

  • £11m in tech hubs in Manchester, Leeds and Sheffield
  • £60m in energy research to develop energy technologies of the future
  • Funding to develop a financial technology incubator in Leeds

He has also offered greater incentives such as tax breaks for video games makers, £100m for automotive groups working on driverless car technology and a £40m in investment into research into the “internet of things”.

In summary, the 2015 budget offers a substantial investment for the technology sector and a real opportunity for entrepreneurs and enterprises to gain a foothold in our increasingly profitable technology sector.

Where is the next tech city?

When it comes to commercialising your concepts there are a lot of factors that play into the overall success of an enterprise. One of them is being in the right place at the right time. So, a few things to look out for when assessing the market landscape are:

Location of Growth Opportunities:

A survey of the digital economy by Tech City UK has found that 74 per cent of companies and 85 per cent of workers are now located outside the capital. With rent prices increasing in London, the surge in competition and tight venture capital practices, the North sets to be a go-to destination for those who wish to keep costs low and take advantage of government investment. For those entrepreneurs in the FinTech sectors this is notable. With the industry growing from $4Bn in 2013 to $12Bn to 2014, you may want to consider nestling up in Leeds where a new FinTech incubator is on the cards as it may well become the hotbed for investors in the near future. For those who like the sea, consider Bournemouth and Liverpool which have already outstripped London in terms of growth while the Midlands is set to be home to new energy technology research hubs.

Increased Revenue:

So far Greater Manchester, Belfast, Sheffield, inner London and South Wales are home to tech clusters. However, about 90% of all digital companies in the UK, which are mostly small and medium-sized, expect revenue growth this year. For would be investors and those looking to set up shop it is important that opportunities outside of London’s silicon roundabout should also be considered. .

Consolidating Market Position:

Depending on your business, operating from London might limit your opportunities as there will be increased competition or limited regional capacity. Branching out may help you consolidate your market position but could also help in minimising your competition in the long run.

Fortifying your domestic position by taking advantage of this significant investment may also have a positive effect on international opportunities. Currently, the Euro is very weak and given competitive prices and the rate of growth, this may attract a lot of foreign investment, which everyone should keep an eye out for.

World IP Day

World IP Day 2015: A Change In The Tide For Music?

World IP DayOn 26 April, World Intellectual Property Day… celebrate[d] music with the aim of promoting discussion of the role of IP in encouraging innovation and creativity.

As a part of this, there [were] …discussions across the globe exploring some of the challenges and subsequent changes shaping the music industry today.

A key change in the music industry

One of the key changes in recent years has been the way that we can access music. Streaming has becoming one of the most popular ways to access music with 60 million users signed up to industry leader Spotify.

However, many artists didn’t feel that letting the general public listen to their music for free was fair on the artist. With this in mind, last month, American rapper and producer, Jay Z, launched a rival platform called ‘Tidal’ – with the view that through this service (with no ‘free’ option), artists would be paid for their work. At $20-per-month, Tidal promises exclusive content and videos that other streaming services will not have access to. Artists, such as Rihanna, Usher, Madonna and Beyonce have all aligned themselves to Tidal, with Jay-Z saying the platform was going to ‘forever change the course of music history’, ‘allowing art to flourish’.

To read more about the impact of Tidal on the intellectual property debate within the music industry please visit: http://www.shoosmiths.co.uk/client-resources/legal-updates/world-intellectual-property-day-change-for-music-9654.aspx

Naming a brand

Naming A Company? How Can You Avoid Trademark Disasters?

Naming a brand When choosing a new name, it can be confusing to know the order in which to do things – such as registering domain names, a company name, designing a new logo and so on.

People tend to do all these things and then only at the end of a branding project do they turn to a lawyer to protect the brand. This is the wrong way to go about it because if you’ve chosen a name that infringes on somebody else’s rights, it leaves little scope to choose a better name. You will have invested time and resources in the name, and may be tempted to continue to use that name, despite the very real and serious risks.

So, what due diligence can you carry out yourself? And when do you need the expertise of an appropriately experienced intellectual property lawyer?

Well the first point to be aware of is that the domain name or company name’s availability does not mean you may use the name. It depends what you want to use the name for.

Carrying out your own checks to settle on a shortlist 

A key question is whether the name is in use by a competitor, who may have registered it as a trademark or built up unregistered rights in the name.

So, do some Google research. If you find somebody else is already using the same or a similar name within the same or a similar industry sector, then beware.

However, if someone is using a similar name, the next question is to look at where they are located. If they are based outside the geographic area in which you will do business, then you may be alright to use the name. However, it does depend.

Assess the Google search result by asking yourself whether the country the other entity is based in is relevant; whether they are potential competitors, and whether they have customers in your territory or online. If the entity using a similar name might be selling their product in the UK (say via an estore), then you may have problems using the name.

If you find nothing, this is not conclusive. For example, not all websites are search-engine friendly, and not all products are promoted by names online. In some cases, someone could have registered a mark and not started using it yet, as it’s possible to register a name for up to five years before using it.

Checking the trademark registers.

That’s why you also need to do a search of the trademark registers.

The trademark registers are public, which means that anyone can search them to discover whether someone else has already registered the same brand name. If the name is registered that means you can avoid investing on marketing, graphics, websites and so on using that name.

This is a central function of the registers, putting others on notice of their rights. However, if the name is not already registered it does not mean you’re in the clear. Is a similar name registered?

Increasingly, the search facilities provided by the trademark registries are quite sophisticated so that it’s possible to find out whether similar names are already registered too – not just exactly the same name. If you do find similar registrations, then you need to take a view as to whether the owner of one of those marks might object to your use of a similar name. If you can’t work it out, then you should pay a lawyer for a legal opinion.

How a professional can help

While I’m more than happy to provide information to help people assess the risks for themselves, it is not possible to provide opinions on specific names without being engaged to provide the service.  Often it is necessary to consult the registers before an opinion can be provided.

It’s important to appreciate that initial checks do not replace the need for legal advice, but are a step to take before settling on a few possible names.

By carrying out these searches, choosing names carefully, and immediately discarding names which are obviously already in use by others, you will save yourself a lot of expense and disappointment. You will also find a shortlist of worthwhile names to ask a lawyer to assess for you.

If you get the green light, you should consider registering a trademark at the same time. That is the way to ensure the name is uniquely yours to use and that someone else doesn’t start using the same name in a way where your two  businesses might be confused for one another. It costs a lot of money to resolve such disputes. A registration is much cheaper than costly litigation.

As a firm we suggest clients use the resources available for preliminary due diligence of their own, and then take professional advice if it matters to you to avoid litigation, or to have a name that you can uniquely own.

Finally, remember that not all names are capable of being trademarked, so a lawyer can add significant value to any naming exercise as they are best placed to advise whether your chosen name is capable of functioning as a trade mark. .

EPO ruling on patent cases for conventional plants

New EPO Ruling On Conventional Plants Creates Controversy

EPO ruling on patent cases for conventional plants

At the end of March the EPO issued two decisions in the highly publicised Tomato II and Broccoli II cases. Both of these cases involved seeds for plants that were grown conventionally or through “biological breeding methods involving cross and selection.” The EPO’s highest court stated that such seeds were patentable.

Following the March decision in both cases, “civil society reacted quickly to say that the EPO is favouring giant argochemicial companies… to the detriment of small breeders and consumers”. The concern of such groups is that there will be little incentive for innovation and that the decision, which cannot be challenged, as it was made by the highest court, “will be used to bypass the current legislation in Europe, according to which conventional selection processes on plant and animals cannot be patented…”.

To learn more about these decisions, the significance of these cases and the reactions to the decisions, please see: http://www.ip-watch.org/2015/04/01/epo-backs-patents-on-conventional-plants-broccoli-tomato-cases-decided/