What counts as your intellectual property (IP) may surprise you – and protecting it is often not as expensive as you might think. So, what is the story for SMEs, and are there areas where you could be making your IP work harder for you?“

Many companies, especially smaller ones, don’t usually think of protecting their designs and trade marks,” says Gifty Gakpetor, a chartered trade mark attorney and director of IPTogether. “Either they don’t really understand the whole concept of IP and the wealth it creates for them or it’s a matter of perceived cost – not thinking about the value of long-term investment in protection.”

Actually, Gakpetor explains that while patents can be very expensive, the costs are not that significant when it comes to trade marks and designs – and it is these latter two that most small companies are going to want to protect.

Now would be a good time to look at some definitions in order to ensure we know exactly what we are talking about when we discuss IP.

Trade mark and copyright are two of the most important terms that will emerge while discussing IP. The definition of the former, as explained by Gakpetor, is: “Insignia in trade which identifies you as the owner of your goods or services to make it clear they belong to you.” Trade mark distinguishes one business from the other. Names and logos are the most common form of trademark, but shape, pattern, colour, sound, motion, holograms, smell and multimedia can all be registered.

It is necessary to understand that simply registering your company name or owning a domain name gives you “virtually no legal rights” to prevent someone else from using your name or logo. This astonishing fact demonstrates how vital it is to take your IP seriously.

“Having a registered trademark enables you to stop others using the same or similar insignia in trade which can be confused with yours,” says Gakpetor. Further down the line, “they are valuable business assets that you can leverage or sell”.

Copyright protects literary and artistic works that are original. Sound recordings, films, broadcasts, musical and dramatic works are all protected. This is automatic in the UK (ie, it doesn’t need to be paid for), but in some countries it will be necessary to apply to protect them just the same way as you would for your trade marks. Copyright only protects you from being copied without the permission of the creator or licence holder, adds Gakpetor.

Other terms that should be known include designs (which protect the look of an item, not how it works); trade secrets (any confidential business information that provides an organisation with a competitive edge); and patents (which protect inventions; things that are new or where the invention is an improvement of the prior art).

There are some limitations among these that need to be considered, as Gakpetor explained:

• While trademarks offer indefinite protection, they are subject to renewal every 10 years.
• Broadly speaking, copyright lasts for the creator’s lifetime, plus 70 years after their death. The layout of newspapers, magazines and books is protected by publisher’s right, which lasts for 25 years from the date of creation.
• Registered designs last for 25 years and are subject to renewal every five years.
• A patent gives you a monopoly right to take legal action to stop any competition to your invention for a limited period, normally 20 years. 

Most of the IP protections SMEs are likely to need will involve trade marks and designs rather than patents. “If you think you’ve created something that hasn’t been done before, handle it very carefully,” says Dawn Franklin, managing director of Brandright. “Never show it to anyone unless they are bound by confidentiality agreements and talk to a patent attorney about it. If you reveal it in any form, it may prevent you getting the patent.”

Franklin emphasises that “most of the things companies develop are not patentable, because there is no invented step – someone, somewhere, will have done something similar before.”

In practice, what should you consider when thinking about what to protect? “Your brand is, arguably, your most valuable asset,” says John Noble, director at the British Brands Group. The brand creates your reputation, your image in the mind of the public and is the signal that leads someone to choose you, rather than a competitor. Companies should protect anything that relates to, and triggers thoughts of, your company and your reputation in the mind of the customer.

“For example, think about the red phone and jingle that’s associated with Direct Line Insurance,” says Noble. “Customers recognise that in a fraction of a second.” This is also true for the distinctive typeface of a Mars bar, or the shape of a Toblerone box. “You don’t need to see the whole thing to recognise it – it’s not just about the logo.”

Noble calls these marketing properties. “This is about heuristics – mental shortcuts that allow us to recall the world very quickly,” he says. “We operate in a fast-moving world and these are the cues that help us navigate it.”

Mention the golden arches, for example, and it’s likely that you would not only connect McDonald’s, but you would have a whole range of emotions, sensations and responses to it – whether you like the products or not.

This is how consumers understand markets and influence their buying decisions. It makes your IP extremely valuable.

“Any company needs to understand what its marketable properties are,” says Noble. It can be the difference between a customer choosing you over a competitor, and it can also ensure customers come back to you rather than drifting elsewhere.

Cybersquatters – described by Franklin as opportunists – look to see what others are doing and blackmail them into paying for their own rights. “If you apply for a trade mark, someone will see that application and think, ‘I can file a domain name for that’,” says Franklin.

To avoid this, register your domain name before you go public with applying for a trade mark. “Bear in mind, you will also want to register a few permutations or similarities to your desired domain site.”

You should also be aware of ‘trade mark trolls’, who register trade marks without any intention of using them and then try to sue businesses that adopt similar trade marks in their legitimate business practices.

Typo squatting is another thing to be aware of. “Typo squatting is where someone might create a domain that looks like yours but with a couple of incorrect letters,” says Noble. “When you type in an address wrongly, the fake site will then come up.”

Noble recommends not paying up. “Go to the domain name registry and say, this person is misleading consumers. A lawyer will be able to give you the right advice.”

What should you do if you feel your IP is being abused by another company? “Essentially, it’s a balance of costs and practicality,” says Noble. “The first step is to be really clear on your rights, then send letters to the people concerned outlining your rights and saying, reasonably, to stop what they’re doing.”

This is known as a cease-and-desist letter. “When an infringement comes up, many rights owners are not after damages or punishment – they just want the practice to stop,” Noble adds. “Your IP specialist can also help assess whether there’s scope for mediation. It’s always desirable to keep costs down and cutting a path like this will be better than going to court – not to mention more time efficient.”

IP disputes can be a minefield if you do not know how to navigate them properly. “The process is to contact a trade mark attorney,” says Gakpetor. “They will help advise you and put together a strategy for you to manoeuvre through IP law. Bear in mind that some who offer trade mark advice are not all chartered; they won’t have the same training. The person you use needs to understand that highly regulated environment.”

For smaller claims, look at the Intellectual Property Enterprise Court. For mediation, the Intellectual Property Office offers sessions with rates that are highly preferable to ending up in court (see their Intellectual property mediation guidance). “This can be a quicker and easier way of getting a judgement than a full legal approach,” says Gakpetor.

Before you fire off the letter, think about the bigger picture. “If the perceived offender is very small, is there really an issue?” says Franklin. “Can we curtail the worst of any damage and find ways we can get a working arrangement that may be acceptable to both? At least three-quarters of the issues that come my way could have been resolved by talking to the other party and finding an outcome that both are happy with.”

This does not mean restricting the result, “but being willing to talk about a solution other than saying ‘we’re going all-out to stop you’.” And remember that someone might not be infringing your trade marks if they are using the same name, but in a different field. “Lotus cars are not the same as Lotus paper towels; and then there’s Lotus shoes,” points out Noble. Lotus shoes are not treading on the toes – as it were – of the other businesses, because the trades are unlikely to be confused.

You should also ensure contracts are in place with employees, asserting that any IP they produce belongs to the organisation, not the individual. This can cause problems retroactively if it is not specified.

Rules do differ from country to country, as Gakpetor explains: “If you are thinking of exporting, look at protecting your trademarks in those export countries.” Trademarks and designs are very jurisdictional. “You can’t, for example, say that you are importing into Canada and have your IP registered there, and are therefore protected anywhere in the world.”

It works the other way as well; you might be protected here, but that does not stop someone else using what you might think is your IP elsewhere. “Due diligence is always key,” says Gakpetor. IP is a specialist and complex part of law, so an expert is always recommended. “A watch service will help you place your protection globally,” adds Franklin. “You’ll be alerted if someone tries to file the same trade mark.”

When deciding where to protect, there is a six-month window once you have applied for registration in one country in which to file your trade mark and then decide what other countries you are protecting in. But even the largest companies, Franklin says, cannot protect a trade mark across the world. “Especially because, in the early stages, you don’t know whether a particular product will succeed in the market, and certainly not in all markets.” Franklin recommends having a clear plan and reviewing it at regular intervals.

John Noble takes up this point. “The IP regime can be frustrating because rights are very specific and technical. What you can and cannot trade mark, for example, is technical and quite a creative art; therefore, trade mark attorneys are so important in helping companies.”

There are also corporate reporting considerations. “To the extent that, as an in-house trade mark attorney, you would be writing reports on how many trade marks you are protecting, how many conflicts there are, and whether there is any litigation – these activities have an impact on your tax, regulatory environment and budget,” explains Gakpetor.

When it comes to measuring your IP, the problem is it often turns it into a discussion about money, whereas much of the value in a brand is intangible. ”You’re missing out if you don’t allow for that,” says Franklin. “It’s both an art and a science. Yes, there are valuation experts and standards you can apply. But you can do all the valuation, come up with an accurate figure and next week something horrendous happens and the value drops like a stone.” The reverse can happen too – it can suddenly go up. “You have to be aware of the things that cause fluctuations.”

But it is true to say that IP can be valued and sold on. That value is easier to calculate when it has been protected; another reason to ensure your trade marks and designs are registered. The Thomas Cook brand name, for example, has just been purchased for £11m.

“For most businesses, the brand is their most valuable asset and yet very few recognise this fact,” concludes Franklin. “At board level, they might spend a tiny fraction of their time talking about their brand. There’s so much inherent value that just isn’t being exploited."

• Know what you are protecting and what you might be missing out on. “The main thing is to develop an awareness,” says Gakpetor. “You’ll be surprised how little it actually costs to protect your trade marks and designs.
• There are different ways to resolve a dispute. “Letter, negotiation, mediation, enterprise court, full legal proceedings tend to be the escalation, though that is not step-by-step,” says John Noble.
• Do not fail to realise your assets. “You might not be aware of what constitutes a trade mark or a design that you want to protect. It can always be useful to seek early connection with a chartered trade mark attorney to help you,” says Gakpetor
• The brand is the thing. “Bear in mind that IP is simply the technical process by which you are protecting your brand,” says Dawn Franklin. “Don’t separate the brand from the IP.

Download pdf article:

• How to look after your IP
  Business & Management Magazine, Issue 280, December 2019/January 2020

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