One of the most puzzling findings in the analysis of British firms is the low proportion of patenting companies. In the UK, the share of firms patenting among those that reportedly innovated in 2013 is about four per cent.
The most important, and well-known, explanation of the low propensity to patent is that most firms are SMEs.
And in many cases, financial constraint, rather than competition, is the villain of the patent story among SMEs. It was with this thought in mind that Justin Simpson, founder of Inovia, tried to simplify and automate the application process for patents.
The company was created in 2000 when the dot com boom was taking off. And as several businesses capitalised on the internet, international patent applications started getting published online by the World Intellectual Property Office (WIPO).
“During that time I was a senior associate in a small patent firm, and saw that smaller company bosses simply couldn’t afford to take their inventions overseas because of the high patenting costs,” said Simpson. “When I looked closer I saw that patent firms were charging around £2,000 for simple administration charges for a standard letter asking a European attorney to file a patent application.
“So I used my computer science background to come up with an automated way of taking the published patent information, and generating the standard letters needed to file the patent overseas.”
Essentially, Simpson threatened to skip the middle man, and he suggested that patent attorney firms were none too happy with his challenge.
While a few welcomed the competition, Simpson heard lots of disparaging comments that were directed at Inovia – many of which Simpson came to hear about from prospective clients.
“I was, for a time, a pariah in the patent attorney industry,” he said. “So much so, that my wife, who’s also a patent attorney, kept her maiden name so people wouldn’t know that we were together!”
He claimed that it was only when he moved to America in 2004 that he started to garner more customers. Even then, it took ten years to be an overnight success, with larger firms now even using Inovia from time to time.
Simpson explained that one the best skills an entrepreneur can have is improvisation because nothing ever goes according to plan and you have to pick yourself up and go with Plan B, then Plan C… until eventually Plan K works.
“Another key element I learned in creating a successful business is that you should surround yourself with capable people whose skills make up for your deficiencies. I’m a great ideas guy, but I’m not that keen on managing, so I stepped down from the role of CEO and handed it to a very capable guy who did a much better job.
“It is crucial to hire staff two at a time. It’s very very hard to know during a job interview that the person you’ve hired will be the right person for the job. If you hire one, train them, and they don’t work out, you need to do the training all over again with the next one. But if you hire two at a time and train them both, chances are one of them will work out and they can train their new co-worker.”
In terms of looking into the future for the IP landscape in the UK, Simpson foresaw that the unitary patent would be the “biggest thing” to look out for.
This was echoed by Inovia’s sixth annual Global Patent & IP Trends indicator, which explained that in Europe the unitary patent – an agreement established in 2012 as a way to guarantee patent protection in 25 countries throughout Europe – was the main topic concerning professionals. The effect and success of the unitary patent has yet to be seen as the act is still being ratified by EU member states. Once the agreement is officially implemented, an enormous change in how to file throughout Europe will be felt.
“The unitary patent will involve some big changes to those European patents once they’ve been granted,” Simpson said. “Normally a UK patent firm makes a significant amount of money co-ordinating the validation of that granted European patent in the individual European countries. The unitary patent will give applicants the ability to pay one fee to cover just about all of the countries in Europe.
“The proposed system has had a lot of commentary and interest from corporates and patent firms alike. Patent attorneys who get involved in litigation tend to disparage the unitary patent because instead of having to litigate in 20 countries, patentees only need to litigate in one. I’m not surprised those litigation patent firms are against it because it means their litigation revenues will be cut by 95 per cent. I often hear them saying ‘oh, be careful, you don’t want to trust just one court to make a decision on your patent protection for the whole of Europe.’ But that’s exactly what I think companies want.”
Simpson is of the belief that the unitary patent will be a great thing for the IP community, saving applicants who file very broadly a great deal of money. He also stressed that bosses should spend money on drafting good quality new patent applications for their next wave of technology.