How to protect your IP in post-recession

The economy is now officially larger than it was before the recession began in 2008, according to the latest information from the Office of National Statistics. Many businesses may feel that the short-term future of the UK economy still looks and feels uncertain, but this is a perfect opportunity for them to review their IP portfolio. It may not be too late for those who have put this to one side during the recession, although much research has shown that those who have continued to spend during the downturn will fare better in the post-recession years than those who did not.

In the past and current economic climate it has been particularly difficult for businesses to decide where to spend shrinking budgets in order to maximise future gains. The issue is often whether there is a current need for something, which can lead to, for example, insurance policies being restricted to only basic cover. As a result, problems can then arise in the future when businesses find that the ‘need’ at that point is not covered by the restricted policies.

Making cutbacks in relation to the protection of your IP rights by failing to register a trade mark or design, or not applying for a patent, could seriously damage your business. In particular, a competitor could beat you to it or simply take the benefit of your hard work for itself. While the business may be able to fall back on unregistered rights, such as unregistered design, passing off (unregistered trade mark rights) and copyright, reliance on such rights is by no means fool proof and satisfactory results against competitors can be much harder to achieve. 

For example, copyright and unregistered design right only protect against copying. If a competitor launches a product made to your design, but has come up with that design independently, then you will have no right to bring a claim. If you had chosen to register your design, then whether or not your competitor had copied becomes irrelevant. For UK cover, the application fee payable to the Intellectual Property Office (IPO) is as little as £60.00, excluding professional fees. 

Another example lies in passing off actions, where one trader effectively trades off the goodwill built up by a competitor, suggesting that there is some formal association between the two businesses when there is not. These actions require the suing party to prove a sufficient level of goodwill. However, registering a trade mark (again, the fee can be as little as £170.00 – excluding professional fees) would allow you to pursue third-party infringement without having to prove goodwill – the mere fact that there is a registration is sufficient.

The starting point is to carefully examine what IP is owned by or licensed to your business. Carrying out a comprehensive IP audit will enable you to understand how and where IP is created in your business so that you can then effectively capture it and record it for future reference, including making applications for registered rights where appropriate. Once you have a protection policy in place, it makes commercial sense to enforce it where appropriate. This action will send out the right message to the marketplace that your business will not tolerate a third-party trying to unfairly steal a commercial advantage. Of course, it is cheaper to copy another’s idea than come up with your own, but such practices are unfair to those parties that have invested in their development in the first place.

It is never sensible to neglect your IP assets when market demand begins to increase and commercial opportunities to grow sales should be protected where possible. Studies have shown that investment in your brand and reputation in cooler times can significantly increase your market share when your competitors continue to make cut backs. Bearing in mind that nowadays a substantial amount of business goodwill is made up of IP assets, would you want to lose out?

Martin Noble is legal director and intellectual property expert at Shakespeares.

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