Keep it legal

By at home

Knowing how to solve a business dispute and who to approach for help with trademarks, patents and copyright is vital when you’re running your own company.

Whether you’re running a business or contemplating dipping a toe into entrepreneurial waters, it is very tempting to consign any thoughts of business compliance to the filing cabinet drawer marked ‘bureaucratic nightmare’ and get on with the creative and rewarding steps of building a business. But if you don’t get it right, you could be jeopardising the business that you’ve nurtured and grown to love, so a bit of time spent contemplating the regulations governing your business will pay off handsomely in the future.

There are laws and regulations governing every aspect of your business – everything from company law, health and safety, employment laws and fair contracts to advertising, data protection, discrimination and money laundering. Thinking about these issues when you’re first setting up in business will help your organisation to run smoothly and efficiently. If in doubt, it’s always best to seek professional help and your local Business Link is always a good first place to start if you’re unsure about something.

One area of compliance that can result in costly disputes capable of crippling a business, and which many people fall foul of, is intellectual property. The last thing that many people think of when they’ve hit on a money-spinning new idea, is how to go about protecting it. It’s all too easy to be swept away with focusing on ways to make your grand idea come to fruition. However, protection should be a key part of your business plan.

Even if your new business isn’t built on a new invention, you need to protect the brand that you’ve spent time creating and building up. If you don’t act, someone else could all too easily get there first – a massive 28,223 patent applications were made to the UK Patent Office in 2004 alone, along with 61,931 trademark applications. And if it all goes wrong, a dispute that ends up in the courts can damage your business as well as your pocket – even if you win.

The UK Patent Office has just launched a new opinions service to minimise that threat – for just £200, both parties in dispute can access an expert opinion on an issue of patent infringement or validity. ‘We always suggest that people avoid going to court at all costs,’ advises Miles Rees, of the UK Patent Office. ‘The new opinions service is a way of trying to reduce costs and make resolving a dispute more accessible. There’s little point in having an intellectual property right if you can’t enforce it in a cost-effective way.’

Given that prevention is so much better than cure, getting your head around the seemingly tricky world of trademarks, patents and copyright is essential.

Patents

If you fancy yourself as something of an inventor, then make sure you avail yourself of a patent.

Without one, it’s open for any other inventor to pip you to the post, or you put yourself at risk of another company ripping off your idea. For something to be patented, it needs to be totally new and it must have a practical application.

The way it works is that the state grants an individual the right to prevent anyone else making, using, selling or importing his or her invention for up to 20 years. Details of the patent application are made public 18 months after it is filed. And, if you licence it to other companies, you can earn an income from your invention as royalties are paid on licensed products.

Beware, though – a UK patent is just that, you must apply for patents in all countries in which you require protection.

Trademarks

These are symbols or signs used by a trader to distinguish their product or service.

Almost anything goes – trademarks can be words, logos, colours, shapes, sounds, jingles or even actions (think of the ASDA pat on the bottom). Many celebrities register their name as a trademark, to control the way their reputation is used to endorse products.

Registered trademarks (which have the exclusive rights to the use of their mark, in territories where it is registered) are identified with the symbol ®, unregistered marks are followed by the letters TM. Registered marks can be enforced by legal proceedings. Unregistered marks, such as business names, are generally protected by the common law principle of ‘passing off’. Marks can first be registered for 10 years, and then renewed for a fee at 10-yearly intervals.

Copyright

This is a property right that protects original literary, dramatic, musical and artistic works, films, broadcasts and sound recordings.

There is no formal registry in the UK – protection exists automatically if the work has been ‘fixed’ in some way – that is, if it physically exists, such as in the form of a manuscript or computer programme.

Copyright in a literary, dramatic, musical or artistic work lasts for 70 years after the death of the author. Sound recordings and broadcasts are protected for 50 years and published editions for 25 years.

As a form of intellectual property, copyright can be bought, sold or otherwise transferred. And remember – copyright law applies on the Internet, just as it does to paper, so you need consent of the copyright holder to post material on a website.

Contacts

y An excellent one-stop shop for resources that will enable you to explore your ideas, protectthem and build your business plan is the British Library’s Business & Intellectual PropertyCentre – find out more at www.bl.uk/bipc.

y The Patent Office has a wealth of resources on patents, trademarks and copyright – log on to www.patent.gov.uk or call 08459 500505. It has also just launched a new opinions service to help businesses or individuals who are involved in a dispute over patents.

y Institute of Patentees & Inventors – www.invent.org.uk

y The Eureka Club operates a ‘shop window’ for new ideas and inventions – www.eureka-club.org

y The World Intellectual Property Organisation can be found at www.wipo.org

“Legal actions are such a waste of energy”

Mandy Haberman’s first invention came when her youngest child Emily developed a feeding problem which meant she couldn’t be breastfed or bottle-fed.

Improvisation led to the Haberman Feeder, which Mandy, 47, managed to get manufactured and out into the market as a one-woman operation. Next up came the unique leakproof Anywayup cup. But when one of the industry’s giants, Jackel International, launched a copycat under its well-known brand Tommee Tipee, Mandy ended up in the law courts defending her infringed patents and intellectual property.

The David and Goliath landmark battle ended in 2000 when Jackel abandoned its court appeal and settled out-of-court paying all costs and substantial damages to Haberman Associates.

‘I first had the idea for the Anywayup* cup in 1990. I was at a friend’s house and there was another mother there with a toddler, who had a cup full of blackcurrant juice. The house was immaculate, cream coloured carpet, light peach upholstery – the worst place for a young child! This toddler was walking across the carpet leaving a trail of blackcurrant stains. It made me think, “What is needed is a cup which seals automatically when it comes out of the child’s mouth.”

I’ve got three children; I had been through the stage of sticky floors and all the mess, I knew it would sell. The Anywayup* cup took me five years to develop. I’d done my research on intellectual property. I took out patents, not worldwide but in strategic countries, and I registered the trademark and design rights. I also took out insurance to cover legal costs in case of infringement. I knew that this was a highly commercial product so I took it around to all of the big baby products companies offering a licence.

Their responses were very interesting; everybody was really enthusiastic: ‘Great idea, best thing for ages’. But, at the end of the day nobody actually wanted to invest in a licence! Of course there were those companies who said: “Oh, great idea! Let’s have some prototypes, send us some samples!”, which I duly did – more fool me. It went very quiet and they didn’t return my phone calls, or the prototypes!

If you take a large chunk of market share away from the companies who, up until that time had been very comfortable holding the lion’s share of the market, they don’t like it very much. It upsets the status quo and then things get nasty.

One company, who had seen my early prototypes and who knew that I had a patent and had signed my confidential agreement, came into the market with a product that was remarkably like my first prototype. I had no alternative but to go to the High Court to enforce my patent because, by this time, my licensees in the UK had invested huge amounts in setting up their own factory to produce the cup and were employing 70 people for the project. Theirs was a well-known brand name, we were relatively new in the market. When they launched their product, we lost two-thirds of our business overnight.

Eventually I won, but legal actions are such a waste of creative energy. You are fully taken up with the anxieties of litigation. You put everything on the line, and if you lose, you lose the lot. The current “copycat culture” does nothing to advance trade and industry. Faster, cheaper litigation and an improved patent system would help. When you’re a young company you’re not that interested in the damages, you just want to stop the infringement quickly! We need, somehow, to prevent the David and Goliath scenario whereby big companies ride roughshod over the rights of independent inventors and small businesses because they know that the risk of ending up in court is negligible.’

‘I took out patents not worldwide but in strategic countries and I registered the trademark and design rights’

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