How to protect an innovative new service.

Jane Lambert

This is a question that I am often asked in IP clinics. The client describes his brainwave for a service that has some innovative features and asks: "Can I get a patent for that?" The answer is almost invariably "no" because patents are granted for inventions and most countries' patent laws including our own make clear that inventions are either products or processes. You can, of course, get a patent for an invention that is used to deliver a service but even then you have to be careful because art 52 (2) of the European Patent Convention excludes from the definition of "invention":

"(a) discoveries, scientific theories and mathematical methods;
(b) aesthetic creations;
(c) schemes, rules and methods for performing mental acts, playing games or doing business, and programs for computers
(d) presentations of information."

as such. The answer I usually give to the question is to rely on a cocktail of intellectual property rights for different aspects of the service.

Confidence

While making plans for your business it is best to keep your ideas to yourself. If you have to take someone into you confidence get him or her to sign a non-disclosure agreement first unless he or she is already bound by an obligation of confidence. It is sometimes possible to keep some technical and commercial information secret after the business is launched. The obligation of confidence is not an intellectual property right. It simply prevents a person to whom commercially sensitive information is disclosed in confidence ("the confidante") from passing that information on to others or using it for his or her own benefit. So long as the information can be kept secret the obligation can last indefinitely. Business and marketing plans, customer account and contact details, manuals and recipes are examples of information that can be protected in this way. It is important to note that the courts will enforce an obligation of confidence only if, and for so long as, the information remains secret. Thus, paper documents have to be kept under lock and key, computer records held in password protected files and staff have to be trained and motivated to keep their employer's confidential information secret.

Trade Marks
Since the reputation of the service provider is likely to be an important consideration for potential customers the service provider should register the sign under which his or her products are supplied as trade marks. Usually these will be the name and logo of the business but it may also be the sign under which a particular service is supplied. The sign must of course be distinctive and it should be registered for the goods or services that the service provider intends to supply over the next 5 years. It can be registered for the UK alone or for the European Union which includes the UK. When registering a trade mark it is important to remember to use the mark for it can be revoked for non-use, to look out for and challenge applications to register similar marks which can be done by registering with a watch service and to make provision for funding such challenges or enforcing the trade mark by taking out before-the-event insurance wherever possible. The small claims track of the Intellectual Property Enterprise Court ("IPEC") provides a low cost forum for infringement disputes while oppositions and applications for revocations and declarations of invalidity of British marks can be heard in the Intellectual Property Office.

Copyright
Manuals, diagrams, computer programs, videos, advertising, promotional and point of sale literature and other materials used in the delivery of a service are usually works in which copyright can subsist. Copyright prevents copying, publication, renting, lending, performance, communication and adaptation of such works but it does not prevent the use of the ideas expressed in those materials. Thus, it is unlawful to copy a business form but it is permissible to create a form that serves the same purpose in a competing business so long as the competitor does not copy or refer to the original form.  As he or she may well be challenged it is important for the competitor to keep an audit trail to prove that his or her form was created independently. There is no system of copyright registration in the UK though there is in the USA and some other countries. All that is required is that a qualified person (a British citizen or resident or citizen or resident of a country with which the UK has a reciprocal agreement which includes most countries) creates an original artistic, dramatic, literary or musical work, a film, sound recording or broadcast or a typographical arrangement of a published work. The work need not be new. It must simply be the product of the author's independent skill and labour. Again, provision must be made for funding infringement actions by insurance or otherwise. The small claims track of IPEC provides a forum for resolving copyright disputes.

Designs
Functional designs can be protected in the UK by an intellectual property right that is almost unique to this country known as "design right."  Ornamental designs can be protected by registration as registered designs under the Registered Designs Act 1949 or as registered Community designs under the Community design regulation. Designs that could be registered either as registered or registered Community designs can b protected from copying as unregistered Community designs,  Those intellectual property rights can cover much of the equipment used in the delivery of a service such as cutlery and crockery in catering, a hair dryer or sun bed in the beauty industry or the uniforms or overalls worn by employees in any industry. Design rights cannot be registered.  All that is required is the recording of the design either in a drawing or other document or the making of a prototype by a British national or resident, the national or resident of another EU member state or national or resident of another state with a reciprocal agreement with the UK. Also, the design must be original in the sense that it involves independent skill and labour and is not a copy of an antecedent work. Registered and registered Community designs must be new and have individual character. They may be registered for 5 renewable terms of 5 years each. The small claims track of IPEC can hear design right claims but not registered design or registered Community design cases.

Database Rights
Customer records, parts lists and other collections of data can be protected by database right. This is a right that prevents the unauthorized extraction and re-utilization of data held in databases and is quite separate from the design of a database that is protected by copyright.

Mixing the Cocktail
The first step is to analyse how the service is delivered and the assets that are used in such delivery. That is best done by an intellectual property audit that can be carried out by a specialist lawyer or patent or trade mark attorney. The next step is to consider the intellectual property rights that can be used to protect those assets. Sometimes there are choices to be made. For example, does the business owner apply for a patent which means that he or she must disclose his or her invention to the world or does he or she hope that he or she can keep it secret and rely on the law of confidence to prevent unauthorized use or disclosure? Those choices sometimes involve establishing priorities which usually depend in turn on the business owner's budget and other constraints. All this is part of an emerging discipline called intellectual property strategy which combines business and legal advice. It is a discipline in which I have a considerable personal as well as professional interest and I have contributed a number of articles to its small but growing literature.

Further Information
Should anybody want to discuss this article or any of he topics mentioned or referred to call me on 020 7404 5252 during normal business hours. You can also contact me through my contact form or message me through Facebook, G+, Linkedin, twitter or Xing.

The Intellectual Property Act 2014 - What it could mean to you

Cambridge from the Backs

Jane Lambert

The East of England with many of our greatest universities and some of our most innovative companies has a vital interest in the laws that protect new technologies and design. The Intellectual Property Act 2014 will make important changes to our laws on patents and registered and unregistered designs. I have written quite a few articles, given a presentation and analysed the effect on patents, registered designs and unregistered design right for specialist IP solicitors and patent and trade mark attorneys which you can find in the bibliography to "Reflections on the Intellectual Property Act 2014" 7 June 2014 IP Tech. This article is aimed at business owners - particularly the new and growing businesses in biotechnology, computing, e-commerce, medical devices - as to what the Act will mean for them.

The Unitary Patent
One of the biggest concerns for high technology businesses in this region has been the cost of patent prosecution and enforcement in the EU. One obvious answer to that concern would be an EU patent and the governments of the member states of the EEC actually reached agreement for a Community patent some 40 years ago. Unfortunately not enough member states ratified that agreement (known as the Community Patent Convention) to bring it into force because of disagreements over language and dispute resolution and the Convention never came into force. There was an attempt to revive the Convention in 1989 and the Commission later proposed a Community patent regulation but all those attempts foundered on the same issues that had scuppered the Convention.

On 17 Dec 2012 most of the member states of the EU agreed a regulation that would enable the European Patent Office to grant a European patent designating the territories of most of the EU member states including the UK as though they were a single country. Such a patent will be known as a "unitary patent" and it will reduce greatly the costs of obtaining Pan-European patent protection.

Shorty afterwards most of the same member states plus Italy agreed to establish a single patent court ("Unified Patent Court" or "UPC") for their territories consisting of a Court of First Instance which will be based in Paris, London and Munich and a Court of Appeal in Luxembourg. The UPC will have jurisdiction to determine infringement and validity disputes relating to all European patents throughout the territories of all the contracting parties. It will thus simplify and greatly reduce the cost of patent litigation for businesses in the UK. In 2003 a high level advisory committee on intellectual property found that the average cost of patent litigation in the UK was over £1 million in the Patents Court and between £150,000 and £250,000 in the Patents County Court compared to €50,000 in Germany and France and €10,000 to 40,000 in the Netherlands. As the UPC will have jurisdiction throughout most of Europe businesses from the East of England and the rest of UK will bear the same prosecution and enforcement costs as their continental competitors.

S.17 of the Intellectual Property Act 2014 enables the Secretary of State to make regulations to implement the UPC agreement and thus the unitary patent into English law and a draft statutory instrument has already been offered for consultation. I have discussed that consultation in "Unified Patent Court Consultation" 25 June 2014 NIPC Law.

Other Changes to Patent Law
The Act allows the Intellectual Property Office ("IPO") to share information about unpublished patent applications with foreign patent offices which should remove at least one of the causes of (or excuses fro) delay in multiple patent applications. It exempts information about ongoing research and development that is partially funded by public money or in which the government has an interest from freedom of information requests. It also allows the Secretary of State to make regulations extending the range of issues that can be referred to the IPO for an examiner's opinion.  These and other changes to patent law are analysed in my article "How the Intellectual Property Act 2014 changes British Patent Law" 21 June 2014.

The Hague Agreement
In relation to industrial designs probably the biggest benefit of the Act for British business will be s.8 which will enable the Secretary of State to make regulations to enable the UK to accede to the Hague Agreement. The Hague Agreement is a treaty that allows designers or their employers to apply simultaneously for registration of their designs in more than one country in the way that the Patent Co-operation Treaty does for patents and the Madrid Protocol does for trade marks. Not a lot of countries have joined Hague so far but the EU is now a party and other countries including the USA are considering accession.

Other Changes to Design Law
It will soon be possible to obtain the opinion of a IPO examiner on the validity of a registered design and whether it has been infringed just as it is for patents. Appeals from IPO hearing officers will no longer lie to the Registered Designs Appeal Tribunal but to an appointed person or the court as already happens in trade mark appeals. There will soon be a right of prior user to enable those who began to make products to a design before the registration of that design to continue to do so. This is a right that already exists in relation to registered Community designs and there is a corresponding right in relation to patents and trade marks.

Criminal Sanctions for Deliberately Copying a Registered Design
The most controversial provision of the Act is s.13 which creates a new offence of deliberately copying a registered or registered Community design in the course of a business. This was opposed by many intellectual property lawyers including me and also by much of British manufacturing industry who feared it was the thin end of a wedge that would lead eventually to criminal liability for patent infringement. Others in the design lobby tried to introduce a clause criminalizing unregistered design infringement.  In the end the government's original proposals with a few minor changes were passed.  This provision may or may not deter counterfeiting because the government does not expect more than 4 prosecutions a year but it is almost certain to lead to a lot more challenges to registered and registered Community designs and threats actions.

Unregistered Designs
The main change is that title to an unregistered design right will no longer vest automatically in the person who commissions a registered design. Design consultancies and their customers should therefore review their contracts and standard terms of business. The definition of design has been amended and it should soon be easier for non-European companies to obtain protection for their original designs so long as they do at least some business somewhere in the EU.

Further Information
Detailed analyses of the main changes to registered design and unregistered design rights law are contained in "How the Intellectual Property Act 2014 changes British Registered Design Law" 19 June 2014 and "How the Intellectual Property Act 2014 will change British Unregistered Design Right Law" 11 June 2014 respectively.  If anyone wants to discuss this article or any of the issues arising out of it he or she should call me on 020 7404 5252 or fill in my contact form.  Members of the public can also tweet me, write on my wall, or contact me through G+, Linkedin or Xing.