The aim of this article is to provide an introduction to what is often regarded as an enigmatic area of legal, commercial and inventive processes. We hope that after reading this you will have sufficient background to understand the importance of Intellectual Property. We believe this area is important for inventive or novel product businesses as are the issues which are central to it and arise from it. The term ‘central’ is used without caution: in advanced technology businesses the Intellectual Property Rights (IPR) - that is the methods of obtaining and securing protection against pirating or usurping of an inventive idea, concept or invention, will in all probability come to be of far greater significance than the more tangible, physical, aspects of the business or technology.
Intellectual property (IP) also has the potential to be a stumbling block; that is, its ‘absence’ can block investment, take away the commercial edge of an invention and (in instances) make a vast technical effort futile, whilst litigation over IP can be very expensive, protracted and damaging.
Originally the Crown issued Letters Patent as a method whereby an applicant could acquire a manufacturing or controlling monopoly against commercial piracy (that is, anyone stealing usurping or violating ones rights as the originator of a commercial or technical invention). This was safeguarded by the Crown’s authority (in exchange for a substantial sum of money - the large fee involved being a constant and valuable source of finance for the Royal exchequer). In its earlier form the system was iniquitous and corrupt. Many legitimate businesses and tradesmen were destroyed when grant of letters patent was cynically and corruptly conferred on another for a process or a product they had originated. They were powerless to stop their livelihood being hijacked because the monopoly was ‘bought’ by a powerful individual. Typically, the individual would commandeer the invention and claim originality, knowing that the code of ‘trade secrets’ practised by artisans was often their undoing!
A prime example is Patent No 162 (concerned with steel making) granted to Prince Rupert of the Rhine in 1670 (Rupert was the dashing Royalist cavalry commander in the English Civil War). Rupert’s patent was actually to protect disclosure of an earlier Patent No 161. In this second Patent, he was not protecting ‘his’ steel making process per se, rather he was getting a royal warrant to stop his workers divulging the fact that his first patent covered something which was already known!!
Nowadays a patent is a monopoly (an exclusive right or holding) conferred by the state on, and for, the benefit of the originator (and not a usurper) of an invention. It provides protection in law by statute. However, the state does not have a duty of protection - recognition of, and the remedy for, the pirating or usurping of a patented invention (called infringement). This is the responsibility of the patentee and resides in the legal test of what actually is infringement of an invention. In short, the patentee must police his own monopoly and use his rights in law to obtain redress.
As pointed out in a previous resume: The (patent) system has been very substantially reformed over the centuries and the modern law of patents, governed by the Patents Act 1977, is based on somewhat more altruistic principles. These are, broadly speaking, that if you invent something new, and disclose it to the public through publication at the Patent Office then, in return for sharing the knowledge of your invention, you receive the exclusive right to perform that invention for a period of 20 years.*
Implicit in the idea of disclosure of your invention at the patent office is the avoidance of industrial secrecy (which at one time had workers ‘oath bound’) and the assumption that you have not made your invention public knowledge (placed it in the ‘public domain’) prior to an application for grant of patent. An applicant cannot be entitled to a grant of patent if it can be shown that the idea is now in the public domain. In short, if you hope to get a patent the idea must remain free from common knowledge, or disclosed only under the immunity of a confidentiality agreement. (See below) It is still a risk though.
Confidentiality or ‘non-disclosure’ prior to application is designed to avoid the adversarial and contentious process of identifying who actually is the originator of an idea, concept or invention. Part of this is to do with the fact that other than in the case of ‘free energy machines’ (perpetual motion) there is no requirement on the part of the applicant to actually demonstrate his idea to the satisfaction of the patent examiner. Only in the US (and this may change) is it possible to disclose prior to application, and only then if disclosure is to a learned body.
To expand, a patent examiner would be wary of an individual claiming to be the originator of an idea if on examination it was found to be common knowledge. Circumstances arise where anybody can claim authorship to an idea if it has previously moved in to the public domain, and without proof of origination, priority or ‘force majeure’ (circumstances beyond the applicant’s control) a claimant will not be entitled to a patent. Patents may be granted only to be made void because evidence of disclosure/piracy or untruthfulness - or a complaint of ‘non-utility’ has arisen prior to, or after grant of patent (under various appeals procedures of the Patent Act and its amendments)).
THE VALUE OF PATENTS
The most attractive aspect of patents are that they provide the only true monopoly of any type of IP right. A valid patent precludes all other imitators or copyists. It is immaterial whether the copy is straightforward plagiarism or the result of years of independent toil and effort. This follows regardless of how many were involved in trying to achieve the same result.
Assuming no prior art (that is, the existence of a patent describing the same concept) the principle is first past the winning post (meaning the first to file a specification) gets the monopoly. Historically there are many names that never found their way into the history books because they were pipped at the post in filing a patent e.g. Alexandra Graham Bell and the telephone (and not Johann Reis or Elisha Grey), Perkin and synthetic dyes (and not Caro) Edison and the light Bulb (and not Joseph Swan, Sawyers & Mann or Hiram Maxim).
A patent can only be granted if the following conditions are satisfied:
(a) the invention is novel.
(b) it involves a true inventive step (i.e. not obvious)
(c) must be contrived by the ‘Hand of Man’.
(d) cannot be a ‘Handiwork of Nature’ (though this is now a disputed area in the biotech industries).
(e) it is capable of utility (application)
(f) it is not a discovery, scientific theory or mathematical method,
(broadly) something susceptible of protection as a copyright work
something where publication/exploitation would be contrary to the public good
( in the above respect) has no implications as to National Security
HOW DO YOU DO IT!
A UK patent can be obtained by applying to the UK Intellectual Property Office based in Newport, Gwent, or to the European Patent Office. The process is of itself relatively simple - compose a technical specification, add drawings and claims of novelty (where appropriate, or leave out the claims for now), fill in possibly two forms and mail to Newport. The filing costs are free and after perhaps ten days you will receive your application number and, importantly, your priority date. This latter signifies the date that your invention is perceived to be ‘prior’ to anyone else’s and means that anything imitating your idea filed after your priority date will be deemed inadmissible when the application is examined. In short, if you get in first you get the patent!
Is it really this simple? Well, no actually! Professionals in the field (that is Patent agents) don’t make money because it is easy. The drawing up of the specification, the form the description and claims take (or might take), the problems that arise in deciding to search the literature and other patents first for ‘prior art’, the processes of going beyond a simple national application (that is international or European/Patent Convention Treaty applications) requiring translations, different protocols etc., asking for a preliminary examination to establish examiners objections, and so on, are all good reasons why the use of professional Patent agents is recommended to ensure that the chances of getting a broad and effective patent are optimised.
Indeed, the processing of a patent application can seem an interminable process, made the more tedious and arduous by the fact that others can challenge your application by presenting evidence to the Intellectual Property Office, or the required search for ‘prior art’ might invalidate what you thought was entirely novel. This is why it is best to go as far as you can to ascertain what has been patented earlier before filing an application. At worst it can take many years (possibly seven in Japan) to arrive at a grant of patent. Nevertheless, judging by the number of patents filed each year (in the UK circa 15,000 in both years 2012 & 2013) the value of a patent is deemed to be substantial.
HAVE I THE RIGHT TO TAKE OUT A PATENT?
Broadly speaking, section 39 of the Patents Act 1977 provides that inventions made by employees will belong to their employer where they were made in the normal course of their duties, or in other duties specifically assigned to the employee which might reasonably lead to an invention. Otherwise, and disregarding some contentious issues the invention will belong to the employee. There are provisions within the Patents Act to compensate employees whose ideas have been of outstanding benefit to an employer, and provisions which protect the employee’s patent rights from any terms in a contract of employment which purport to diminish them. As noted, the idea of invention deemed outside the employers entitlement is a contentious area.
HOW EFFECTIVE IS A PATENT?
Patent rights are territorial and need to be registered in every jurisdiction in which they are to be enforced. A UK registration is useless to stop production in France but can be used to stop importation of infringing goods. The inventor wanting Pan-national protection needs to consider the methods available for filing automatically in those nations of the world who are co-signatories of the Patent Convention Treaty. An unexpected benefit of patents in particular, but of use in all intellectual property rights, is the use of expert opinion. This can decide the issue sub-judice.
Whether or not the subject matter of a patent is/was inventive or not - that is ‘obvious’ at the time the patent application was filed - or has been ‘taught’ by others - is determined by reference to “the man skilled in the art”. The corollary to this is that there is a case for consulting the ‘skilled man’ before application (the domain often of the professional acting for the inventor!).
IT AIN’T WHAT YOU DO - IT’S THE WAY THAT YOU DO IT!
It would be easy to believe that getting a patent is an end in itself - but it is in fact only a step in the commercialisation and product development process. The following points are absolutely key in understanding what the Patent process means to an inventor:
Patents are not of themselves strictly a route to a commercial income, but are certainly a necessary and integral part of preventing unwanted poaching of the outcomes of inventive development programmes.
Patents then give a credible negotiating position and fend off commercial piracy.
They are absolutely necessary to provide the freedom and time to start up businesses without the fear of unwanted competition - or competitors catching up, overtaking or bleeding the market first.
Patents make it possible to deal with those potential licensees who will not negotiate as a matter of policy unless there is a commercially defensible position.
Patents can provide the commercial ‘currency’ when negotiating technology transfer of innovative technologies. The money to pay for patents and/or design rights tends to be regarded as an additional outlay to the product development budget - never as a loss.
The critical test for patenting is ‘what do we risk, and what might happen if we don’t patent the idea’. In short, the process tends to be defensive rather than wholly exploitive and depends much on what it cost to develop the invention. The strategy of abandoning an application, if in the initial (‘provisional’) period, proof surfaces that either a technical or commercial misjudgment has been made, is always an option.
The commercial justification (i.e. the income potential for the invention) is of course an important factor, but sensible investors carry out due diligence in terms of the commercial and technical potential and are pragmatic about the ‘strike rate’ for inventions.
THE OTHER SIDE
A patent is ‘only as strong as the litigation that tests it’ but since it is prohibitively expensive to litigate (on average UK £250,000, US $1,000,000). Most businesses would be extremely reluctant to engage in a legal battle unless they were defending something already very lucrative.
A patent is a first line of defence but is neither a guarantee of income nor a guarantee against infringement. But what is true is that a failure to get one at the right time means that neither option is available - whether one likes it or not.
To get an idea of the way all IP rights operate, consider if you will a post-graduate researcher who is setting out to investigate the properties of a substance. In order to accomplish this he invents a new method of cooling the substance, the apparatus he develops is novel and inventive and so can be the subject of an application for a patent. In order to protect the nature of his invention before his patent can be filed he sets up a confidentiality or non-disclosure agreement with all those who assisted in his work*.
He now designs a device which will employ his invention, the design will immediately attract unregistered design rights. he can, of course, register the design if appropriate. Having completed his initial design he may require some very specialised computing work done. Should this need a new computer chip, specific to the computational task in hand, it will qualify for semiconductor topography rights (treated simply in a similar way to copyright). If original software is written it too will attract protection through the rules on copyright. If now, subsequent computational results are incorporated into a database, the database itself acquires rights (as with copyright).
His thesis, when written, will attract copyright protection, as will any learned papers etc. It must be stressed that the reseacher should file his patent prior to releasing his thesis or dissertation, and thus disclosure of his invention, and including any verbal disclosure during his viva voce. Those he works with may well be bound to keep his results secret until he chooses to publish them, the results are in fact confidential information.
If he wants to talk to a potential investor in his invention prior to his acquiring a priority date for the filing of his patent, he will use another confidentiality agreement.
Likewise, on the assumption that the researcher’s invention proves to have commercial potential and sells under a trade name (say “Gosh”), it may, if very successful, attract unscrupulous copyists. However, the name and reputation can be protected by registering “Gosh” as a registered trade mark and by the law of passing off.
As to who owns the rights above, and who might be entitled to the profits from exploitation, and who is responsible for registration of registrable rights, are all pertinent questions but beyond the scope of this article, as are other questions not uniquely confined to inventions and patents! As a further example, if the inventive researcher above had begun some research whilst on secondment or placement with a company which - for a period - employed the researcher, this could mean that the title to IP rights arising from the employment period of the research would be owned by the company - excepting where there was a definite agreement which stated otherwise.
Another exception would be where our researcher needed to incorporate a device already protected by a patent into his ‘novel’ cooling system. Here third party rights subsist and the student would need permission from the owners of the other patent to proceed with his own product exploitation and patent, particularly if the third party device in question was crucial his own invention.
Indeed, were he to remain mute about this aspect, and he did obtain grant of patent, it would hardly be likely to withstand a court challenge from the third party. He would be wise to agree a license from the third party (agreeing to pay them some of his profits for employing their device) or agree a cross licensing agreement which allows the mutual use by both parties of the others IPR.
* Though experience suggests this can be a thorny problem with some academic supervisors.
OUTLINE OF IP RIGHTS
Intellectual property rights fall into two distinct classes,
those which must be registered to take effect, and
those which arise as a matter of course.
The listing below shows the main types of intellectual property rights other than Patents which are summarised above. It should be noted that this list summarises the UK position: though other countries have, generally speaking, similar laws granting similar rights.
‘Registered rights’ agencies usually stipulate separate applications for each country, whereas protection for unregistered rights often arise automatically by virtue of national laws and/or international agreements or conventions. What follows here is necessarily condensed and in general, illustrative; the precise situation in any given circumstance will involve the interpretation of complex regulations.
See above - protect ideas concepts and practices in the nature of invention.
Termed a “quasi intellectual property right”, confidentiality or non-disclosure agreements protect confidential information from indiscreet or deliberate disclosure, and binds those who are a party to the agreement to behaviour which prevents them pirating the information they are privy to. These agreements are oftimes ‘mutually protective’ in that they are binding on both parties where there is an exchange of sensitive information. In short, there are many instances where an inventor disclosing technical secrets may learn from a prospective investor information which is commercially sensitive. Or where there is a likely industrial partner working in the same area as the inventor, both parties may disclose technically sensitive information. This protects all concerned, first by defining the limits of disclosure on individuals, that is, maintaining the requirements of disclosure under the Patents Act 1977 and later amendments, and creating trust between the inventor and third parties. This is important because Confidentiality is an associated IP right which arises out of contractual agreements, either made expressly in writing (or verbally, if witnessed) or implicitly by behaviour or conduct. Breach of confidentiality can only be actioned to protect “trade secrets” and only then when the information was given to a recipient under an obligation of non-disclosure which subsequently can then be shown to have been (unequivocally) breached or dishonoured. Since any action for breach of confidence arises out of a contract, it is not possible to litigate against a third party who has received information in breach of confidence - unless of course they can be shown to have initiated the breach of confidence in the first place.
A duty of confidentiality arises in many contracts as a matter of course, but it is better if the obligation is expressly stated or is the subject of a separate agreement.
Generally the three exceptions to an obligation will be:-
if the information comes into the public domain subsequently by a third party having the lawful right to do so
if the information is subsequently lawfully obtained from a third party without obligation to the originator
where the information can be proved to have already been known to the recipient, or its employees, independently prior to disclosure (though they should know this).
Registered design rights
These protect the shape and configuration of objects which have an aesthetic factor i.e. appeal to, or are judged by, the human eye.
Registered trade mark rights
Protect a trader’s investment of time and effort in developing a trade mark.
Other specialised intellectual property rights
(such as Plant Variety/Biotech Rights)
Intended to protect the written word, recordings, broadcasts, software and several analogous forms of expression. Copyright law prohibits and/or discourages the plagiarism of written, illustrative and artistic works. It covers literary, dramatic, musical and design/artistic and broadcasting works, and provides for protection of the fruits of a person’s skill and/or effort.
The concept is derived from an earlier time when the crown kept a check on seditious writings (and swelled the money in the exchequer) by maintaining the prerogative to issue licences to printers - without which they could not trade. Licences had to be renewed periodically at a fee. In 1709, during the reign of Queen Anne, the crown rescinded its prerogative and this became codified in English Law, in a statute which provided a ‘sole right and liberty’ to authors to print their works for a term of 14 years.
The Copyright, Designs and Patents Act 1988 (amended by the regulation implementing EC Software Directive - i.e. “1988 Act”) governs English law. In this it is unlawful as a “breach of copyright” to reproduce or copy any “original literary, dramatic, musical or artistic work” or a substantial part thereof. Copyright protection therefore exists on lecture notes, papers, dissertations, theses and any accompanying diagrams or artwork, as well as computer programs and the computer records of these activities.
Copyright in a creative work arises automatically when the work is originated, there is no statutory requirement for registration.
The nationality or domicile of the originator, or the country where the work was first published or broadcast, may be significant. English law does not protect works from every country. British citizens and British residents do enjoy protection, as are all works first published in the UK (or a broad range of foreign countries). There are few major trading nations which fall outside the list of those qualifying.
The author of a work is ordinarily taken to be the first owner of the copyright. This remains substantially true unless he produces it as part of his employment, in which case first ownership may go to the employer. Exceptions to this include prior agreements to the contrary, or where the work lies substantially outside the interests of the employer or the terms and conditions of employment of the originator.
Copyright subsists for the author’s lifetime with an additional 70 years from the date of death.
It is important to bear in mind that it is the work per se that is protected by copyright, and not the concept. If the concept, idea, premise or any creative suggestion in the work can be used to advantage by someone else without directly copying the work (pattern for pattern, contour for contour, verbatim et literatim) then the owner of the copyright is without a remedy in law.
Copyright, therefore, is not a right of monopoly, and does not provide powers of injunction or a remedy in law to stop ‘me too’ use, which employs the concept, but avoids a direct replication of the original work. At times, there is a difficult distinction to make - fortunately subtle variations are seldom at issue. A copy is a copy and the idea of plagiarism tends to be clear cut.
Copyright does give the owner an exclusive right to do certain things such as copy, adapt and use the work (and grant licences to others to copy adapt and use the work).
As Peeters* points out ‘Doing any of these things without owning the copyright or being licensed by the owner is a breach of copyright. Clearly therefore it is extremely important to be sure that you have a valid licence or assignment before using any copyright material, you may be able to sue whoever purported to sell you the right (if they still exist) but the real owner can prevent you from using the material and that may prove inconvenient, expensive or embarrassing.’
Likewise ‘There are a number of provisions under the 1988 Act which relate to “Fair Use” of copyright works for research and private study, criticism, review and news reporting or for the purposes of instruction or examination. Fair dealing with a copyright work for any of those purposes is not infringement.’
The definition of copying in copyright law also includes the automatic downloading into Random Access Memory of software that takes place when a computer program is run. In short, the unlicensed and authorised running of a legitimately created software package establishes a copyright infringement. A licensed user of a commercially available program is authorised to run the program, and to make a back-up copy, but not to transfer it or resell it.
REGISTERED AND UNREGISTERED DESIGN RIGHTS
Unregistered design rights
Are protective of the shape and configuration of objects generally
Protect’s a trader’s investment of time and effort in developing a name, goodwill and reputation.
Other specialised intellectual property rights include ‘quasi-author’ copyright such as semiconductor topography rights.
Basis in Copyright
The law of copyright is the essential basis for registered and unregistered design rights. The Registered Designs Act 1949 regulates the former and the Copyright, Designs and Patents Act 1988 the latter.
The periods of protection are:
up to 25 years following registration for registered design rights - subject to fees being paid!;
and, up to 15 years from creation for unregistered design right or 10 years from first marketing (to a maximum total of 15 years).
A licence of rightful use is available to anyone who pays the proprietor an agreed royalty.
Designs can be registered for:- “features of shape, configuration, pattern or ornament being applied to an article by any industrial process which, being features which in the finished article appeal to and are judged by the eye.”
A design must be more than merely functional to obtain registration. Thus, a design for a utility power connector is not likely to be registrable as its appearance is (strictly) immaterial, but the design for a connector and/or control panel for a stereo system, should be, as clearly in this second case there is an aesthetic factor involved.
Once registered, design rights are infringed by any article made to the same design or pattern, whether a direct copy or not. However, in practice an infringement complaint would fail unless it could be demonstrated that the copy was feature for feature the same as the original. Only in this instance could it be admitted that the registered design right had truly been infringed.
Unregistered design right, like copyright, can be invoked at the moment a design is created. They apply to:“any aspect of the shape or configuration (whether internal or external) of the whole or part of an article”.
In contrast to the above, an unregistered right may protect the design of an electrical connector - but only the design - and has no bearing on those components which would be considered commonplace or included simply because they are essential for the connector to function with, fit or match other components (the so-called “must fit, must match” exceptions).
Like copyright, unregistered cover only protects against the reproducing of a significant part of the design, not against the independent creation of a similar design.
REGISTERED TRADE MARKS - THE LAW OF PASSING OFF.
Passing off is a common law right, that is to say it has no basis in an Act of Parliament. It originally arose in the 19th century out of the desire of judges to protect the public from deliberate fraud by unscrupulous traders and in this century has developed to prevent (irrespective of intent); any situation where purchasers might be misled as to the origins of goods; because a trader has adopted a similar trading style to a competitor in the same business area and/or is likely to damage the reputation and goodwill of the original company.
The newspaper reports of someone selling ‘Rolexe’ (sic) Watches, Korean versions of the famous Oyster Rolex, serves to illustrate the underlying principle of Passing Off.
The existence of a massive counterfeiting industry worldwide is one of the reasons why the Passing off Laws are so important. Not only is the original manufacture losing valuable trade but poor imitations destroy his reputation. No one would ordinarily fall for a Rolexe as opposed to a Rolex but it happens too often and the counterfeiters make huge sums of money on the hard work of an originator. It matters not that Patents may also be infringed - this is merely incidental to the copyists.
A trade mark is virtually any device which is used to distinguish the goods, services or identity of one trading entity from another.
A Logo, symbol, trade name, or other distinguishing mark can be a trade mark. So too a brand name, in the sense that it represents a trading entity which relies on the brand for its normal course of business.
Hitherto, registrations required separate filings in each country, but from April 1st 1996 it was possible to apply for European trade marks and for worldwide registrations through central offices in Alicante and Geneva.
Since the UK Trade Marks Act 1994, the sole limitation on the representative device used as a trade mark is that it be capable of some form of graphical representation. This has led to a number of curious applications for, amongst others, the shapes of items (the Coke bottle), colours (BP’s house shade of green), sounds (the Direct Line jingle) and even smells (Chanel No. 5) though this last does appear to be out of context.
A registered trade mark is infringed by using an identical sign or graphical representation on goods or services for which the mark is registered, or where there are (deliberate) similarities in the goods and/or services and the chance of confusion on the part of the public. There are further provisions protecting famous marks, even where use applies to totally dissimilar goods or services to those registered. This applies only when the use will unfairly disadvantage or damage the reputation or trading position of the registered original.
There are provisions for the ‘fair use’ of other peoples registered trademarks, typically as found in Burger King adverts which mention “McDonald’s”, a registered trade mark, in order to claim that Burger King burgers are (allegedly) bigger than those sold at McDonald’s.
Trade mark law is fairly complex because whilst brand names can be extremely valuable, the rights last forever so long as the name is used and the registry fees are paid. Likewise, the rights of members of the public to use words freely also have to be safeguarded. However, a trade mark or brand name must not become by common usage or through intent, generic. It was this which led to Thermos, Cellophane, Aspirin, Linoleum, Lanolin, Escalator, Shredded Wheat and many others losing the protection of registered and unregistered rights.
It is more difficult and expensive to bring an action for passing off than registered trade mark infringement because a plaintiff must first prove the existence of a reputation, a tangible loss of business and the extent of damage before there is any chance of prevailing in the action. An action for passing off is intended to protect reputation and goodwill. So long as these are attestably in existence, the right will exist too. In this respect, registration is unnecessary and there is clearly no time limit.
OTHER INTELLECTUAL PROPERTY RIGHTS
Other rights include:-
Plant Breeder’s Rights,
Certification Marks, Semi-Conductor Topography
Software Rights and Database Rights.
Semi-conductor topography rights.
Rights in any semi-conductor product having ‘ an electronic function comprising two or more layers of semi-conductor in which at least one layer of semiconductor is in a fixed functional pattern’ are protected under UK law under unregistered design rights. They should be treated as the same in all respects other than that there is no period of license of right.
Peeters M, Exploitation of IP. Pinsent Curtis. 1995