How Small Business can Fund IP Advice and Representation

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Jane Lambert


In her speech on National and International-level concerns and developments regarding the IP landscape which she delivered on 29 June 2016 to the British group of European Practitioners in Intellectual Property, Lady Neville-Rolfe, the Minister for Intellectual Property said:

"The UK has one of the world’s best intellectual property environments. The changes that will be triggered by the outcome of last Thursday’s vote will not alter that. You can continue to expect outstanding, professionally delivered rights granting services including design rights; and copyright owners can expect that the framework will support creativity. The UK will continue to be envied around the world for the quality of its enforcement environment. We will continue to lead in international IP discussions. We will continue our work to build an environment that allows innovative and creative businesses across the UK to develop their ideas and exploit them effectively."

It is certainly the case that our intellectual property laws protect investment in branding, creativity, design and technology as comprehensively and robustly as those of any other country and I share the minister's high regard for our Intellectual Property Office and the patent and trade mark attorneys who represent those who deal with it but I cannot agree that the UK is "envied around the world for the quality of its enforcement environment". If, as is likely, Her Majesty's government has to withdraw from the Agreement on a Unified Patent Court of 19 Feb 2013 ("the UPC Agreement") the result of the referendum will make a significant and unwelcome change to the quality of our intellectual property environment.

It is undeniable that the quality of justice dispensed by our Patents and Enterprise judges is very high indeed but despite Mr Justice Arnold's reforms to what is now the Intellectual Property Enterprise Court ("IPEC") in 2010 and the launch of the small claims track intellectual property litigation in England and Wales remains extremely expensive. Because there is no equivalent to IPEC in those jurisdictions, the position in Scotland and Northern Ireland is, if anything, probably worse. It is my experience (which I do not believe to be atypical) that far more IP cases fail through lack of funding than through lack of merit and that injustice triumphs because many small and medium enterprises with a good case cannot afford to take it to court. Of those can afford to litigate, many are deterred by the risk of an order to pay the other side's costs if the claim fails or they have to discontinue the action for any reasons. Even those that are not deterred may be stopped in their tracks by an order to give security for the other side's costs under CPR 25.13.

The Unified Patent Court, which was expected to open its doors early in 2017, would have benefited SME in the UK considerably in that costs would have been considerably lower than in the High Court, its jurisdiction would have covered France, Germany and other EU member states as well as the whole UK and legal aid would have been available. Unfortunately, art 84 (1) of the UPC Agreement makes clear that it is open only to EU member states. Although we have passed primary legislation to enable us to ratify the Agreement it is hard to see how the secondary legislation implementing that legislation that was drafted 3 years ago can now be made by a government chuntering the mantra that "Brexit means Brexit".

So what can be done now?  It is now more important than ever that businesses and those going into business get high quality advice and services but these costs money. One solution is to borrow the cost of the legal service from a bank or other financial institution and spread the repayments over time.  One specialist service for the legal sector that entered a service partnership with the Bar Council last year which I discussed in Legal Cost Finance - Another Response to Sky Rocketing Court Fees on 10 March 2016 is Legal Cost Finance. As I said in my article

"One advantage of this source of funding for clients is that it is not limited to litigation but is available for any type of legal service including non-contentious work."

That would include advice on such issues as IP strategy, patentability and licensing as well as the negotiation and drafting of agreements from any IP specialist as well as applications by patent or trade mark agents for patents, trade marks and design registrations in this country and around the world.

The Romans had a saying "si vis pacem para bellum".  Its counterpart for intellectual property is "If you don't want competitors to rip off your ideas, designs or brands, protect them well and make sure you have the means to enforce that protection."  Select the optimal legal protection for your assets using the methodology that I proposed in Patent or No Patent 28 Aug 2016. Possibly the most important paragraph of that strategy is the last:

"Unless you expect your earnings to grow substantially, take out intellectual property insurance or make other arrangements to fund enforcement litigation."

You will find advice on such insurance through the Chartered Institute of Patent Attorneys' report IP Insurance and other IP litigation funding arrangements which I discussed in IP Insurance: CIPA's Paper 1 May 2016 NIPC Inventors Club.

If you want to talk about this article or any other aspect of IP give me a call on 020 7404 5252 during office hours or send me a message through my contact form.