If there is one term that will become the ‘business buzzword’ for 2018, it’s innovation. Businesses are built on good ideas, and great businesses make sure they keep coming up with new ways to push their company forward, staying ahead of the competition.
“Intellectual property is a minefield filled with potential for (expensive) litigation, product sabotage, and risk,” says Alistair Duncan, head of the Commercial Law Department at Tayside-based solicitors Miller Hendry.
“But as British business starts to rely once again on Research & Development, intellectual property is being taken more seriously, and is now regarded as a tangible asset rather than just a valueless concept or idea.
“What may seem a little strange, though, is that although the UK is without doubt one of the most innovative and inventive places in the world, it actually has a considerably lower number of patent and IP protection applications than other EU countries, particularly among SMEs.”
Alistair reveals the 4 Shocking Reasons British Businesses are failing to protect their intellectual property:
Top of the list has to be cost. While applying for a patent can be relatively inexpensive, hanging onto that protection once it’s been granted can cost a business a small fortune. The ubiquitous ‘Patent pending’ is all but meaningless when it comes to protecting an idea, and the old adage of mailing yourself a copy of the plans and then keeping the envelope unopened is a misnomer – it’s highly unlikely that it’ll win you any court battles about who thought of what first by waving an unopened A4 envelope around.
#2. The Patent Box
To try and get around the concern regarding the financial cost, in 2013 the Government came up with the Patent Box (which was updated in 2016). This is designed to give SMEs with a bright idea some tax incentives to encourage them to register and protect their innovations and IP. The whole point of this was to boost economic growth and promote new business development. Very few businesses are even aware that the Patent Box exists, and even then, it only really rewards businesses once they have gone through the entire IP and patent process.
That still means that the idea needs to be protected initially, and that can cost a lot of money. For SMEs on a very narrow profit margin, the thousands of pounds it can cost just to protect an invention in the UK (let alone the rest of the world) could be the difference between profit and loss. That initial cost discourages many businesses to follow through on what could be a ground-breaking idea, scuppering new developments and potentially brilliant ideas purely on account of the cost.
#3. Potential Earnings Of A Brilliant Idea
However, if an idea, product or service is truly original, innovative and potentially a ‘game changer’, then that initial investment may well be worth it. The potential for a new product to transform the fortunes of an SME could be huge – but only if it genuinely is a ground-breaking idea. A rehash of an existing concept may be cheaper, but in the long run it could have a very limited market appeal, a short shelf life, and could even pollute a company’s existing brand. To turn a great idea into a genuine business asset it needs to:
- Be 100% original
- Be something customers actually want
- Have low production/high return ratios
- Have the potential for further development
- Be patentable – not just in the UK but around the world
#4. Thinking Outside The Patent Box
There is plenty of opportunity for UK businesses, especially SMEs, to benefit from the Patent Box and to keep that innovative spirit alive. However, both legal experts and those who specialise in patents and IP all agree that there needs to be more front-end support at the start of the process, in the form of loan financing for the patenting process. Take into account the UK Intellectual Property Office (IPO) fees, legal costs, searches and global protection fees and you’re talking about tens of thousands of pounds and up to four years’ commitment.
For any business, that level of financial commitment has to be considered very carefully. But if the idea really is that good, you could be investing in a major business asset that could transform your operation and catapult you to the next level.
For further advice or information on Commercial Law or other legal issues, visit www.millerhendrysolicitors.co.uk