You will have intellectual property (IP) in your business to some extent. It might be obvious and readily identifiable, such as a distinctive trading style, a customer database or copyright in the software you sell or licence. It might however be less obvious, such as copyright in your internal written policies, topography rights in semi-conductors or confidentiality in the black art or pixie dust which your employees use to operate a secret process. You might also need to ensure that you own IP which is rightly yours, for example where you commission a third party to develop some software, create some artwork or help you maintain a customer database. There is an important commercial exercise there, which should be completed at the outset, to ensure the IP is owned by you.
Most of you will understand the benefits of identifying the IP in your business and deciding which, if any, elements of it justify protection through registration, management or other investment where required. If nothing else, you need to move quickly if your IP is stolen or copied without licence. Timing is often critical where counterfeit goods are flooding the market, or a bad employee takes a database of customer information and attempts to sell it or use it as an unlawful springboard to compete. You might also lose the right to an early injunction if you delay; and not having your IP identified, registered and/or effectively managed will make enforcement much harder.
So, you’d be well advised to conduct, record and regularly update an audit of your IP and how it is managed. Also, don’t forget, please don’t disclose any ideas or information which you might subsequently want to patent or claim to be confidential – these things need to be carefully managed using non-disclosure agreements etc.
Isn’t it very expensive to enforce my IP rights through the court?
Having decided to what extent you want to protect your IP, you may at some point need to take action to stop an infringer, whether they be innocent or not. This is often where businesses become nervous and will assume that the cost of taking action through the courts will be out of their reach.
Many of the infringers we see are sophisticated and calculating. However, an equal measure are not, and will quickly apologise, give assurances and often offer compensation with little resistance. Those which are more calculating will ignore you or just prevaricate, bogging you down in detailed discussion about whether you own the rights you say you have (see above for the need to get your IP house in order). Sometimes court proceedings are unavoidable.
The good news is that we have access to a specialist Intellectual Property Enterprise Court (IPEC), which provides a cheaper and more streamlined forum for the enforcement of IP rights where the value of the claim is under £500,000 (or you are prepared to cap your claim at that level). Trials are limited to just two days and document disclosure and witness evidence is only allowed in relation to certain issues which have been agreed with the specialist IPEC Judge. Further, the maximum legal costs that the losing party will be ordered to pay is normally capped at £50,000 for the liability stage, and £25,000 if there is a subsequent hearing to assess damages. This cap on legal costs is particularly useful as it removes the frightening uncertainty that parties to High Court litigation face in terms of the potential to have to pay the other side’s legal costs, which there is a limited ability to control, if the case is lost. DMH Stallard was involved in some of the early cases in IPEC which defined the court’s jurisdiction and powers, including Xena Systems Ltd v Cantideck & Another EWPCC 1.
There is additionally a specialist small claims track in IPEC, which can resolve IP claims valued at under £10,000. Orders for compensation up to that sum, destruction or delivery up of infringing items and, most importantly, final injunctions (the court orders that prevent the infringer from repeating the offending conduct) are all available as remedies in respect of claims issued in this track. There are no orders for costs made in this court, regardless of the outcome, other than for misconduct.
Where compensation is not the priority, but an injunction to prevent infringing activity is, this court is ideal.
You’ve acquired your IP because you’ve invested in its creation or purchased it. It deserves to be protected and the IPEC now enables you to do that with far more clarity as to the implications of doing so.
If you have any questions about any matters arising from this article, would like an IP audit or any advice regarding your IP, please contact Tim Ashdown on tim.ashdown@dmhstallard.com or Hattie Chessher on hattie.chessher@dmhstallard. com or 01273 329833.
