IP policy for SMEs – but which SMEs?

plan5According to some, national IP policy should support the creative and innovative sectors. The individuals who work in these sectors are often employed (or self-employed) in small and medium sized enterprises (SMEs). They include designers, photographers, artists, musicians and authors. Their creative output is protected by IP rights, including copyright. Often, they lack the financial resources or business scale to challenge misuse of their IP rights by ‘big business’ or by consumers who download their works from the internet.

In a slightly different category are the business sectors that depend on innovation in science and engineering, including computer software. Again, many of the innovators in these sectors are based in SMEs, but others are in major companies such as Apple or GlaxoSmithKline.

Reading the UK Intellectual Property Office’s draft 5-year strategy document, and the Conservative Party’s 2015 Manifesto, it is clear that the current UK Government has sympathy for the creative and innovative sectors. Encouraging the growth of new businesses generally, and IP-focussed businesses in particular, is seen as a route to improve the state of the national economy. The Manifesto includes ringing statements such as “With the Conservatives, Britain will be the best place in Europe to innovate, patent new ideas and set up and expand a business.”

The IPO’s draft strategy document reflects these priorities. It refers, for instance, to:

  • making the IP system simpler and less costly
  • ‘encouraging’ creators through the IP system
  • ensuring that businesses understand how to manage their IP effectively to support growth

These points, and others in the strategy, seem to IP Draughts to be focussed on the needs of small-scale creators and innovators, as distinct from major UK companies such as Dyson whose success depends partly on strong IP laws, or UK businesses that make use of IP rather than creating it, and whose commercial success could be prejudiced by IP laws if they became unbalanced in favour of the small-scale IP creator.

Assuming, for the sake of the argument, that it is right to direct Government policy to the needs of IP-dependent SMEs, which types of SME should be the focus of Government attention and support? SMEs vary widely in their scale, ambitions, financial resources, understanding of technical issues, and dependence on the protection of IP laws. Over the years, IP Draughts has seen Government attempting to ‘reach out’ to SMEs via regional development boards and other quangos, usually with limited success. Many SMEs have no interest in engaging with bodies of this kind; they are too busy running their businesses.

In IP Draughts’ view, if IP-related Government support is to be given to SMEs, it should be focussed on the types of SME that are most likely to produce a return to the UK economy from providing that support. This is not a call for a 1970s-style financial support for ‘strategic industries’, but rather is saying, if we are going to spend Government money on creating new IP systems that support SMEs, let’s take a hard-headed look at which types of SME are most likely to produce a benefit to the UK economy when they receive this support, and design the IP systems to be suitable for them.  For example, focussing on the needs of the ‘inventor in a shed’ may be less useful for the economy than focussing on university spin-out companies. Of course, this assumes that the purpose of Government policy in relation to SMEs is to improve the UK economy, rather than to increase the number of its supporters or out of sympathy for the SME ‘underdog’.

To focus the discussion, let’s take three, fictional examples that represent some of the categories of IP-dependent SMEs that IP Draughts has encountered. Should the Government target its IP policies on Xavier, Yvonne or Zac?

Xavier

Xavier is a self-employed designer and photographer. Most of his work is for large companies, helping them with advertising campaigns and branding projects. He is often asked to provide ideas for campaigns ‘on spec’ (and without charge to the client), on the understanding that if his ideas are selected, he will be commissioned to do further work.  This unpaid work can be very time-consuming, and depressing if the ideas are not accepted. Sometimes, companies ‘steal’ his ideas and use them to create campaigns in-house, without any acknowledgement or financial compensation. Although he has heard that the Intellectual Property Enterprise Court is considered a good and cost-effective court for smaller disputes, he has been told that it might cost him £50,000 to sue a company that takes his ideas, and he might be liable for another £50,000 if he loses the case and the court orders that he has to pay the company’s legal costs. He cannot afford anything like £100,000. The profit on each project is typically in the region of £5,000-£10,000.

Yvonne

Yvonne is the founder of a medical devices company, which is a ‘spin-out’ from the University of Rummidge, where Yvonne is Professor of Bio-Engineering. The company is developing a kit for non-invasive blood glucose monitoring, ie a means of helping diabetics to control their blood sugar levels without the need for taking blood samples or inserting tubes into the blood stream. There is a huge worldwide market for blood testing devices. Non-invasive devices have been attempted over the years but have never succeeded, on technical grounds. The company has received £500,000 in funding from a ‘business angel’. Yvonne knows nothing about  intellectual property. The business angel has indicated that the company will need another £5-£10 million to develop the product to the point where it can be licensed to a major company such as Boehringer, and that raising this amount from venture capitalists should be achievable if the company keeps hitting agreed milestones for developing the product and validating it.

Zac

Zac runs a health-food store in Islington, London. He started the shop after leaving university. Business was very slow for the first 7 years, but he has gradually built up a loyal following for his range of ‘detox drinks’. He would now like to expand the business and a friend has suggested to him that franchising across the UK may be the way to go. He has looked at the IPO’s website and learnt that he should apply for a trade mark for the drinks, which he calls SupaCleanse. He calls up the IPO’s helpline and they guide him through the steps for applying for a UK trade mark. They put him in touch with a commercialisation adviser (not part of the IPO) who confirms that he complies with the British Standard for Commercial IP Services, and who says he can arrange for the drafting of a franchise agreement and a ‘bible’ of technical information on how to run the franchise.

ynotOver to you, dear readers. If you were in charge of Government IP policy, which of these individuals (and their companies) would you target as a ‘type’, when designing SME-friendly IP systems? Or should it target all three? Will it help the economy to focus on the needs of Xavier, Yvonne or Zac? If the Government has limited resources, where should its priorities lie?

 

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Learning transactional skills

middleIt has been a busy week. IP Draughts’ client work on Monday and Friday seemed like light relief compared with the three middle days, which were spent running a new training course. Three days in a row “on stage”, using untested material, is rather demanding!

The course was for LLM (Master of Laws) students at University College London. The subject was transactional skills. The course tutors (mainly Jelena Madir and IP Draughts, but with support from a new Anderson Law associate, Francis Davey, on day 3) introduced students to some of the issues that they would face when they started work in a law firm.

45 students signed up for the course. They were mostly from outside the UK. Colombia, Cyprus, Germany, India, Russia and Ukraine were some of the countries that were mentioned by students.

The topics that were covered on days 1 and 2 included the role of the lawyer in commercial transactions, the typical sequence of events in a large commercial deal, the structure of a contract, contract drafting techniques and techniques for clear legal writing generally. On day 3, students elected to work on an international financing deal with Jelena, or on an international technology collaboration with IP Draughts, and this day included sessions when the students were divided up into teams to negotiate the deal.

new york barFor IP Draughts, the most interesting aspect of the course was meeting the students and hearing their views on various topics. In the previous week he had participated in a discussion of the English Law Society’s strategy, in which it had been suggested that the UK was losing out in a race with the USA to attract overseas law students and to get overseas lawyers to become dual-qualified. It was good to hear the students explain this subject. It seems that US universities are even more expensive than those in the UK (it apparently costs £19,000 for an overseas student to take an LLM course at UCL) but it is easier to obtain the New York Bar qualification while doing a postgraduate US law degree than it is to qualify as a UK solicitor. The immigration rules are currently stricter in the UK than they are in the USA.

Note: IP Draughts does not wear a bow tie when lecturing.

Note: IP Draughts does not wear a bow tie when lecturing.

IP Draughts’ previous experience of teaching on an LLM course had been that many of the overseas students sat passively in the audience. In the absence of a well-established ‘Socratic method’ in UK law schools (we tend not to pick on students and demand answers to questions, in the way that is apparently done in the USA – think Professor Kingsfield in the Paper Chaseit is too easy for students to keep their heads down and say nothing. In the announcements for this course we had emphasised that students would be expected to contribute to the discussions, and thankfully most of them did.

IP Draughts was impressed by the quality of the students in last week’s course, and their willingness to engage with the topics that were being taught. We should encourage people like them to contribute to life in the UK, and not make it difficult for them to do so through the blunt instrument of immigration policy.

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Strategy meetings – are they worth having?

strategySelect a dozen or so people who have a common interest but different perspectives on a subject, say intellectual property or legal services. Select people who represent ‘stakeholders’ in the subject. Give them a draft document that you wish to discuss with them. Hold a meeting lasting an hour and a half, at which you canvass their views on the document.

Last week, IP Draughts participated in two such meetings. The first was a meeting of solicitors to discuss the Law Society’s corporate strategy. The second was a meeting of various trade bodies to discuss national IP strategy.

The two meetings were very different in their participants, subject-matter and the way they were run. But in some ways the meetings felt very similar. You may think that some of the following points are obvious, but they only became obvious to IP Draughts after reflecting on how the meetings went, and how they differed from the meetings of IP lawyers and business people that he is used to attending.

  1. It is very difficult to develop any coherent conclusions on a topic when (a) the topic is complex and multi-faceted, and has numerous points of detail, (b) the meeting participants have widely-differing interests and personalities (and in many cases have not met before), and (c) you only have an hour and half to discuss the topic.
  2. Getting people to stick to an agenda, and to discuss their pet subjects under the relevant agenda headings rather than download their ideas all at once, is much harder than one might expect.  Strong chairmanship is required.
  3. Meetings develop ‘group-think’. The nature of that group-think depends on who has been invited to the meeting.

These comments make some tacit assumptions as to the purpose of the meeting, eg that they are intended to find solutions to problems through discussion. But what if the purpose of the meeting, at least on the part of the people who called it, is to ‘engage’ with stakeholders in the wider sense, without necessarily expecting (or needing) that engagement to lead to any consensus?

By contrast, meetings of the Law Society’s Intellectual Property Law Committee seem much more productive. This may be partly because:

  1. Under our current Chair’s guidance, the IPLC has been good at sticking to an agenda in its meetings. Preparatory work is done outside meetings, eg through the development of draft submissions on proposed legislation, and sufficient time is given in the meeting to discuss each point in a focussed way.
  2. Members of the IPLC get to know one another over several years, and develop a productive working relationship.
  3. Members of the IPLC are not representing ‘interests’, other than in the very general sense of all being specialist IP lawyers.
  4. IP lawyers tend to take what IP Draughts calls an ‘engineering approach’ of trying to find workable solutions to problems.

Similarly, client meetings that IP Draughts has attended, eg of the executive committee of a listed biotech company, have been focussed, kept to an agenda and produced relevant conclusions.

It is not surprising that strategy discussions take more of a ‘blank sheet of paper’ approach, and this inevitably leads to a looser discussion. But IP Draughts is left wondering about exactly what the purpose was of the meetings he attended this week and whether, in the minds of the organisers of each of those meetings, the purpose was achieved.

 

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Volunteer speakers – a big thank you!

Take a bow...

Take a bow…

Our 5-day course, Intellectual Property Transactions: Law and Practice, has now been running for 3 years at UCL, and we hope it will be a long-term fixture. Designed for newly-qualified UK IP lawyers, it has also attracted lawyers and patent attorneys from all over the world, including the USA, Japan, Costa Rica and Brazil.

The success of the course is based largely on the quality and commitment of its volunteer speakers. We would like to thank them all for preparing high-quality materials and delivering stimulating lectures and workshops, as confirmed by the excellent feedback that this course gets every year from its students.

The course is led by Mark Anderson of Anderson Law and UCL, and by Professor Sir Robin Jacob of UCL. Special mention should be made of the following people, who lead teams from their firms giving an extended programme of talks:

Mark Lubbock from Ashursts, whose team runs a half-day session on IP aspects of M&A transactions
Nigel Jones from Linklaters, whose team runs a half-day session on IP as security
John Enser from Olswang, whose team runs a half-day session on media transactions

Other firms including Bristows and Pennington Manches provide similar levels of support, spread among several speakers. The speakers and workshop facilitators at the 2015 outing of the course were:

1. Mark Anderson of Anderson Law
2. Chris Bates of Ashurst
3. Christine Bendall of PharView
4. Kathy Berry of Linklaters
5. Michelle Blunt of Baker & McKenzie
6. Stephen Brett of Anderson Law
7. Simon Bullock of Ashurst
8. Toby Crick of Bristows
9. Sam de Silva of Pennington Manches
10. John Enser of Olswang
11. Michael Fealy QC
12. Louise Fullwood of Pinsent Mason
13. John Hull of Farrers
14. Robin Jacob of UCL
15. Nigel Jones of Linklaters
16. Tomos Jones of Olswang
17. Mark Lubbock of Ashurst
18. Leigh Martin of Clarion
19. Christoph Rieken of Ashurst
20. Judith Schallnau of WIPO
21. Chris Shelley of Pennington Manches
22. Paul Sidle of Linklaters
23. Sally Shorthose of Bird & Bird
24. Jeff Skinner of London Business School
25. Adrian Toutoungi of Eversheds
26. Joanne Vengadesan of Pennington Manches
27. Patricia Wade of Ashurst
gold star28. Philip Wareham of Hill Dickinson
29. Matthew Warren of Bristows
30. Tim Worden of Taylor Wessing
31. Cerys Wyn Davies of Pinsent Mason

A big thank you to all of you!

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