Finders Keepers?

Posted on 7 Dec 2010 by The Manufacturer

Edward Machin explores the world of intellectual property, finding a reticence among UK manufacturers to value the cost/benefit analysis of product protection. When China gets on board, after all, you know it’s time to act…


You must lose a fly to catch a trout, said George Herbert, that 17th century poet, priest and unwitting advocate of manufacturing rights protection. Regarding the tendency to baulk at the cost of fortification rather than appreciate the value IP brings, however, he could not have been more prescient. “For those in the manufacturing space, the crux of intellectual property protection is, very simply, to avoid getting sued for products that infringe third party rights,” explains Barlow Robbins LLP’s head of IP, Nick Phillips. “Of course, this issue becomes more important in recessionary or nearrecessionary times.”

Rather critical, then, you would have thought.

And yet it remains an area ignored by many in the sector, with manufacturers in Germany and the U.S. significantly more alive to the commercial benefits inherent in protecting their designs. “When commissioning new machinery, having artwork designed or implementing innovative process control software, manufacturers in the UK wouldn’t dream of proceeding without a contract or, at the very least, an exchange of emails detailing the commercial terms,” says Lyndsay Gough, an intellectual property specialist at Keystone Law. She goes on to highlight perhaps the most common misconception surrounding IP: that payment to a supplier for original, creative materials — whether machinery blueprints or moulds, photographs for packaging or computer software designed specifically for a single business — will automatically result in the customer owning the underlying intellectual property rights. “This is not the case,” says Gough. “Ownership usually stays with the supplier, unless there is a transfer of those intellectual property rights in writing.” Worried yet? Intellectual property, in essence, encompasses a range of rights aimed at protecting intangible assets such as brands, inventive concepts and original designs. These include:

● Patents for new inventions – A patent can protect products such as finished items, component parts, machines used in manufacturing or a process such as a way of engineering an item or an automated method for assembling a product, provided they are new and are not obvious.

● Copyright for original written and artistic works – Copyright can protect almost anything put down on paper, including product descriptions and specifications, design drawings, sketches, photographs and software, provided they have not been copied from anything else.

● Design rights for the shape and appearance of products – Design rights generally protect the appearance of a product or a component based on its shape, texture or materials, and in some cases from its colours or surface decoration. The design does not need to be complex or highly advanced, provided it is new and has individual character.


Ignore at your peril
Where patents were once the sector’s go-to method of protection, manufacturers are increasingly looking to design rights as a means to safeguard their new products and technologies, says Megan Jones, a solicitor in Hill Dickinson LLP’s technology team. “While not a new form of protection, the simple and cost-effective nature of design rights means that their use has taken off in industries where the product needs to get to market quickly and/or its aesthetic qualities make it a differentiator,” she explains. “We are also finding that businesses are looking to exploit their design rights, typically by licensing the rights to manufacture and distribute products using their designs — which opens new supply chains and revenue stream opportunities that were not previously viable.” While intellectual property rights are not, as yet, uniform around the European Union, the laws will continue to merge and develop, according to Paul Gershlick of Matthew Arnold & Baldwin LLP.

Crucially: “Emerging economies are paying considerably more attention to protecting and enforcing intellectual property rights,” he says — the corollary being that IP systems in such territories are rapidly becoming as sophisticated as those in the West. According to Gershlick: “It is an area that can no longer be ignored.” Laura Ramsay, an associate at Dehns Patent and Trade Mark Attorneys concurs. Contrary to popular belief, “Officials in China are particularly keen to ensure that IP rights are upheld — even if one of their own manufacturers is the culprit,” she says. “British companies should not underestimate the potential for exploiting their IP rights in a global market.”