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Fidget Spinners – A Cautionary Tale

If you have kids under 10 years old you are likely to have heard of the Fidget Spinner. Its the latest craze sweeping across playgrounds in the US and UK.

As kids crazes go, I have seen worse. Prices start at £2.99 and the Spinners don’t make a noise, don’t make a mess and wont numb the brain but, as with all these fads, the kids will no doubt move on to the next shiny new thing within weeks.  When this happens, it will be interesting to see who has gained most from the millions of these Spinners currently being sold.  For me, this is the most interesting part of the story and one that teaches an important lesson to innovative companies around the world.

The Fidget Spinner was invented by an American lady called Catherine Hettinger back in 1997 and, with a great deal of foresight, she patented her invention. However, as with many unfunded inventors she had real trouble convincing toy manufacturers to make the product and by 2005 she had given up trying. Crucially, she let the patent lapse because the $400 renewal fee were seen as too great an investment.

So when 12 years later the Spinner became ubiquitous in both the US and UK you would understand if Ms Hettinger was somewhat depressed at missing out on a fortune. But apparently not. She claims she is just happy that the Fidget Spinner has seen the light of day and been such a hit.

So the purpose of this article is both to commend Ms Hettinger for her equanimity but also, because we are an IP blog, to consider what she should have done to ensure that when the tills started ringing, she was the one who profited.

Well, keeping up with the patent renewal fees is the obvious first step.   This would have allowed her to assert her rights and recover damages.  However, it is worth pointing out that the patent would have expired this year (20 years after filing) and it would not have prevented copies being sold outside of the US. Nevertheless, Ms Hettinger could certainly have recovered damages way in excess of the renewal fees she was unwilling to pay.

Patents though are expensive to acquire and maintain so its always important to consider other cheaper rights when deciding how to protect your products. In this case, both design rights and trade mark rights could have come to Ms Hettinger’s aid. Both are far cheaper to obtain than patents and both can be easier to enforce.  So, with the benefit of hindsight, in addition to keeping up with her patent renewal fees, Ms Hettinger should have considered trade marking the name ‘Fidget Spinners’ to protect the brand and also register the design of the product, thus giving her additional layers of protection at not much more cost.

So this is a cautionary tale. If you are an innovative business that has come up with a new product or design, think carefully about the myriad ways you can protect your hard work so that if, one day, it does become the next shiny new thing, it is you that reaps the rewards and not some opportunist  copycat. Read more…

Mitigating IP risk

I was recently asked to write an article for the IP100 club on the latest developments in the IP insurance market .  Please click on the link below to see what I had to say and, if you’d like to learn more, please do not hesitate to get in touch.

http://www.bqlive.co.uk/national/2017/04/03/news/taking-on-the-trolls-25497/

 

 

Duran Duran – Is There Something I Should Know?

Well, yes. Copyright Law would be a good start.

When Duran Duran, everyone’s favourite 80s band (except of course if you were a fan of Kajagoogoo) first started out they were put under a great deal of pressure to sign up with a record label. As seemed the norm back then, not much consideration was given to the terms of the deal and the band promptly signed away the rights to all their songs for a very long time. It is clear that they either did not think the value of their copyright would ever amount to much or they were too drunk to care. Either way it was a poor decision with the band going on to sell over 100 million records.

The one chink of light was a little known US statute that allows copyright to revert to the original owner after 35 years, regardless of any contractual term to the contrary. In 2014, 35 years after the deal was signed,  Duran Duran served notice on the copyright holders, a record company called Gloucester Place Music, confirming that copyright in the songs was reverting back to them. Gloucester Place objected and claimed the notification amounted to a breach of the contract.

Unable to resolve the dispute, the parties came before the English Courts in November and the outcome was not a good one for the band. In a decision that shocked most observers, the judge found that the terms of the UK contract trumped the US statute and ordered that the copyright stay with Gloucester Place.

When analysing this decision it is clear the band lost because their lawyers failed to submit key evidence on the US statute and how it applied to the case. They assumed the point was-self evident to the judge when it clearly was not.  This was a fatal error. There is now an appeal pending but it would not be surprising if Duran Duran found a new set of lawyers to handle the case!

The moral of the story is clear, getting good IP advice at the beginning of a negotiation is as crucial as it is when deals go bad!

 

Safeguard iP- Proud Partners of the IP100 Club

We are delighted to announce our partnership with the IP100 Club, an innovative idea from the guys at Metis and Partners in Scotland. Like us they understand the value of IP and the importance of it being captured and exploited.  They therefore set about doing what no-one has done before and create a league table of the most innovative companies in the UK.

All businesses that own IP can apply to enter the league and Metis and Partners will assess the IP against a set of criteria and award it points. If sufficient points are awarded that business enters the league. The rewards are two-fold. Firstly, it showcases the IP and puts it in the shop window for investors and potential purchasers to see. Secondly, it allows entry into the IP100 Club which provides a great networking opportunity for all involved.

We think this is a fantastic initiative which encourages businesses of all sizes to think about what makes them unique. IP plays a crucial role in protecting competitive advantage, especially overseas, and those companies in the league can inspire others to think about what makes them great and exploit it to their maximum advantage.

Please get in touch if you would like to learn more.

 

Will Brexit scupper the Unified Patent Court?

The costs of obtaining and enforcing patent rights in Europe has always been a cause of concern for British SMEs. Getting an idea from garage to grant in each individual member states takes a ludicrous amount of time and money. The excessive cost of enforcing those rights only adds to the impression that the IP system was not designed with SMEs in mind.

The good news is that the people who designed the system have long recognised its flaws and over the last 30 years have sought to develop a new system that is more efficient and costs less.

The result is the Unified Patent (UP) which, in principle, makes perfect sense. It is a patent that, once granted, provides protection across all member states so that it takes less time to acquire and, in theory, costs less. It can also be enforced in one action through a newly created Unified Patents Court.

As you’d expect, negotiations on how this system would work in practice (where would the courts be based, what would be the common language etc) have been tortuous, but remarkably, last year 26 out of the 28 member states agreed in principle to the new system. A launch date of Spring 2017 was set for its launch.

The only spanner in the works was the UK referendum. If the UK voted leave the whole project would be dead in the water, or so we thought.

Since the referendum, the Government has been quiet on its position towards the UP. Yesterday that changed and in a somewhat surprising announcement (which has had little coverage in the mainstream press) the government confirmed its commitment to the new system with a view to it launching next year.

In my view, this is great news for innovative British SMEs who should be able to obtain cheaper patent rights across Europe and spend less on litigation.

The glaring issue is that being part of the UP system is at complete odds with the clear agenda set by Brexiteers. As part of the UP system, UK Courts will be subservient to European Courts which could create a scenario whereby a court in Paris could shut down a factory in the Midlands if it was found to infringe a German company’s patent. You can picture the front pages already!

So whilst the news on the UK’s commitment to the system is positive, it will be interesting to see how things pan out in practice. It is difficult to see how our participation can continue post-brexit given the strength of feeling on sovereignty.

I will keep you updated on developments.

 

Revolutionary New IP Insurance Product

For two years now I have been banging the drum for IP insurance. I  believe there is little point owning IP if you do not have the funds to enforce it. IP Insurance provides peace of mind to management, investors, lenders and licensees that these valuable assets can be protected, if necessary.

The IP Insurance market has developed rapidly. Premiums have fallen and a range of new products have come to market but today sees the launch of a revolutionary new policy. Designed specifically for  companies with a turnover of less than £5million this policy is the most comprehensive and affordable ever.

Cover includes (as standard) the costs of worldwide enforcement and defence actions, disputes under IP agreements, product recall costs and damages. All the insured’s IP is automatically covered and premiums are fixed (subject to industry and claims history) at the lowest levels ever:

£1m of cover (£500k of which can be used for any one enforcement action) costs just £5k plus 9.5% tax

£500k of cover (of which £250k can be used for any one enforcement action) costs just £3,500 plus 9.5% tax

Excesses are £10k for UK actions and £25k for US actions

Co-insurance is 5% for defence actions, 10% for US defence actions and 15% for enforcement actions.

Small businesses no longer have to fear the costs of IP litigation. For a small monthly payment you can buy comprehensive insurance cover which will make competitors think twice about infringing  rights and increase the likelihood of settlement.

Safeguard iP is delighted to have exclusive access to this product so call us today on 020 3036 0551 to protect your investment in IP . Quotes can be provided over the phone in minutes.

The value of IP insurance

I have just returned from an invigorating BIBA conference in Manchester. For those of you who do not know, the British Insurance Brokers Association’s annual conference is the largest gathering of insurance professionals in the UK.

I had the privilege of participating in a seminar on the importance of IP insurance and there is no doubt that awareness of these policies amongst brokers, IP professionals and  right holders themselves is on the rise. The seminar included a presentation by a Senior Policy Advisor at the UK Intellectual Property Office (IPO) who spoke passionately about how IP insurance is a vital element in the protection of UK innovation.

It is no secret that the UK lags well behind other industrialised nations in the number of patents  granted per head of population and the IPO believe that, in part, this is because SMEs fear the cost of having to enforce these rights.  IP Insurance  gives companies the fire power to stop infringements when they occur.

A perfect storm is brewing where IP is now a key driver business value but the risks to that value are greater than ever.  Smart directors and shareholders recognise this and, with our help  are taking steps to mitigate that risk and add real value to their IP assets.

Please get in touch if you would like to learn more.

 

The Law is an Ass

As an IP litigator I spent 15 years helping business enforce their IP so I know how difficult it is to predict the outcome of IP cases. From experience you cannot take anything for granted. However much you believe one party is in the right, the law may not see it that way.

And this was the case with the recent Trunki decision.  Now, I have not yet read the judgement and am guessing the Supreme Court got the law right, but this doesn’t make the decision any easier to take.

Here you have a great British success story. An idea that went from the drawing board to market and was a great success. And unlike many UK businesses, Trunki understood that protecting its IP was important. Nonetheless, when it came to stopping a company who had admitted copying their products they ended up spending 3 years and a significant amount of money for nothing. In fact, its worse than that, now every competitor knows exactly what they need to do in order to rip them off without being sued.

Its a bitter pill to swallow.

The lessons are many. From ensuring you get good legal advice about IP at an early stage to thinking twice about embarking on costly litigation, but this is little consolation to Rob Law and his team at Trunki.

They need to dust themselves down and get on with making great products. Something they have proved they are more than capable of doing.

The UK Government highlights the benefits of IP Insurance

I have been talking about the benefits of IP insurance for many years and I am delighted to say the UK government, through the intellectual Property Office, have now recognised the value it can add to SMEs. They have issued guidance on the benefits of IP insurance and it is worth a read here.

There is now a real belief amongst IP professionals that IP insurance provides vital protection against a number of growing risks.

If you would like to learn more, please do get in touch.

Yosemite National Park- A Cautionary Tale

A case in the US caught my eye this week. It involves the Yosemite National Park and a third party contractor who, for over 20 years, provided catering and other services to the park and its famous hotels and restaurants.

The contract went to tender last year and the incumbent lost and then promptly sued the park and the newly appointed service provider for trade mark infringement. The claimant argued that when it first won the contract it paid a significant premium to obtain various trade marks owned by park, including the name of the park itself.

It now values these rights at $51 million and is preventing any other party from using them until this sum is paid. Yosemite is strongly denying the claim. For fuller details see here

Unfortunately the legal outcome won’t be known for some time but it does raise the key issue of Intellectual Property ownership.

When advising clients on contracts with third parties the first question I always asked was ‘who will own the IP?’ It might seem obvious but as Yosemite’s problems highlight, confusion can reign.

Whether you are collaborating to create IP, partnering to promote it or sharing to monetise it, it is crucial the contract is crystal clear on who owns which rights and in what capacity.

Fighting over IP is an expensive business, so don’t get caught out.