Since the first lockdown last March there have been financial winners and losers and you don’t have to be a genius to spot which type of retail business has suffered the most and why.

With customers locked down and shops shut, established online retailers such as Amazon and those companies that have pivoted online have flourished. Retailers relying predominantly on Bricks and Mortar outlets have seen sales collapse and many are now carrying an unsustainable cost burden.

The evidence is clear to see. The last 10 months have seen a raft of large retailers with multiple locations going into administration. The list is a tale of fallen giants: Peacocks, Jaeger, Laura Ashley, Oasis, Debenhams and the once all conquering Arcadia group. The death of the High Street has been long predicted but Covid-19 has made it a reality.

What is worth noting however, is that all these brand names retained their value even in administration. The only assets Administrators have been able to sell for any value is the companies’ intellectual property. Prime examples are the Debenhams brand being sold to Boohoo for £55m (but not any of its stores), Marks and Spencer buying the Jaeger brand (but none of its stores), private equity buying the TM Lewin brand (but none of its stores) and the imminent sale of Arcadia’s brands (but none of its stores). Ultimately, the physical assets of these businesses have ended up worthless.

I suspect this trend will continue long after the pandemic has passed and it raises many questions about the long term future of the high street but, what is clear, is that never before has the intrinsic value of intangible assets been so high. It is now more important than ever that businesses, both old and new, focus on creating, exploiting and protecting their Intellectual Property. After all, it’s probably the most valuable asset they have.

I am a staunch supporter of IP rights. As an IP lawyer I spent most of my career helping companies protect their patents, trade marks and other IP  and have written many times about David vs Goliath fights  – the scourge of large businesses illegally taking advantage of a smaller company’s IP- which are all too common.

However, occasionally a story breaks that flips this sentiment on its head. The latest is a story out of Australia where a furniture maker has run into trouble with IKEA.

IKEA took offence when a start-up with the name Stylkea sought to register its name as a trade mark. Unsurprisingly, IKEA opposed the registration and requested that the business change its name.

Since then Kylie Hughes, the entrepreneur behind the business,  has garnered an awful lot of publicity claiming that she is being intimidated and bullied by IKEA and has invoked the David vs Goliath analogy. All she wants to do, she says, is co-exist with Ikea and get on with growing her business.

This is all very well but, unfortunately for Ms Hughes, IKEA has every right to take the action it has.

Firstly, it is inconceivable she had not heard of IKEA before settling on the name Stylkea and secondly, if she had, it is inconceivably that she did not think her business would benefit from having a name that was similar to the largest furniture retailer IN THE WORLD.

And this is the point.

The Ikea name has a huge amount of goodwill attached to it and the whole point of owning the IKEA trade mark is to stop 3^rd parties from unjustly benefitting from this goodwill (which has been built up over many years and at considerable cost!). Whichever way you spin it appears the name StyIkea has been used to syphon off this goodwill by perhaps confusing consumers into thinking that the business is in some way connected to IKEA, and this is unacceptable.

As a result I have very little sympathy for Ms Hughes and hope IKEA continues to fairly enforce its rights. I also hope that innocent small businesses that find themselves caught up in genuine IP disputes aren’t tarnished with the brush of opportunism that this case has a whiff of.

We are excited to be exhibiting at the Future Tech IP Summit on 27th November in London.  It promises to be a fascinating look at the importance of IP  to Tech start ups and if you are attending please come and say hello. It will be great to discuss how to protect these vital assets.

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…

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/

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!

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.

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.