The Pitfalls, Traps, and Hidden Value of IP
On the 13th of June, hgkc ran a breakfast roundtable at Square Works, Bristol, on the pitfalls, traps, and hidden value of IP. The event was chaired by Peter Quintana, Director of hgkc, and facilitated by hgkc Director and innovation expert, Kim Jones, and Keystone Law’s intellectual property and technology specialist, Jessica Bent.
Joining Kim, Jessica and Peter were leaders and owners of businesses, keen to learn more about the different types of IP and how to ensure that their businesses were properly protected:
- Stuart Fyfe: MD of Mothership Technologies working in computer service and AI.
- Emily Kenna: Insurance Broker from Sense Risk Solutions who provide commercial insurance.
- Sophie Shaw and Summer Dean: Creative Producers of Wake the Tiger, an immersive interactive business, that creates stories, characters, designs, and scripts.
- Graham McEvoy: MD of Wake the Tiger.
- Dominic O’Neill: Director of Cotham Technologies who help anybody create their own digital apps.
- Jon Waring: owner of 3Sixty, a website developer for the travel industry.
- Sarah Chilcott: MD of The Planning Portal, used by Local Government for planning applications.
- Adrienne Noonan: Associate Head of the School of Arts at UWE, working with students and staff in creative outputs.
- Nairn Robertson: Founder of Active Teams working with businesses to help their employees be more active through education and challenges/competitions.
Jessica opened the roundtable by acknowledging the biggest mistake people make when it comes to IP - understanding ownership. She said that if a business engages with another company to create something, they don’t own the IP unless there is a contract in place to establish ownership. This is particularly important when working with third parties, such as web designers, suppliers, and freelancers. She further went on to say that the time to think about IP is now, before you do any marketing. Peter added that if you are not protecting your property, your competitors will be able to use it.
Jessica explained the different types of IP in what she called the IP triangle. The lowest level being copyright, which happens automatically, belonging to the individual who created it, unless otherwise indicated by a contract. The next level is trademark, followed by design rights, and the highest-level being patents, which is the most expensive and least prevalent. Patents are used to protect inventive products and processes. You cannot patent software (in the UK), but you can patent the technical effect a system produces.
Emily put forward the question, at what point do you need to take out IP insurance? To which Jessica answered, in smaller markets it is rare for people to take insurance as it can be expensive and would depend on if it covers someone suing them or if they want to take action. She went on to say that the smallest claim would roughly be £5,000 but it would be much more likely to be around £50,000 and 98/99% of cases would settle before it even gets to court. As the conversation moved on to employees and their rights within an organisation, Jessica advised that employers need to make it clear in employment contracts that anything an employee creates in the course of their employment for the business would belong to the employer.
A question about the line between someone sharing an idea and someone ‘stealing’ it was asked and how could someone protect their ideas, does it need to be written down and do emails count? Jessica stated that there is no IP for an idea. For copyright to exist, the idea must be in a fixed form, either written, film, audio, etc., and emails do count. Designs and ideas need to be recorded as soon as they can be, as for copyright purposes there needs to be evidence of creation. Kim pointed out that “All ideas are born equal but not what happens next. What happens next is the important bit.” Sophie said that people need to be careful with who they’re pitching to and the way they pitch, to make it harder for projects to be done, or credit to be taken, without being involved in the implementation.
The discussion then turned to investors, and Jon expressed that their software platform has been trademarked and that they have investors interested, however, Jessica advised that they need an NDA before starting their discussions, and they would need to talk to a corporate lawyer. Graham pointed out that some investors refuse to sign an NDA, but generally that’s venture capitalists because they see so many proposals all the time that they could tie themselves in knots. He went on to say sometimes they continue the conversation and sometimes they don’t. Kim responded by saying if they’re not willing to sign an NDA, then they are not the right investors for you.
Working with third parties and freelancers was discussed and understanding whether a creator, who has created something for you, needs to re-use their design. If they do, then Jessica said a licensing agreement is needed. She advised that it works better if the company owns the rights, and the creatives have a license, if the company developed a lot of the copyright. It is about finding a balance and what is most appropriate for their situation. Trust is important when creating contracts and agreeing licensing. It can be difficult having conversations with creatives as naturally they would want to keep the rights to their own creations. Adrienne pointed out that can be a murkiness in universities and ambiguity surrounding the IP in “hard/soft” design and other creative content outputs as to whether it belongs to the student, staff or the university. It is important for students to be taught how things work commercially and that businesses also need to be respectful of freelancers and their desire to use their creations in portfolios. It is better to have an agreement where they can use the creation with accreditations to the business. The group then discussed what design rights were and how since Brexit they have become more complicated as automatic EU rights have been replaced by UK laws. Jessica advised that design rights can be used to protect industrial design, surface decorations, wallpaper, jewellery, etc. They can be registered as long as they are novel. This is the same for patents. They need to be new, which means they do not exist anywhere else in the world.
Dominic then asked at what point to do something if your IP is being infringed? Kim advised that you should start with a friendly approach. She warned that it is possible that you may receive some unpleasant responses. If a small business is at odds with bigger corporations, they could use social media and PR to encourage bigger companies to step back. They will have people constantly monitoring and defending any negative PR, so this would be the first chink in their armour, however, Jessica warned that you need to be careful using social media, as you could be accused of defamation. Kim further said that a lot of brands will acquire the rights to lots of things to ensure that other businesses are unable to use them.
Sophie asked about the best way to agree joint ownership or sharing ownership between multiple people. Jessica said that this is a bad idea as you would have to regulate what each party can do with the property, and they will need to ask each other for permission to do things outside of standard rights. In most cases the majority owner will end up licensing to the other party.
It is important to understand your intellectual property and who has ownership especially if your business works with many outside parties. Disputes can be complicated and expensive to resolve so it is best practice to ensure that all contracts and agreements are made prior to projects starting. As Jessica said the biggest problem businesses face is understanding ownership, so make sure that your business has all the right contracts in place, and you own your IP.