By Max Clarke

Patent rights must be better protected as many smaller businesses cannot afford to sue companies which steal their ideas, the Forum of Private Business (FPB) have today said.

In its submission to the Hargreaves Review of intellectual property (IP) the Forum is urging the Government to provide greater protection for small business innovations after complaints that breaches are going unpunished because of the steep costs involved in pursuing them in court.

Further, the not-for-profit Forum believes that the high cost of both employment and manufacturing in the UK often leads to innovations being produced under license outside the EU — with significant transfer of knowledge abroad but no control over how it is used.

In addition to steep litigation fees, the Forum is concerned that patent costs, the slow process involved in protecting intellectual property, HM Revenue & Custom’s (HMRC’s) lack of clarity over the use of Research and Development Tax Relief and a lack of support within the UK’s public procurement process are combining to hinder innovation-led growth.

Some business owners even fear they are struggling to get overseas patents because foreign governments — particularly in the USA — are more inclined to protect indigenous innovations.

According to the Forum’s latest quarterly Referendum survey, 4% of respondents said their growth was being hindered by foreign government support for their overseas competitors and 7% reported that this form of protectionism made existing cash flow problems worse.

“Entrepreneurs are the UK’s real innovators and this innovation is one of the key elements that we need to nurture to drive economic recovery and growth,” said Alex Jackman, Senior Policy Adviser at the Forum.

“There are several long-standing issues in the area of intellectual property so many of the measures outlined in the Hargreaves Review are certainly welcome.

“Specifically, we want small business owners to be able to secure their intellectual property more efficiently and cost-effectively, including through greater overseas protection of UK patents and IP.

“We are also calling for better promotion of the concept of developing innovation, as well as improvements to supply chain cohesiveness and simpler, more effective tools and guidance alongside readily available specialist support, academic innovation hubs and incentives — including funding — to encourage small businesses to embrace patents and trademarks.”

Mr Jackman added: “We hope the Government takes these recommendations forward in the right way — it is essential that any changes to intellectual property law or the IP tax credit system are simple to understand, easy to implement and do not add to the £17bn annual red tape burden on small businesses.”

Forum member John Collier of Monument Tools Ltd in Wallington, Surrey, has developed a new type of pipe cutting tool. Its biggest market is now in the USA but he has experienced a number of patent and IP problems involving bigger companies bringing in similar products he believes should be protected designs.

“There have been cases where we’ve had IP protection but importers just ignore it,” said Mr Collier. “The tool is made in Asia, for example, put into the UK market and then they sit there waiting to be sued — in the full knowledge that small businesses can’t afford to sue them.

“There are cases like that where it’s blatant obstinacy and there’s nothing you can do about it because you can’t afford to — they are the big company and you are not. “

The Forum has been called to give evidence to the Government’s Business Innovation and Skills (BIS) Select Committee inquiry into the Hargreaves Review of Intellectual property on 1 November 2011.

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