06/11/2014

By David Bloom, IP lawyer and Founder, Safeguard iP

There’s a common perception that a corporate giant can steal a great idea from a start-up with ease and not worry about the consequences.

Sadly, this remains a fairly accurate perception. To a distressing extent, small businesses lack power when it comes to protecting their intellectual property (IP). This has repercussions not only for individual SMEs and entrepreneurs but also the wider economy, so it’s not surprising that the Government, through the Intellectual Property Office, is working hard to address this.

To understand the issues at play here, we need to get to the root of the problem: as a small business owner or entrepreneur, you’re the only one who has an interest in protecting your IP.

Let’s say a company has invented a small gadget that allows you to find out where you parked your car, and has patented the technology to deter competitors from copying it. Now if you go out and steal one of these gadgets from the company’s warehouse you’ll have committed theft, a criminal act. The company will probably file a report and you’ll have the police on your case, trying to track you down and prosecute you.

Let’s say instead of stealing one, a rival company works out how the technology works (pretty easy given that patents are listed for all to see) and starts to make and sell copies of the product without permission. The rival will have ripped off the idea and caused financial damage to the inventor, but this time, there’s no-one looking after his or her interests. Sadly, the police don’t arrest people for most types of IP infringement.

It falls to the owner of the technology to take the infringer to court. As an SME, going to court means that the you will be paying for lawyers – yours of course, but you’ll also need to pay for the other side’s legal costs should you lose.

Costs here are far from trivial: the Government has taken some positive steps by creating the Intellectual Property Enterprise Court (IPEC), which limits costs, but a patent case could still cost you between £50,000 and £100,000 depending on whether you win or lose.

So what can you do to stop this happening?

The first thing to consider is that you won’t be able to do anything unless you’ve identified your intellectual property and taken steps to protect it. This means registering patents to protect inventions, trade marks to protect brand and company names and designs to protect the shape of newly developed products. Registering these rights makes them easier to enforce against copycats. Copyright protection for creative works such as online content and software automatically exist but all such work should be marked with a ©, your company name and the year of creation.

The next thing you should do is keep an eye out for copycats. It’s entirely possible – if you don’t take precautions – for someone to steal your IP and quietly make money from it without you even knowing it, especially if the infringer is overseas. There are services which you can pay for which will alert you if someone is registering similar IP to yours, but you might even get some value from Google Alerts, which are free to set up or by attending industry events such as exhibitions and conferences.

Lastly, you can stop take the precaution of insuring your IP. Small businesses are at huge risk of IP theft, because people presume – correctly, unfortunately – that they’re less likely to have the money to fight it. You’d need to be quite the masochist to rip off Apple given their legal budget, but what’s a small company with limited means going to do if you infringe its IP?

This is where IP insurance comes in. A decent IP insurer will talk to you about your IP and give you a quote to insure it. Should someone infringe your IP, that insurer will then fund the court case. Different levels of protection are available, and the insurance policy also acts as a kind of deterrent – by advertising it, you can make would-be infringers aware that you have the means to protect your IP in court.

While the situation for UK SMEs is by no means perfect, the Government and markets are doing a good deal of work to level the playing field for small businesses.

There’s still much more to be done though, and the onus is still on SMEs to look after themselves – as a small business owner, it’s vitally important that you actively protect your most valuable assets.