Protecting Your Innovation in a New Industrial Era

Engineering Magazine October 2019
http://www.potterclarkson.com/

These are unique times for manufacturing and engineering firms, with greater technological convergence and an increasing number of new, non-traditional market entrants across all areas of industry from medtech to automotive.

Technology giants, such as Google and Uber, are spreading their tentacles into areas that were once the preserve of more traditional manufacturing and engineering players. Known for market disruption, the increasing presence of these ‘super-innovators’ is dictating a new pace of innovation in the sector. This makes for a more competitive marketplace and, arguably, a more litigious one, which means that effective intellectual property (IP) protection and enforcement are more important than ever.

As competition increases, it is vital that innovators know how to respond if they discover another business is using their idea for commercial gain. So, how should a business prepare for the prospect of copycats muscling into their market?

Getting your house in order

The first stage of protecting and defending your IP should be a full audit of your business’ IP assets. Once completed, setting up a centralised database of a company’s registered and unregistered IP rights, along with associated renewal dates and key technical details, is a simple but hugely effective means of managing the process moving forward.

Indicating that IP rights exist can also stand businesses in good stead. For example, using the appropriate registered trademark and copyright symbols (™ and © respectively) on marketing and other promotional materials, as well as corresponding patent or registered design numbers, puts the public and competitors on notice, and is likely to deter copying and counterfeiting. Patent and registered design owners can also mark their products with the relevant registration numbers or, as is more usual nowadays, include a company weblink to these details.

Keeping a close eye on the activities of your competitors and new market entrants is a further productive and pragmatic way of being watchful over your own IP portfolio – after all, no competitor is ever normally likely to go out of its way to inform you of an intention to infringe one or more of your IP rights. Such monitoring involves practical steps like checking websites and brochures for any new ‘suspect’ product launches and closely watching trade shows where innovations are very often first launched to market. Also, from a brand perspective, specialist domain name and counterfeiting watching services can be commissioned.

How do businesses know if a competitor has a case to answer?

IP rights allow the owner to control how the respective right is exploited or otherwise commercialised, which may include giving some parties permission to do certain things, while preventing exploitation by other parties.

Infringement typically arises when acts are carried out without permission. For example, an innovative new product protected by a UK patent cannot be made, sold (or offered for sale), used in the UK, or imported into the UK, without the patent owner’s consent.

Escalating matters…

Assessing whether third party acts constitute an infringement can be complex, particularly in relation to alleged patent infringement; and so, if you suspect it has occurred, seeking the right professional advice to validate your concerns is essential.

Compiling a detailed dossier to take to a specialist legal adviser will significantly speed up the process. This should include details of the allegedly infringing act and information on the potentially infringing party, for example where they operate and in which locations they appear to be infringing.

If the outward appearance of a competitor product is a concern, then a picture from a brochure or website of the allegedly infringing product, or a sample physical product itself (if you are able surreptitiously to purchase one – and it is not too big to deliver!), are helpful. Meanwhile, with regard to alleged patent infringement by a product, technical details of the infringing product, for example how it works, are particularly useful, as can be a sample product.

The next step to consider is whether to take action. A common question a potential claimant asks itself at this stage is how commercially damaging are the infringing acts. For example, are product sales being lost or is reputational harm occurring? Also, on the flip side, what would be the impact if your rights were challenged (as is typical in a counterclaim to infringement) and subsequently revoked? How feasible and likely is a victory against the competitor given its size, status and reputation? And, finally, how might undertaking action impact your organisation’s longer-term goals, both financially and as a required focus for senior management?

While most cases settle out of court through a variety of means such as arbitration, mediation or bipartisan commercial negotiations, having a suite of IP rights to bring to bear is often a decisive factor in settling on favourable terms. In those instances where legal proceedings are considered the best course of action, there are a variety of forums to consider – from the relatively low cost UK Intellectual Property Office, through the Intellectual Property Enterprise Court for serious but lower value disputes, such as those often encountered by SMEs, to the High Court for the most technically challenging and highest value cases. A specialist IP legal adviser, such as those in our Dispute Resolution and Commercial team, would be able to advise on the most appropriate enforcement strategy and associated court route.

Facing an accusation of IP infringement

When it comes to defending your own commercial activities, again good quality housekeeping is the initial order of the day. That means keeping a paper trail relating to product developments and the individual designers and inventors involved. It should also include considering possible freedom to operate issues, especially when moving into a new technical area or market, as this can reduce the risk of infringing existing rights. Such an investigation can also identify the need to take a licence, before potentially costly commercial action is taken.

Companies that find themselves on the receiving end of correspondence alleging infringement shouldn’t bury their heads in the sand. In such a scenario, seeking appropriate legal advice is essential, as will be responding to the correspondence in a timely manner in order to reduce the risk of enforcement steps being taken without warning.

In many of these scenarios, weighing up the pros and cons of proactively fighting the claim, or opting for the issue to be resolved more quietly, will be the order of the day. Typically, options for businesses on the receiving end of a patent or design infringement claim include pulling the allegedly infringing product from sale (if this is possible), rebutting the action by arguing that the product does not infringe and/or that the right being asserted is not valid, or seeking settlement through negotiation or the taking of appropriate licences for the product.

Ultimately, protecting a business’ IP is as much about good systems and procedures in-house as it is being mindful of the activities of the competition externally. Those businesses that invest the time and effort to robustly identify, protect and enforce their IP assets will be best placed to take advantage of the innovation dividend in this ever-competitive market.