UK businesses who want to protect their products and technologies through patents and design rights will be better off as a result of a new Intellectual Property Bill tabled today by Intellectual Property (IP) Minister Lord Younger.
The Bill, published today, proposes changes that would help businesses to better understand what is protected under the law, reduce the need for costly litigation, and provide greater certainty for investors in new designs and technologies.
Key elements of the Bill include:
- new powers to enable the UK to implement the Unitary Patent Court Agreement. The Court is a central part in introducing a single patent across almost all EU countries. It is estimated that this would lead to direct benefits to business of up to £40 million per year. It is also anticipated that the London Court, which will adjudicate on pharmaceutical and life sciences patent disputes, will benefit the economy an estimated £200 million per annum.
- the introduction of criminal penalties for copying UK registered designs and the strengthening of design protection. This is already the case for copyright and trademark disputes and brings parity to this area of IP law.
- proposals for a designs opinion service and an expanded patents opinions service. This would allow design or patent rights holders, or anyone else to ask the Intellectual Property Office (IPO) to provide an expert opinion on whether a UK design or patent is valid or being infringed. This will help businesses assess the strength of their case before embarking on more formal and costly legal proceedings, and may help avoid litigation altogether.
Business Secretary, Vince Cable said:
Figures show that UK business invests nearly £16 billion in design each year, which represents 1.1% of GDP. The changes in this Bill are to help SMEs and innovative businesses get on and grow. By reforming and simplifying IP rules and making them easier to understand, we aim to help businesses protect their innovations more easily.
Minister for Intellectual Property, Lord Younger said:
The measures we are publishing to reform IP law are more evolution than revolution. Cutting red tape for SMEs, making laws easier to understand, and helping to speed up the granting of patents internationally will all help business in the UK. Our smallest businesses in particular, will benefit to protect their creative ideas and to further encourage them to grow.
One of the keys initiatives we have outlined today is the introduction of criminal sanctions for deliberate copying of registered designs. This will be a deterrent to those who deliberately copy UK registered designs and provide greater protection for our hugely important design sector.
Other measures include:
- allowing the sharing of information, between international patent offices, on unpublished patent applications to help clear existing backlogs and speed up clearance times. As a result, UK businesses who also apply for European, US and Japanese patents, in addition to a UK patents, could increase the value of their patents by £4.2million per annum.
- allowing the UK to join the Hague system. This is an international designs registration system which allows applicants to designate the countries in which they wish their design to be registered. Currently, registration for six countries, taking account of the cost of translation, notary and other fees could add up to £7,500. Through the Hague system this would cost £500 for a business.
- patent owners will have the option of marking their patented products with a web address which links to the details of the relevant patent number rather than having to put the patent numbers directly on the product in order to get maximum protection. This change will reduce the burdens on businesses and individuals who own patents, whilst also making it easier for the public to access up-to-date patent information in relation to a particular product.
- the introduction of a new exemption in the Freedom of Information Act for continuing programmes of research intended for future publication. This will provide researchers with clarity and certainty and the opportunity to validate and analyse their results before putting them into the public domain or before any related patents have been granted.
CEO of Anti Copying in Design (ACID) and Vice Chair of the Alliance for Intellectual Property, Dids Macdonald, said:
It’s great that the Government has taken a positive first step to protect designers against design copying with a proposal to introduce criminal sanctions for deliberate registered design infringement; this will encourage more designers to register their designs. However, we hope that in the future this will apply to those who rely on unregistered rights, which comprise the majority of designers in this country.
Law Society Chair, IP Working Party, Isabel Davies, said:
The Law Society IP Group is delighted that the Government recognises the value of intellectual property to the economy of the UK. Currently detailed discussions are taking place amongst all interested parties to ensure that a fair and balanced regime which fits in with pan- European legislation and protects intellectual property in the UK is included in UK and European legislation.
Notes to editors:
1.The Bill can be found at http://services.parliament.uk/bills/2013-14/intellectualproperty.html
2.The Bill delivers the remaining commitments from the Government’s response to the Hargreaves Review.
3.The World Intellectual Property Organisation estimates the total number of pending patent applications was 4.8 million in 2011, down from 5.1 million in 2010. This is based on data from 76 patent offices, which includes the top 20 offices except those of China, the Democratic People’s Republic of Korea and India (World Intellectual Property Indicators – 2012 Edition). It has been estimated that on a global scale delays in processing patents cost £7.6 billion for every extra year patents are delayed in the US, Japan and Europe, of which £6 billion is through lost innovation (London Economics report “Economic Study on Patent Backlogs and a System of Mutual Recognition”).
4.It is estimated that 81% of UK businesses have a website. The option of marking products with a web address is already available in the USA, where we understand many businesses use this ‘virtual patent marking’ option.
5.Unitary Patent Court Agreement: currently, businesses must obtain separate patents covering individual EU countries and enforce them in the national courts of each country. Decades-long negotiations have resulted in EU Regulations being adopted (December 2012) to create a single unitary patent which can be enforced in a unified patent court. Before the EU Regulations can come into effect an international agreement creating the Unified Patent Court (signed February 2013) must be ratified. The Bill is an essential first step in bringing the Unified Patent Court and the unitary patent into effect - 13 signatory states of the Agreement (including the UK) must ratify it before the agreement or the unitary patent regulations can come into force.
6.Design owners, particularly small and medium sized businesses, have told the Government that their designs are often blatantly and deliberately copied. At the moment, design infringement cases (where one design is considered too close to another) can only be dealt with through civil courts. Many businesses can’t use this route because of the cost, time and uncertainty involved.
7.59% of respondents to an IPO survey said their designs had been copied. 32% of these went on to take civil action in the courts. Of those that took no action, 91% cited expense as the reason for not doing so. Case studies provided to the IPO call for evidence suggested civil infringement actions they had been involved in had taken between 12 months to two years to complete. Costs varied with one SME citing costs of up to £50,000 for each action, with loss of business estimated in one case at between £250,000 and £750,000.
8.ACID has estimated the cost of infringement to the design industry is around 5% of the total value of design to the UK economy. Based on the most recent estimates from NESTA of £15.5bn of the value of design investment in the UK, this equates to an annual cost of infringement of £0.775bn
9.The government’s economic policy objective is to achieve ‘strong, sustainable and balanced growth that is more evenly shared across the country and between industries’. It set four ambitions in the ‘Plan for Growth’ (PDF 1.7MB), published at Budget 2011:
- to create the most competitive tax system in the G20
- to make the UK the best place in Europe to start, finance and grow a business
- to encourage investment and exports as a route to a more balanced economy
- to create a more educated workforce that is the most flexible in Europe.
Work is underway across government to achieve these ambitions, including progress on more than 250 measures as part of the Growth Review. Developing an Industrial Strategy gives new impetus to this work by providing businesses, investors and the public with more clarity about the long-term direction in which the government wants the economy to travel.