Correspondence

IP Insight: August 2014

Published 28 August 2014

1. Re-engineering a triumphant heritage

Here’s a question for you: what was the key star in a hit Hollywood movie that the British Board of Film Censors banned for 14 years?

While you’re working out the answer, we’ll talk motorcycles. There is now an electric motorcycle that can, it is said, hold a top speed of 120mph for as far as 125 miles. There’s another which can apparently take you from 0 to 60mph in 3.3 seconds with barely more than a little whine.

Some say that, within ten years, these electric machines will be dominant. And those who find it a little difficult to stay asleep as some insomniac rider puts their foot down in a night-time side street, might think that a better deal. Not so the enthusiasts, that is to say those who can answer straight off our opening question. For them, the bike with the smell of hot oil, pulsing power, eager vibration and more than a tad of noise, is still the one they want.

Judging by what is out there, they need have no fear of going unrequited. Radically new ideas in design seem to appear every week as a handful of big manufacturers, test out the market for dominance alongside a wide range of smaller firms pushing hard at the frontiers of design and excellence. And yet, at the same time, some among them have brand names that resonate across the decades, heritage combining with technology.

If you are not an enthusiast, you will not know that the model claiming to be the longest in continuous production is the Royal Enfield Bullet. Sounds British? True. It first came off a production line in 1948 in Redditch. But, unfortunately for the patriots, the production line that is still on the go is now in Chennai, India. The noise is reportedly the same, that thump-thump-thump of the bikes our grandparents rode (if you never hear one near you, try watching those scenes from an old Pinewood Studios film as one of ‘the few’ goes pottering off to the village pub after a day fighting Messerschmitts in the skies). It’s just that the factory has moved to the other side of the world.

So what about one that has not? The first Triumph motorcycle was built in 1902. Its trade mark name – Triumph with a downward curving swoosh linking the second and last letters – first appeared many decades ago. The company had been set up in 1887 by Siegfried Bettmann, a German, born in the city Nuremburg. Perhaps inspired by his own difficulties in getting going, in 1914 he started the Ann Bettmann Foundation to give grants to young people in the Coventry area needing a helping hand in starting a business.

The foundation is going still. The company did not do so well and Bettmann had to sell it in 1936. The Coventry Blitz flattened the factory and a new one was built in nearby Meriden. There production was finally in the hands of a workers’ cooperative that folded in 1983.

Today, Triumph is a private company, owned by John Bloor though his Bloor Holdings Limited, a house building firm he set up in 1969. Son of a Derbyshire miner, Bloor started his working life as a plasterer, but built his first full house before he was 20 and soon was building houses by the hundred.

He bought the rights to the Triumph name and designs in 1983 and in 1991, after spending £80 million on the project and licensing out limited production to keep the continuity, he opened a new factory in Hinkley, Leicestershire. Today it is an ultra-modern facility with the company also running two assembly plants in Thailand and developing ones in India and Brazil.

Like everything in the world of big bikes, this is a story surrounded by superlatives. The turn around from the collapse in 1983 to the success today is striking. The company is now the biggest British-owned automotive manufacturer. Hinkley turns out some 50,000 machines a year with 85% of its output sold outside the UK. Triumph is, it can claim, ‘currently the fastest growing motorcycle brand in the world’. One of its machines won a Tourist Trophy race on the Isle of Man this year at 124mph and, after a 40 year break, Triumph was back at the number spot at Daytona in the USA. England may have failed at the World Cup, but Triumph bikes have made a good impression in the Brazilian market over the last two years.

Illustration: The company has various versions of its iconic trade mark registered either singly or as a group. Among the successive versions of the mark are:

Trumph motors trade marks

Even so things are not going to be easy for the company over the next decade. Nick Bloor, Triumph CEO since 2010, says it is ‘a difficult motorcycle landscape’ – not his description of the Brazilian Amazonia through which David Beckham recently took a off-road version of the Triumph Bonneville (yes, the model ridden by Steve McQueen), but rather of the sharp competition in the world bike market. The winner of the all-electric Isle of Man Tourist Trophy scored a speed only 7mph slower than the Triumph achieved in its race. For the moment in the dealers’ showrooms, however, the names of the electric bikes don’t create the noise, the echoes in your mind, that are triggered by the downward swoosh of Triumph. Nick Bloor knows its value: ‘The strength of Triumph is the long heritage that gives us lots to draw on and we’ve taken the best of what there’s been across the company’s 110 year history.’

The history, and the identity it has nurtured, help customers feel part of the thing they are buying. As Nick Bloor puts it, the Hinckley team aims to continue ‘the successful evolution of our heritage’. The heritage is adding a marketing cutting-edge to the modern technology and design that Triumph is investing heavily in: the company puts something like £1 in every 14 it spends into research and development.

In keeping with the company tradition of helping those just starting out that Bettmann put in place, Triumph are now opening up their first Triumph Design Awards for Sixth form and college students. The aim is to encourage the design engineers of the future to test their skills against briefs created by the company. Interested candidates can register at Triumph Design Awards. The winners will be announced in the autumn of 2015. Among them could be the designers who engineer the Triumph bikes of the future.

The answer to our question? It was, of course, a Triumph Thunderbird 6T, the bike used by Marlon Brando in The Wild One.

For more on the bikes, the history and links to company publications go to Triumph Motorcycles.

2. China IPR considerations for European businesses in the ICT industries: part 1

China’s intellectual property rights (IPR) protection system is expanding and improving, but it remains vastly different from the European system. Accordingly, to be successful in China your business must take preventative measures to protect your intellectual property rights - one must obtain valid IPR rights in China as a minimum first step. In other words, the protection of IPR rights should be a key part of your business strategy, whether entering or expanding operations in China.

While some IPR issues are common to all types of European companies doing business in China, others are specific to the ICT industries. In the first of a two-part article the China IPR SME Helpdesk discusses appropriate patent and trade secret strategies, and the type of patents particularly relevant to ICT companies.

Developing a patent and trade secret strategy for China

Patent protection

China has three types of patents: invention, utility model, and design patents. For a hardware invention, all three should be considered because each can protect your product in different ways.

An invention patent has a term of twenty years and should be used to protect important inventions which have a relatively long life. On the other hand, the life of a utility model patent is only ten years. Because the novelty threshold for utility model patents is lower than that for invention patents, utility model patents are especially suitable for incremental inventions and technologies with a shorter life span.

A software invention is more suitable for protection under an invention patent. The Chinese patentability standards for software inventions are similar to those in Europe, therefore a software invention that is patentable in Europe generally should be patentable in China, though the patents must also be registered in China.

Trade secret protection

Trade secrets are complementary, yet equally valuable, intellectual property. However, due to the fact that they are not registrable rights, the protection strategy is different.

Trade secrets can include a myriad of technologies, including source codes (to the extent that they cannot be reverse engineered). Trade secrets can also include operational information, such as processes and methods; or other information, such as marketing strategies and customer lists, so long as they meet all of the above requirements.

A trade secret is defined as:

1. Technical and business information that is unknown to the public.
2. Which has economic value and practical utility.
3. For which the trade secret owner has undertaken (demonstrable) measures to maintain its confidentiality.

Although trade secrets can be protected by a confidentiality agreement, like in Europe, it is also recommended to have recipients of confidential information sign an acknowledgement prior to receiving it. If it later becomes necessary to file a misappropriation action, a trade secret owner must prove by admissible evidence that the trade secret meets the above requirements, in addition to proving there is misappropriation of the trade secret by a wrongdoer or a third party.

In the case of trade secrets, prevention is the best medicine. Although companies that take enforcement actions can and have received positive outcomes from Chinese courts.

FRAND: Interface of standards and patents

While in the past it was a viable strategy to obtain patents on industry standards, recent developments in the law on Standard Essential Patents (SEPs) have changed this. A standard essential patent generally refers to a patent that defines an invention that must be used to comply with a technical standard.

Standards for different industries are set by regional organisations, such as The European Telecommunications Standards Institute (ETSI), which amongst other standards covers wireless communications. Due to inter-operability requirements on this technology, certain ETSI standards are adopted in China.

ETSI generally does not determine whether a particular patent is essential to a standard. Rather, it typically provides some mechanism by which the patent owner itself can make a declaration of essentiality, coupled with a commitment to license any SEPs on Fair, Reasonable, and Non-Discriminatory (FRAND) terms and conditions. Therefore, where a European patent is declared by the patent owner as essential to an ETSI standard, the Chinese patent corresponding to the European patent is also considered as essential in China, so FRAND terms and conditions also apply.

If a patentee engages in standard-setting or agrees that a patent be incorporated into a national, industrial, or local standard, it permits others to exploit it for purposes of implementing the standard. Those using the patented technology to implement the standard may be charged royalties by the patentee for use of the patent, but are not deemed to be committing an infringement.

SEPs versus implementation patents

Implementation patents refer to patents that are not incorporated into a standard but facilitate the implementation of the standard. For example, a patent on a new form of touch-screen glass is not essential to the 5G wireless standard, however, if the innovation was considered superior to the extent that all 5G phones incorporated it, such a patent would be invaluable.

As implementation patents are not incorporated into standards they are not subject to FRAND obligations, so normal infringement damages and injunctive relief are available. Therefore, due to the lower royalties available because of FRAND conditions, implementation Patents will often be more valuable to your business.

Take-away messages

1. Software inventions can be protected in China similar to as in Europe.
2. Utility model patents can fulfil important roles in your Chinese patent portfolio.
3. Implementation patents are much more valuable than standard essential patents.
4. Trade secrets protection should be complimented by additional confidentiality measures that require signed acknowledgements.
5. IP enforcement in China is improving, though cumbersome evidence rules make it difficult.

Next time in part 2, the Helpdesk will take a look at IPR enforcement in the ICT industries.For more detailed information on the topic, please see the guide to China IPR Considerations for the European businesses in the ICT industries and this available through the China IPR Helpdesk.

The China IPR SME Helpdesk is a European Union co-funded project that provides free, practical, business advice relating to China IPR to European SMEs. To learn about any aspect of intellectual property rights in China, visit our online portal. For free expert advice on China IPR for your business, email your questions to question@china-iprhelpdesk.eu. You will receive a reply from one of the Helpdesk experts within seven working days. The China IPR SME Helpdesk is jointly implemented by DEVELOPMENT Solutions and the European Union Chamber of Commerce in China.

3. Protecting the IP on your website

Why you should be concerned to protect your content

Every website contains a great deal of intellectual property. Product descriptions, visitor messages, images, and even page layout designs are all IP. And there is usually much greater value to the IP on a website than realised - just imagine the cost and time that you would need to spend writing the text and designing the site if you had to start from scratch.

Web URL address

Many types of intellectual property can be registered to record who the owner is. But the majority of IP on a website is not registrable and so is only protected by copyright.

The catch 22 for site owners is that while a main reason for a website to exist is to broadcast the content on it to as wide an audience as possible, protecting that valuable content from being copied and used by someone else is very difficult.

Your website terms and conditions are your first line of defence

Your copyright exists whether or not you have website terms and conditions and whether or not a visitor accepts them. But having good T&C - ones that include terms relating to ownership and use of IP - will help you in several ways.

Making it clear that you are the copyright holder is likely to make more visitors aware that they should not copy. If someone wants to make something on your site available on theirs, but is not sure whether copyright exists and whether copying is possible, setting out a policy in your terms will help that person act as you want. Showing that you take your copyright seriously will dissuade others from copying.

Or you may want your terms to create a licence - to use your content or perhaps even to use content placed onto your site by others. For example, you might run a site that connects sellers with buyers. You might want to be able to use product photos posted by sellers on other parts of your site. You could write your terms to give you the right to do so.

Bear in mind that T&C aren’t legally binding until the visitor accepts them. Before acceptance, they should be considered as guidelines for use. Having terms visible to everyone should reduce the possibility of accidental infringement, and make resolving problems easier. After acceptance, you will have stronger legal recourse in case of breach of contract.

Don’t copy the terms and conditions of another site

You should write your own website T&C, and not copy those of a competitor. Not only is copying likely to be a copyright infringement in itself, but your website and business will be different and the terms that suit another site might not suit yours. They also might be missing something that gives you better protection. Our advice is always to start from scratch using a good quality template, or ask a solicitor who specialises in website T&C to help.

After having put T&C in place, the next thing to do is to make sure that IP with a high value can only be accessed by visitors who have agreed to your T&C. Breach of contract is (to some extent) easier to pursue than copyright infringement.

Changing who accesses what content may require a reorganisation of the content itself, or it may be necessary to bring forward the request to agree your T&C from a pay point to some earlier stage.

Be careful not to leave the drawbridge down when following other laws. For example, The Consumer Contracts (Information, Cancellation and Additional Payments) Regulations require that you give your consumer or client all the information he or she needs including information specified in the Regulations. The Regulations do not require you to give away information unrelated the proposed transaction. So, when you set out the strategies and procedures to comply with the Regulations, be careful to avoid giving away intellectual property.

Terms and conditions are limited in the protection they give you

It is important to realise that website T&C are not a silver bullet to prevent copyright infringement. You need constantly to watch for breaches and act quickly. If you allow someone to use your copyright for years, you will find little sympathy from the judge when you change your mind and seek to protect it. If you believe that your copyright has been infringed, there are steps you can take.

Gather evidence

Take screenshots of your website and of the one that is infringing.

Use tools such as reverse image searches and duplicate page checkers to establish a case that your IP probably has been infringed (they can also be used as a monitoring tool).

If your IP is distinct, or you have incorporated a type of watermark, your job will be much easier. You can also check third party archiving tools such as the Wayback Machine, which will help you establish that the content existed on your site before any others.

Contact the owner of the site directly

Most infringements are accidental. A simple and non-confrontational email message asking for the content to be removed or attributed to you, with the attached evidence is usually sufficient.

Contact the website host

If the owner of the site is not cooperative, you should contact the ISP or host of the website. You can find out who hosts a site by running a ‘whois’ lookup. There are many websites that offer this service for free. Again, a simple email, polite and to the point that asks for action is usually effective.

Consider stronger actions

Avoid court action. If you issue a claim in court, and the case is clear cut, your opponent is likely to settle. However, to take someone to court in the United Kingdom for a value of less than tens of thousands of pounds is rarely worth it. If your opponent is in another country, it will be far more expensive still.

The Internet does give another solution. You may be able to embarrass an opponent to stop using your IP. You can’t be certain of success, and it may not be an appropriate tactic for every business or every circumstance. But make no mistake; people refer constantly to social media sites, reviews, testimonials, experts and friends. What is more, the Internet is instantly effective. You may get a fast response. If you do make the dispute public, remember that how you handle it will also be recorded indefinitely and judged by your visitors and customers. You can hurt your reputation as well as the other party’s.

In summary

Protecting your IP is about credibility. You are most likely to succeed if your website T&C are sensible, easily understood - and tough. If you look formidable, people will avoid crossing your path. But it is also about taking the right action early on. With awareness of the value of your IP, good T&C and regular monitoring, the time and effort you spend building your site should be protected.

About the author - Thomas Taylor - Net Lawman

An accountant by profession, Thomas has a particularly varied role at Net Lawman, which includes IP protection. It never fails to amaze him how many other sites copy content or products. His favourite case is that of a competitor law firm copying multiple pages of content verbatim, including ironically, the terms of use for copying content.

If do require additional information please contact thomas@netlawman.co.ukr.

4. Goldgenie case study

From an early age, it was clear to see that Laban Roomes had an entrepreneurial flair. Having come from a working class background, he was always thinking of weird and wonderful ways to earn extra money and support his family. By the age of 19, Laban had established a decent business importing and exporting cars and had paid off his parent’s mortgage – a great achievement at such a young age. Unfortunately, unforeseen circumstances later lead to the collapse of the business leaving Laban homeless, with only £80 to his name.

Laban Roomes

Determined to be successful, Laban got straight back on the horse, researching different industries before deciding to pursue an idea that had intrigued him during a visit to the U.S. After working tirelessly for months, Laban designed and manufactured an innovative gold-plating process and in 1995 the Goldgenie business was launched.

Laban’s first clients were some of the leading car manufacturers such as Bentley and Rolls Royce who used Goldgenie for adding luxurious and bespoke details to their vehicles. As the business grew in strength, Laban expanded the range to include mobile phones, mp3 players, jewellery and sportswear amongst other items.

In order to protect his work from copycats, Laban made the decision to register his intellectual property. Goldgenie are currently the owners of several design rights and the company name and logo is protected by a registered trade mark which is covered across Europe and pending in Australia and the U.S.

Protecting his IP gave Laban the confidence to branch out into other areas and he launched an international franchise (the granting of rights to an individual or group, to market a company’s goods or services within a certain area) permitting the franchisee to manage the Goldgenie brand and make a profit from any sales generated.

Whilst the franchise scheme brings in extra revenue for the company and helps to grow the brand globally, there are added risks in allowing others to sell goods using your brand. However, Laban is assured that his trade mark is protected under the necessary classifications .

Goldgenie are covered in the areas of gold-plating, jewellery and luxury gifts and gold solution which covers our niche market beautifully and protects us in these activities.

In addition to this protection, Laban believes that registering his IP rights has also made his business more credible.

It has made us more respected in the eyes of our customers and potential investors.

At present, Goldgenie are continuing to expand the franchise network and their work is being recognised internationally. Laban’s products were distributed at the 2006 Emmy Awards and his work has been championed by James Caan of the Dragons’ Den and Simon Woodruffe, founder of Yo! Sushi! He has also won awards at the Great British Entrepreneur Awards 2013 and at the FSB London Business Awards 2013.

After working so hard to establish the Goldgenie business, Laban recognises the importance of protecting his IP and the impact it would have if someone were to infringe his work.

It would be awful to know after all the hard work I have put into the company that someone could take away all the hard work over night and cause problems for us to expand into a particular country – business means a lot to me as it has enabled me to give to my loved ones and provide a great life for my family.

Laban is now using his knowledge to mentor young entrepreneurs and new businesses. When asked what advice he would give to those thinking of protecting their IP, Laban urged them to act quickly.

Don’t hesitate; it may be one of the best investment and business decisions you ever make.

IP Equip

To find out more about the potential IP in your business, take a look at IP Equip. This is a free online training tool to help you gain more knowledge about IP and to understand the impact it could have on your business. IP Equip is part of ‘IP for Business’, a free online range of business support tools designed to help you better understand, protect and exploit your IP assets.

5. IP as a business asset

Business assets may be broadly divided into two categories: physical assets - including buildings, machinery, financial assets and infrastructure - and intangible assets - ranging from human capital and know-how to ideas, brands, designs and other intangible fruits of a company’s creative and innovative capacity.

Traditionally, physical assets have been responsible for the bulk of the value of a company, and were considered to be largely responsible for determining the competitiveness of an enterprise in the market place. In recent years however, the situation has changed significantly. Increasingly, and largely as a result of the information technologies revolution and the growth of the service economy, companies are realizing that intangible assets are often becoming more valuable than their physical assets.

It is crucial therefore that all business’s, no matter how large or small make sure that they manage all their assets correctly. Knowing and identifying what a business owns and building up an IP portfolio, so evidence can be provided to prove ownership is essential.

What would happen if a competitor used the trading name of your business or a similar domain name? What would happen if an ex-employee used trade secrets of your business? What are the key assets of your business – its people, its innovations, its trade marks, its know-how and goodwill? Who generates copyright material for your business, its website, promotional materials, logos and the like? How do you protect the confidential information of your business? Do you even know what intellectual property your business owns?

One of the biggest mistakes made by businesses is not educating their employees about IP. While the management and engineers of a company are the most important groups to keep educated on IP, other groups of people (eg technicians, sales staff) need to be educated also.

In addition to educating employees about what intellectual property is, they should also be familiar with how to identify situations that are specifically related to IP such as the creation of a new product, the suggestion of an improvement to a product by a customer or a potential infringement situation. If employees are not fully-educated on IP, numerous IP rights are lost and expensive mistakes can be made. For example, failure of employees to understand that a new improvement to a product would be patentable can result in the loss of foreign and domestic patent rights by the time the mistake is realised.

To help businesses understand and improve their knowledge of IP we have launched a set of new support tools to help small firms identify, protect and grow their IP assets.

The IP for Business tool set makes sure firms can tap into up-to-date guidance to help manage their IP. It also helps firms get more relevant advice from their accountants and other business advisers.

At the centre of the toolkit is IP Equip - a new, free interactive online training tool that helps businesses and their advisors to identify assets which may be protected by IP rights and think through the strategy for protecting them.

The Continuing Personal Development (CPD) accredited course contains 4 short modules of basic IP advice on those assets and also provides links to more detailed information and professional services. The whole tool will take around one hour to complete and results in one CPD point.

On completing each of the 4 short modules you will gain access to a library of resources including consultancy checklists and business guides.

Start your training now. You can save your progress at any time.

6. Your questions answered

Are there any guides available on the Copyright law changes?

Yes, the copyright exceptions for private copying for personal use, quotation and parody were approved by Parliament on 29 July 2014. These regulations will come into force on 1 October 2014 and introduce exceptions to copyright for:

• personal copying for private use
• parody, caricature and pastiche and
• quotation

We’ve produced some guides to what the package of exceptions means for consumers.