Correspondence

IP Insight: June 2014

Published 26 June 2014

1. We’re moving!

You’ve probably noticed that IP Insight has a slightly different look and feel to last month’s edition, that’s because we have already moved over to the GOV.UK website.

Why the change? Well our whole website is migrating to GOV.UK. over the next few months as part of a major change management project across government.

The GOV.UK domain is well established, with all major government departments already under its umbrella. The move is part of the Government’s Digital Strategy aimed at making information and public services online simpler, clearer and faster.

We have already started to move content from our current website to the IPO area on GOV.UK. Over the next few weeks, you may see similar information on our existing site as well as on GOV.UK. Until we ‘flick the switch’ and our existing URLs (web links) take you to our site on GOV.UK, our current website and services will remain and continue to provide you with the same high standard of service. Once the transfer takes place, bookmarks that you have created previously will direct you to the appropriate place on GOV.UK to access your content.

Following the website transition, the look and feel of our pages will change to reflect that of the GOV.UK site. We will take the opportunity to review our content to make sure it remains relevant to our customers. We will continue to have an area of the new website dedicated to professional users, and the services and information they need. We will also make sure that we continue to use language that meets the needs of our customers, whether they are professional intermediaries, organisations or individuals new to the world of Intellectual Property.

We understand the importance of our website, and the information and services it provides to our customers. The move is an opportunity for us to sharpen and refresh elements, losing none of the valued services it currently provides or control of the detailed content, whilst becoming part of the wider government digital community.

We are working very closely with the Government Digital Service to seek customer input and make sure we have a smooth transition across to GOV.UK and we will be providing more detailed updates as the work progresses.

If you have any further questions not addressed here, please email websitetransitionteam@ipo.gov.uk.

2. Andy Palmer - the car guy

Andy Palmer joined the UK car industry just as it was hitting the buffers in 1979. Now he’s Nissan Motor Corporation’s Chief Planning Officer and Executive Vice President. He is responsible for guiding a global automotive giant at time when the pace of change is electric. Just how an apprentice from the Midlands found his way to the top, and what he discovered en-route, is a story all innovators should read.

Andy Palmer - Chief Planning Officer and Executive Vice President at Nissan Motor Corporation

Andy Palmer is Chief Planning Officer and Executive Vice President at Nissan Motor Corporation

Nissan and Sunderland - the global local

We’re used to the expression ‘peak oil’, but what about ‘peak car’? We reached this in the UK in 1972 – that was the year when a record 1.9 million automobiles were made in Britain, the year of Ziggy Stardust.. Rock bottom was hit in 2009 when the UK manufactured under one million cars and scrappage schemes were introduced to keep production lines rolling.

Since 2009 the outlook for the UK car industry has transformed. Last year 1.5 million units were shifted and forecasts suggest that the 1972 total will be exceeded by 2017. Almost half of UK made cars are exported to EU countries and a further 20 percent are consumed by Russia and China. British manufacturing is being reborn and the car industry, a litmus test for economic health, is cranking into top gear.

Sunderland

Nissan is not a British company. Back in 1972, Japanese car makers were viewed as threats to the old order - not partners. But in 1984, faced with the obliteration of almost all of the North East’s heavy industries, work began at a greenfield site in Washington, just outside Sunderland. It became Nissan’s manufacturing hub, the most efficient car plant in Europe. By 1992 Sunderland was constructing its own cars and its new model, the Nissan Micra became a classic, cementing the plant’s reputation as a centre for manufacturing excellence and establishing Nissan’s workforce as a world class team. Subsequently, the Qashqai became the first car produced by a Japanese company to be exported from Britain to Japan.

Today, over 7,000 people work at Nissan’s Sunderland plant. For the second year running it produced over 500,000 cars. It is Britain’s biggest, most productive car plant.

The electric Nissan LEAF and the Nissan Note combined with the forthcoming Nissan Infiniti, demonstrate Nissan’s commitment to continue to drive change forward. Nissan in the UK is not just about assembling cars. Its research and design teams in Cranfield and London are taking up the challenges of the electric era. Its patent, designs and trade marks are guarded with as much zeal as any competitive car manufacturer. As the automotive industries race for pole position, it is estimated that 40,000 jobs across the UK exist because of the success of Sunderland. Nissan has invested over £3.5 billion in car making in the UK.

Andy Palmer - back story

I think, when you leave school as I did when I was 16 years old, you have firm but not fully developed views about the world. At that time all I knew was that I wanted to be a car guy…and I still do,

says Andy.

In the year The Ruts released ‘Babylon’s Burning’, a sixteen year old apprentice with a penchant for punk rock took up work at for UK Automotive Products, manufacturing parts for the car industry.

1979 in the UK was a really interesting time because it was the time of British Leyland and it was an era of social change. You may remember the wildcat strikes and the simply untenable relationship that existed between management and unions at that time. That’s the environment in which I cut my teeth. I was a member of the British (TASS) union working on the shop floor and listening to both sides of the stories.

In a way, the strife Andy walked into in early 1980’s enabled him to formulate his own positive approach to management. Conflict is undesirable but friction caused by productive creative processes is desirable - the trick Andy learned was to differentiate between the two.

There is one lesson that I have taken with me throughout my career. It relates to inevitably dealing with conflict management,

says Andy.

Allowing conflict to elevate and not to be addressed properly and promptly, is not useful for either party. Tensions in any company can be useful for extracting the best of the company, but conflict is destructive.

Nissan and Palmer

By 1991 Palmer had become chief engineer of manual transmissions for the Rover group. These were troubled times for Rover and in the mid-nineties it was sold to BMW and by the beginning of this century a great British brand had ceased to exist.

But Andy Palmer was still here. He joined Nissan where he became General Manager of Vehicle Design Nissan Technical Centre Europe Ltd. Nissan spotted his potential and he realised theirs. A doctorate and career spent developing many of Nissan’s top models later, and Andy Palmer is now Nissan Motor Corporation’s Chief Planning Officer and Executive Vice President. Today he’s no longer an engineer or a designer, he’s a motivator. Nissan’s shop floor philosophy – that everyone should be expert in at least three distinct skills - holds true, even at the top. Palmer’s rise from the inauspicious lines of car part manufacturing in late seventies Britain to the top of one of the most dynamic global motor manufacturers the world has ever known proves two things.

If you’re a good innovator you don’t necessarily need to stay in school.

If you’re an innovative organisation you’ll be smart enough to develop talent.

My early years (working on very early dual-clutch automatic transmissions) taught me both the value of innovation, but also of its commercialisation. I learned that profit is not a bad word. It is the best measurement of customer satisfaction.

Nissan and Andy got on well – perhaps this is why there has never been a strike at Nissan’s Sunderland plant.

One of the key roles of management is the motivation of staff. If an employee is turning to a third party for counsel and advice, it normally means that there is a failure in the management process. From my experience it’s always better if management can do its job to maximize shareholder return AND at the same time ensure that its work force is motivated. This yields better quality and better profits and is not at all mutually exclusive.

Driven by driving

Palmer describes Nissan’s attitude to innovation as ‘a relentless focus on excellence.’ And he’s not just thinking about building cars - Andy’s interested in ‘redefining the future of transportation’. To do this Nissan has evolved a holistic attitude to innovation – it is never someone else’s problem. Palmer’s experience, from production line, to product development through the management of the UK’s biggest car manufacturer, to taking his place in a global operation, emphasises the need to embrace change and communicate brilliantly.

Andy Palmer’s top tips for innovative success

Number crunching for long hall innovation

For Andy, the end of the gas guzzler provides new opportunities to lead the market.

We looked at Gen Y and Z future car buyers, knowing their education process generally demonized the (polluting) car, its emission of CO2 and therefore the impact on global warming trend. We watch the increasing concern about clean air in the cities, knowing the explosive population growth and the migration of 70% of the world’s populous to cities by 2050. We watch the increasing purchasing power of the so called middle classes in emerging nations and the inevitable increase of annual car purchase from 84 million per year today to 200 million by 2050. It’s clear that the planet cannot sustain the combination of these trends and that an innovation is necessary. That drove us to invent the all-electric Nissan LEAF - data combined with empathy for tomorrow’s customer.

Andy is not a dewy-eyed, floppy hat type. Numbers matter to him - they can break the bank and the issue is clear - if we’re to keep driving we must cut carbon emissions. Because it is all electric - Nissan’s LEAF is actually powered by windmills.

Data specific analysis when developing a new technology or a new car is vital. For example, when we look at Nissan’s 100% electric car, the LEAF, we spent €4 billion in the development of that technology. That’s a pretty big entry ticket. The backdrop to that development was an innovative or an ‘out of the box’ thinking process.

Continuous

Innovation is both a process and a philosophy. Without a constant desire to change and innovate, no matter how keen the workforce is, business will suffer. ‘Kaizen’, is central to the Sunderland’s plant’s philosophy, it means ‘continuous change’ and teams working in all parts of the production process practice it, no alteration is too small and no concept is too big.

Change and an appreciation of its inevitability, indeed, its necessity is central to all creative processes. Nissan’s ability to conceptualise new models and then bring them into the market, on budget without alienating its ‘audience’ demonstrates an understanding of a fundamental value that perhaps, UK manufacturers forgot, around about 1972. Not changing – is unnatural. There is no future in staying the same.

Feel balancing

Now Andy’s aim is not so much to innovate and invent new products himself - is to sustain an environment in which other people can. It’s a balancing act: counterpointing the desires of engineers to get on with the job with the needs of consumers who may not actually know what they want. Put like this it’s very easy to see how the wrong thing, say a brown Austin Allegro with a square steering wheel, can end up in front of the wrong consumer, say for example 16 year old punk rock fan, Andy Palmer. Andy learned early on how to avoid this kind of mistake.

I’m privileged to have come from an engineering background which by its nature is governed by the law of physics and mathematics,

says Andy.

Engineers by our nature have to think logically. In general, we follow the normal process of evolution, which is to design, test, fail, resolve, design, test, confirm. Within this cycle, we challenge the boundaries of our discipline. However, we have to recognize that we are not always representative of the general customer and our ideas may not always have real commercial value. I have also worked in and led many areas of product creation, product planning, product management, marketing and sales, where one needs to consider customer points of view, and, more importantly, the latent and future needs of the customer.

Innovation and Excitement

Perhaps it isn’t entirely fanciful to elements of Eastern philosophy in Andy’s thinking. Science, logic, numbers and statistics are balanced with a consumer’s rationale: emotion and desire cannot be expressed without poetry.

It’s not just a question of looking at what customers are missing today but also anticipating what they will miss in the future,

says Andy.

For me, this is the key to commercial success of innovation; what we define in Nissan as our brand positioning statement - Innovation and Excitement for Everyone. It is a science but it’s an inexact science requiring both data but also a level of empathy for the customer.’

Creative chaos

The technical challenges associated with creating an infrastructure whereby motorists can charge up their cars, let alone the specifications of the cars themselves are huge. Andy his team actively plan for a period of not knowing, something many managers fear.

Having identified the latent need, turning that to reality and making an affordable electric car for today required us to engender a culture of creative chaos combined with development rigour. This, of course is difficult, but marks Nissan out as an innovative force to be reckoned with and will drive forward our brand. I think there is no better case than the Nissan LEAF. We have already sold over 110,000 units with 95 percent customer satisfaction, the highest in Nissan in spite of its radical technology. And moving forward, we are keeping our outside-the-box thinking for future concepts like BladeGlider and technologies like Autonomous Drive.

The science and art of storytelling

For Nissan the rise in world’s population, the rise in living standards, the emergence of new markets and the development of technologies that don’t harm the environment is a challenge which the Nissan UK’s Sunderland plant is well positioned to face. It already exports 80 percent of its vehicles, it is the most productive car plant in Europe, the UK’s largest car plant and it is focussed on a very big picture indeed. The Sunderland plant, tucked away in the North East of England, is a zen like presence on the world stage. As Andy Palmer says –

our success depends on the strength of our brand story and our ability to communicate it. In Japan, they talk about Kotosukuri, it means the science of storytelling. This is the key to unlocking our potential.

In Sunderland, whilst you were reading this feature, three Nissans were made.

For statistics on the UK car industry visit the Society of Motor Manufacturers and Traders (SMMT) website.

3. IPR protection in China for the Textile Industry - part 1

China’s textile industry is both an opportunity and threat to foreign businesses. It is a major market for those supplying production technologies and a key supply base for textiles and finished goods. However, foreign technologies and brands that are not adequately protected often fall victim to infringement by Chinese competitors.

This two-part article addresses IP issues across subsectors of the textile industry, including textile machinery, yarns and specialty fabrics, finished fabrics, and brand apparel & accessories. In this first part, trade marks and patents are addressed. The second part to follow next month will address copyrights, transfer of technology and trade secrets.

Trade mark protection for textile machinery, yarns and finished fabrics

Trade marks provide protection against use of identical or similar marks on similar goods. China uses the ‘first-to-file’ system, meaning that companies may not have legal protection in China and take the risk of infringing others’ trade mark if the same or similar mark has already been registered in China by someone else. It currently takes up to 18 months to register a trade mark in China, provided no opposition is filed upon publication.

As China uses the ‘first-to-file’ system, it is common for unscrupulous parties to register other’s trade marks first. It can be a difficult and expensive process to cancel, oppose or buy back a trade mark that has already been registered. It is not uncommon that import agents or distributors register trade marks on behalf of the principal. It is recommended that the trade mark is either registered in the name of the principal or transferred back to the principal to avoid later disputes.

In addition to registering the trade mark in the original language, it is advisable to register a distinctive Chinese language trade mark, even if this is not the primary mark used. Without a well-promoted Chinese mark, the market may create a Chinese nickname for a product, and this nickname may be registered by unscrupulous parties to exploit the reputation of your brand.

Trade mark infringement can be dealt with through administrative action by the Administration for Industry and Commerce (AIC) or through civil proceedings in the People’s Courts. There are also criminal sanctions for trade mark infringement, although this only applies if the trade mark is exactly copied or if the scale of the infringement is large.

Although it is uncommon to find completely counterfeit machinery, replacement parts may be copied. If your company’s spare parts or packaging bearing your trade mark, it is important to register this trade mark in China as soon as possible.

There is no national trade name registry in China. Trade names are registered locally, within districts. It is not uncommon to find distributors or agents providing maintenance services for branded machinery or equipment and using the brand as a registered trade name without authorisation. Trade names that conflict with prior trade marks can be cancelled. Trade marks should be registered even if you are manufacturing but not selling in China.

Trade marks should be registered even if you are manufacturing but not selling in China. China is a first-to-file jurisdiction; therefore, producers of yarns and fabrics who own valuable brand names are recommended to register names and/or logos as trade marks in China as soon as possible to protect your trade mark. The process of cancelling, opposing or buying back your trade mark is often a more difficult and costlier than simply registering your trade mark.

A distinctive fabric design may be protected as a trade mark if it has become distinctive through long use (for example, the ‘Burberry’ check design is a registered trade mark in China). However, such examples are rare and protection of patterns as a trade mark is uncommon.

Patent protection for textile machinery, yarns and finished fabrics

Patents must be registered in China; a patent registered overseas is not enforceable in China. Patents may be filed directly in China or through the Patent Cooperation Treaty system. It takes approximately 24-36 months for an invention patent application to be examined and up to five years to be granted.

In addition to patents for inventions, China recognises utility model and design patents. These types of patents do not undergo a substantial examination, and as long as they are filed in the correct form, they are issued automatically. Utility models cover minor innovations, which may not be sufficiently inventive to receive invention patent protection. They are usually granted within 12 months of application and last for ten years.

Design patents cover the exterior, ornamental design of products. Like utility models, they are also granted within eight to ten months and last for ten years. It should be noted that the process of protecting designs in China is different from that of Europe, where designs are covered by design rights. In China, designs are best protected by design patents and in some cases, by copyrights.

Patents are only valid in the countries that they are registered in, and only patents registered in China are enforceable. Companies that manufacture textile machinery apply for patent protection in China not only because China is a market to sell machinery but also to defend against potential infringers who manufacture infringed technology that is exported to other markets.

Competitors often copy the design and shape of the machinery and its components and mislead customers to believe that the machinery has the same functions or quality as the original, often resulting in losses in sales for the original European manufacturer.

Producers of speciality yarns and fabrics should ensure that any patents obtained for their products are also filed in China to defend against Chinese competitors who may copy the technology and export it to other countries.

To defend against the copying of an entire finished product, producers may carry out different processes in different locations to reduce the possibility of the whole process being disclosed. Furthermore, suppliers of yarns and specialty fabrics should ensure that their license contract terms are clear when determining the use of trade marks and patents by end-users, and be vigilant against infringement by competing suppliers and end-users of branded textiles who may falsely claim that their products incorporate the branded materials.

The pattern of apparels can be protected through design patents. Since 1 October 2009, the Chinese Patent Law has enabled designers to register two or more similar designs (up to ten) for the same product within one application. However, these applications are not available for different designs, making them unfeasible for designers that have a very large turnover of new designs. Furthermore, design patent applications may take 8-12 months to be granted protection, which is often too long to protect fast-moving seasonal designs. The advantage of a design patent is that it is relatively easy to enforce, and simply owning a design patent may be enough to deter others from infringing your designs.

If there can only be one message to take away from the advice on trade marks and copyrights given here, it is to be prepared and pre-emptive: even if a company does not sell its goods in China the threat of infringement still exists, so it pays to be proactive in protecting intellectual property – know before you go!

Check the next issue for part 2 of ‘IPR protection in China for the Textile Industry’, which will address copyrights, transfer of technology and trade secrets.

The China IPR SME Helpdesk is a European Commission 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.

China IPR SME Helpdesk logo

4. Patent myths and misconceptions - part 2

By Alan Ward (Alan Ward Consulting)

Part I

Alan Ward, director at Alan Ward Consulting Limited

Alan Ward is a director at Alan Ward Consulting Limited

When should I apply and how much will it cost?

If you agree that commercial value is the key, should you really consider patenting anything until this has been ascertained? Commercial value may be a subjective term and you may not want or need to make £millions but it is at least objectively worth questioning whether your invention has the potential to recover your investment.

Proving commercial value is not easy and takes time. This will reduce your risk in terms of cost but the longer it takes to decide, the greater the risk that someone else beats you to it in the meantime. If commercial gain is not important to you and the aim is simply to try and protect the idea no matter what or to be able to say that you have a patent then a prompt application makes sense. This will minimise the risk of anyone beating you to it but does not minimise the cost.

If you apply for a patent too soon in the product development process you increase the risk that invention that may not have a commercial application. Early application can also restrict design freedom and could mean that even with potential commercial value, the final version may differ significantly from the original rendering any existing protection useless without amendment. Alternatively, you might scrap the original application, have it re-written or appended. There are some clever ways to keep costs down but every time a change is made, you incur cost.

Timing is therefore a personal equation balancing cost and risk and needs to be thought about carefully. This is where having a strong, professional and objective team of advisers will prove invaluable.

Whilst an invention might need to have commercial value to warrant a patent, a product need not have a patent to have commercial value. In fact most products don’t have patents, or at least patents you are aware of. Furthermore, patents can often be circumvented if a competitor feels it is worth it.

It should be pointed out that there are a range of alternative patent strategies that can be employed to help protect your idea during discussions and that need not be prohibitively expensive.

As an example, a simple application can be made relatively quickly and cheaply which enables you to say ‘patent pending’. It offers a degree of peace of mind enabling you to talk openly about your idea with an element of protection but can still be cancelled or withdrawn should needs be without being published or incurring extra cost.

Such strategies should be employed with knowledge and caution however so should only be considered with professional guidance to ensure you understand all the ramifications.

It is worth noting that there are those who minimise the cost by writing the patent application themselves. This is not to be recommended. As stated at the outset, IP is complex and specialist. A poorly written patent application, even if ultimately granted, is likely to easily circumvented rendering it largely useless. For reference, 20-25% of applications at the IPO are from unrepresented applicants but only 5% of these succeed in reaching grant.

Is a patent the ‘best’ form of protection?

As is hopefully explained above, there is no one right answer to this as it is totally dependent on the idea and your personal circumstances.

If the invention does not have commercial value and you don’t have a lot of money then a patent is probably not the answer.

If it is a unique and novel device with numerous applications, straight forward manufacture and significant commercial potential across the UK and beyond a patent may well prove to be the answer. However, you will still need to have the knowledge and wherewithal to develop the idea and take it to market. Without this capability, and irrespective of its level of commercial potential, if it has no chance of being manufactured and sold then why spend the time or money to protect it.

Arguably, the best protection for any idea is great design, a strong brand, a competitive price and a significant and loyal customer base. This has commercial value by definition and is a lot more difficult for a competitor to replicate and challenge.

Conclusion

So how can you get the balance right and ensure you don’t waste money on patent applications?

  • Establish what you are aiming to achieve
  • Challenge your invention testing whether anything like it exists and whether your target client would buy it in sufficient numbers
  • Research IP - contact the UKIPO and ask them to send you a range of their excellent resources and guides, visit the British Library, use the Web or talk to appropriate professionals
  • Build a reliable and objective team of professionals to support you
  • Challenge your invention and ask yourself why you are applying for a patent, is it necessary and is there an alternative form or protection?
  • Talk to a suitable patent attorney – most will give you 30mins to an hour for free
  • Decide on your personal preference in terms of balancing risk against cost
  • Pursue protection when appropriate

In a nutshell, know what you want to achieve and how, challenge your idea, talk IP early but only protect when you are ready.

Alan Ward is a director, Alan Ward Consulting Limited (AWC), a business improvement consultancy, specialising in helping busy SMEs and organisations develop and grow.

Working with business owners and senior managers AWC delivers tailored projects with clear timescales and costs across a variety of industries including new product development.

Whether strategy, sales or operations they provide professional and reliable help to get the job done.

Email: alan@alanwardconsulting.com

Telephone: 0118 954 6125

5.IP 5.IP in the news

Stories hitting the headlines this month:

And finally…

6. Your questions answered

Can I renew my trade mark online?

Yes, from our online renewals page enter your trade mark number. Check that the trade mark is the one you wish to renew. You can ‘view the trade mark’ and the ‘goods and services’ listed. If you don’t wish to renew all registered classes, select ‘No’ and proceed to deselect the relevant class(es). Select your interest in the trade mark e.g. owner or representative of the owner. Check your details and confirm.

How much does it cost?

  • £200 for one class of goods or services
  • £50 for each extra class

See our renewal guide for further information.

Yes, patent documents and other forms of registered Intellectual Property form a wealth of information about new technologies and the people and businesses developing them. Informatics involves mining this information to reveal patterns and trends, which can be used to provide insight and evidence for policymakers and decision makers, both in government and in industry.

If you are interested in an overview of existing technology or recent developments in any field of technology, or you are interested in your competitors’ activity, or in targeting research funding correctly, our Patents Informatics team could provide you with valuable answers.

We carry out bespoke investigations, both large and small, about inventors, companies, and all fields of technology. Our work is varied and innovative, and we develop new approaches to address the requirements of investigations wherever necessary. We are independent and unbiased, and we will carry out any work in confidence if required.