Cost-effective IP protection in the UK
29/08/2023
Businesses active in the UK may feel that cost-effectively building an IP portfolio, and resolving IP disputes, is challenging. High Court litigation, involving potentially lengthy proceedings and cross-examination of witnesses, is notoriously expensive. Unlike in the courts of many European countries, obtaining an interim injunction is usually quite costly. And the losing party must pay a large proportion of the winner’s costs. However, the UK is a surprisingly cost-effective territory in which to register rights, post-Brexit, and there are a number of good value litigation and enforcement options.
In 2020 the UK government initiated a call for evidence, which focused on access to proportionate and effective methods of resolving IP disputes. This was intended to inform a review of existing legal recourse for IP infringement. (Online infringement was excluded since it was being looked at separately.) The largest group of respondents was photographers, who were concerned that the time and expense of IP enforcement was not justified by likely damages. Attitudes to mediation were largely negative, partly because it was viewed as producing mixed results. Most respondents were uninformed about the availability of IP insurance, although some viewed it as not being appropriate to small claims. Nevertheless, about half had achieved successful outcomes through cease and desist letters, and some had successfully used the Small Claims Track. Much of the government’s strategy, however, appears focused on IP crime such as tackling counterfeits.
Audits
The first step in cost-effective IP protection is often going to be conducting an audit, because enforcement will be a lot more costly later on if nothing has been done to identify and document IP rights. Innovate UK EDGE has offered public funding, in partnership with the UKIPO, towards the costs of an IP audit for SMEs conducted by IP professionals.
Registering trade marks and designs
A trade mark registration is a low-cost investment that adds significant value. It is far easier to enforce compared to a passing off action; it can also block others from applying to register a similar mark; and it’s an asset that can be easily transferred. The current cost to file a single mark in one class at the UKIPO is just £170, and most trade mark attorneys and IP lawyers handling trade mark filings charge only a few hundred pounds to prepare a specification and file the application. The vast majority are not challenged, especially given that the UKIPO does not refuse applications based on similarity to prior marks.
As to UK registered designs, the UKIPO fee can be as little as £50 per design, although professional assistance is likely to be a good idea. Assuming a single design, typically up to around £1,000 in fees will cover the necessary work from filing through to registration.
Brand clearance
It is far more cost-effective to carry out clearance searches for proposed brands than to have to change a name later in the face of an infringement claim and/or inability to register the trade mark. The main misunderstanding among clients is not realising that similar (as opposed to identical) marks, and similar goods and services, can be obstacles.
A basic clearance search of UK and EU registers through an outside agency only costs two or three hundred pounds, and it usually costs less than a thousand pounds to have your advisers review and report on it. This can help to eliminate non-starters. More in-depth searches can be done for promising candidates, and this can then include overseas territories with analysis from local attorneys where necessary.
Taking action without litigating
There is a low probability of signed undertakings or financial redress through claim letters alone, although it certainly does happen. Where relevant, trade shows may have an IP policy and a professional on site, who can be contacted in advance to raise concerns about copycat products as well.
The UKIPO Patent Office Opinion service is entirely operated on paper and could be useful in particular to support negotiations. Key features include:
- Non-binding decision (although parties could agree that they will be bound by it as between them), and no damages awarded
- UKIPO may decide to revoke the patent for lack of novelty/inventive step where clearly invalid
- £200 filing fee
- Completed in no more than 3 months once submitted
The Company Names Tribunal is another cost-effective procedure (not to be confused with the limited system for complaining to Companies House if a company name is too similar to an existing company name). This is about businesses with a reputation, who find their names taken for company name squatting or other nefarious purposes. The vast majority of applications are undefended.
When it comes to taking positive action, online notice and takedown is a frequently used tool. Caution has to be exercised regarding the risk of action for unjustified threats, or causing loss by unlawful means, if items are taken down without lawful basis – that might include where the claimant does not in fact own the rights, or registered rights are invalid, or the content is in fact non-infringing.
Another low-cost option is a complaint to Trading Standards under misleading marketing regulations. These relate to marketing of goods or services that creates confusion with any products, trade marks, trade names or other distinguishing marks of a competitor, or that breaches comparative advertising rules. A disadvantage is that the proceedings are outside of the control of the complainant.
Similarly, border detention enables authorities to detain suspected infringing goods at the UK border. There is no official filing fee, and in the majority of cases detained goods are destroyed because the importer does not respond when notified.
For other kinds of disputes, there can be many benefits to mediation as highlighted by the UKIPO such as:
- Quicker and cheaper than litigation – allowing you time to focus on your business and not be distracted by lengthy and costly litigation proceedings
- High success rate – the large majority of mediations reach an agreement on the day, and other disputes reach resolution as a direct result of the mediation process
- Confidential – whatever the outcome, it will remain private (preserving business reputations) unlike a court hearing which is open to the public
- Mediation offers the opportunity to maintain existing commercial relationships
Parties must agree to mediate, and one option is the very low cost service offered by the UKIPO.
Litigation
When it comes to litigation, businesses should always consider insurance, including before-the-event. A number of specialist brokers can assist with this. It is different from litigation funding, which has been relatively unpopular for IP cases because only a small number of disputes involve a potential pot of gold in terms of damages.
Several options in the High Court are aimed at managing scope and costs.
First, the Intellectual Property Enterprise Court or IPEC. Parties can be of any size, although a large number are SMEs. Trial must not last more than two days (and is usually only one), there is a £500,000 value cap, and a £60,000 total costs cap (no matter how many defendants). Actual costs are likely to be around the £175,000-200,000 mark at least, and potentially higher.
The Shorter Trials Scheme is another possibility if the costs recovery limitations of IPEC are unappealing. Trial must be no more than four days and should be reached within 12 months. There are limits on disclosure and the extent of evidence, so it is particularly helpful if there are limited facts in issue. A Civil Justice Council Costs Review report published in May 2023 also supported a proposal for a £500,000 costs cap in patent cases in the STS, and work is planned on introducing a pilot scheme.
This article is not legal advice, which it may be sensible to obtain before you take any decisions or actions in the areas covered. Please do contact me if you would like an initial discussion of your situation.
