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Intellectual property in the manufacturing sector

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Opinion towards intellectual property (IP) in the manufacturing sector diverges. Some understand the value and competitive edge which an IP portfolio can provide, and have an annual budget and clear strategy as to where to target it. Others see investme

Opinion towards intellectual property (IP) in the manufacturing sector diverges.  Some understand the value and competitive edge which an IP portfolio can provide, and have an annual budget and clear strategy as to where to target it.  Others see investment in IP rights as wasted resource and something they couldn't afford to enforce in any event.  The latter view often results from a lack of understanding of IP and the benefits protection can bring to a business. 

The purpose of this short feature is to aid a better understanding.

A quick guide to IP

IP takes various forms, each having its own defining characteristics.  Essentially the main IP rights are patents, designs (registered and unregistered), trade marks and passing-off type rights, and copyright and related rights.  Confidentiality is also important; rights in trade secrets or confidential information can be extremely valuable.

Patents protect inventions, whether in relation to a product or a process.  They last for 20 years from the date of application.  The main requirements for protection are that an invention must be new, must not have been obvious to somebody who is not inventive, and must have industrial (in the widest sense of the word) application.  Patents give monopoly rights.  They enable an owner to prevent any use of the invention by others, whether or not those others have copied, and whether or not the product or process another sells or uses is the same as the owner's.  It is not only highly technical products which can benefit from patent protection; commercially valuable patents over the last 20 years have included patents for relatively simple items such as non-spill baby cups, flame effect electric fires, and bolts.  An example of a company which has grown on the back of innovation combined with patent protection is Dyson, with its market leading bagless vacuum cleaners.

Designs protect the appearance of products or parts.  Whilst design protection generally excludes technical features, it is not only limited to aesthetically appealing objects.  In the UK and the EU for example, the appearance of anything deriving from its shape, contours, colour and materials can be protected provided it is new and creates a different impression from existing designs.  Design protection can be used even for graphic designs such as company logos, and also for relatively utilitarian designs.  There have been publicised cases regarding the infringement of simple items such as air freshener bottles, and our experience includes products as diverse as garden furniture, kitchen taps, sleeping bags, and even sanitary towels.  As with patents, registered designs provide monopoly rights, and a single registered design covering the whole of the EU can last for 25 years.

Trade marks are relevant to every business.  They guarantee trade origin in relation to goods and services, and enable a business to build and protect a reputation under a mark which is unique to it.  Whilst unregistered passing-off rights can be built up over time, such rights will be limited geographically to the extent of the business's reputation and goodwill, and it can be difficult and expensive to prove their existence.  On the other hand, a trade mark registration can provide immediate monopoly protection throughout a whole country or region, effective from the date an application is filed.  Another advantage of registered trade marks is that their term is not limited as in the case of patents, designs and copyright; trade marks can last indefinitely. 

The other classic IP right is copyright.  Copyright arises automatically as soon as a work is created, with no requirement of registration.  Copyright protects artistic and literary works (with no requirement for artistic merit) and computer programs, and there are also similar rights to protect databases.  An instruction leaflet inside the box of a drill will be a literary work, as will the text on the company website.  A picture on the side of a draught excluder will be an artistic work.  Copyright owners have the right to stop others from copying their work.

One disadvantage some businesses perceive in connection with registered protection (for patents mostly, but also designs) is the requirement that the invention (or design) be published to the world in exchange for protection.  Some manufacturers set out instead to maintain confidentiality in relation to their products or processes, knowing that they have something of value which they can keep secret; if they were to obtain registered protection the mere publication of the details may result in copying, with the monopoly protection expiring at some future point.  A combination of confidentiality (for its recipes) and strong trade mark protection has been used very successfully by Coca Cola in relation to its drinks.

Securing and making the most of IP protection

The first step for any business reviewing its IP strategy should be to check that it is able to identify where IP is being created within (or outside) the business, and then ensuring that it is captured.  This might include identifying an innovative individual creating protectable inventions or designs, or ensuring that proper documentation is in place to ensure the ownership of IP produced by a creative agency or an R&D partner.

Once IP has been identified and the rights captured, consideration can be given to what is worth protecting, and how.  Factors might include the extent to which ‘first mover advantage' is enough to protect a market or whether some additional protection is needed, or whether there is a reputation to protect.  If the product is inexpensive to make and the manufacturer needs high volumes to generate a return, it will be important to create barriers to entry.  IP can be used to achieve this.

To get the most from IP ownership it is advisable to combine an IP portfolio with a reputation for enforcing one's rights.  This doesn't have to be expensive - a prudent company will pick its battles carefully, deciding where it can win quickly, whilst at the same time gaining as much PR as possible.  And IP owners don't always have to take the action themselves; Trading Standards will often step in where there is a consumer angle, and throughout the EU there is an effective customs program for the detention of infringing products at ports.  For the more risk averse there are also more cost effective ways of raising patent claims through the Intellectual Property Office rather than the courts, and there is a cost conscious drive towards alternative dispute resolution (e.g.mediation) in relation to all IP disputes.

Grangers International Limited

Clarion client Grangers International Limited is an excellent example of a company which understands the value of trade mark protection, and which takes a pro-active approach to IP. 

Grangers International owns a portfolio of products and brands, including the world famous CHERRY BLOSSOM® shoe polish and the admired GRANGER'S® outdoor and leisure aftercare range.  The company manufactures all its products on site in Derbyshire, and has sales in over 20 countries worldwide, including in the USA and Canada.  The cornerstone of its IP strategy, particularly in overseas markets where it is not present physically, is trade mark protection.  Grangers International's portfolio runs to over 65 marks worldwide.

Neil George, Grangers International's Company Secretary, comments that "CHERRY BLOSSOM is one of the oldest shoe polish brands in the world, and the original GRANGER'S aftercare products were used by Sir Edmund Hillary when he climbed Everest.  Due to the consistent quality of the product CHERRY BLOSSOM has acquired an unparalleled reputation, and through a commitment to research and development our GRANGER'S aftercare range has earned a reputation for environmental leadership and great performance.   Whilst we are a relatively small company our income is derived from strong sales around the globe.  It is important, therefore, that we demonstrate commitment to our brands in all countries, and that we take steps to protect our sales and the reputation each of our products has.  It is our international portfolio of trade marks, combined with our skilled and well connected legal team, which gives us the platform from which to do this.   Our product reputation combined with the trade mark protection we have also gives us the substance and security we need to engage high quality distributors in our key markets." 

 

Jacuzzi UK Group plc

Yorkshire based Jacuzzi UK Group plc, part of the US owned Jacuzzi Brands Corp. group, is a manufacturer and distributor of high quality bathroom and kitchen products which invests considerable resources in various forms of IP protection.

One of the most famous IP rights exploited by the company is the JACUZZI® trade mark, the UK registration for which dates back to the 1960s.  It is currently registered in over 60 countries worldwide, and is one of the leading marks in the spa bath, hot tub and luxury shower sectors. Jacuzzi UK Group and its related companies operate a thorough enforcement program to ensure that the JACUZZI® mark retains its value and its distinctiveness in the trade.

Jacuzzi UK Group's IP activity does not end there.  As well as having a portfolio of other marks including BC SANITAN® and ASTRACAST®, the company owns a number of patents and believes strongly in registered design protection for its products.

Strategic Development Director Peter Hilliard holds firm views: "We are an innovative design led business which sets out to drive rather than follow market trends in product design.  If competitors were free to copy our products we would have to rely solely on our manufacturing quality and customer service to differentiate ourselves. Whilst we seek always to excel in these areas, we have an additional competitive edge by virtue of our exclusive, high quality, product designs which our competitors cannot reproduce.  In the UK and the European markets the protection we acquire through Registered Community Designs, which are simple, quick and cost effective to obtain with the right advice, is extremely valuable."

For further details please contact:

Esther Kirwan, Partner, Clarion on 0113 336 3432, or email ip@clarionsolicitors.com.

As featured in Yorkshire Business Insider, May 2010

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