UK: Coming to Blows: Can You Fight for Your Rights?

Last Updated: 21 January 2004

Intellectual property rights, such as trade marks, copyright and patents ("IPRs") give you the right to prevent your competitors and others from copying crucial business assets such as your brands, computer programs, website designs. This is great in theory … but in practice many small and medium sized enterprises ("SMEs") have found court action to prevent infringement too cumbersome, risky and expensive.

Sound familiar? Then here are some simple steps and recent developments that can help you to fight for your rights:

  • Ensure your business keeps all legal documents (such as commissioning agreements and employment contracts) showing what IPRs you own. Also, keep accurate, well-organised records which can be immediately accessed to prove your rights. (Such as full records of the use of business names and logos. In addition, a design business should sign, date and keep all design drawings, including initial sketches. Make sure you can prove the date of creation of your drawings by sending them to Pictons to date-stamp and keep for you, free-of-charge).

  • You can use the documents and records outlined above to ask a solicitor to prepare a forceful letter to anyone you believe is infringing your rights (a "letter before action"). Often, a well-drafted letter before action can give you a speedy, cost-effective deal – avoiding the need for court action.
  • Bring your IPRs to prominent notice in your dealings with others, so reducing the chance of them being used without your permission. For example, if you sell goods or services covered by a trade mark then mark the goods, your promotional materials, etc ® (if registered) or TM (if unregistered).
  • Insurance to cover your legal fees of bringing (or defending) an IPR court action is increasingly widely available. Check to see if your existing legal expenses insurance covers IPR litigation (unlikely) or if it can be extended to cover it. If not, there are special insurance policies available to protect your IPRs. If your IPRs are already being infringed, you may be able to obtain "after the event" insurance cover – but the premiums will be high.
  • Arbitration may be quicker and cheaper than a court action. The World Intellectual Property Organisation, for example (part of the UN), offers specialist IP arbitration. This may be appropriate in certain IPR disputes, such as a dispute with your former distributor, supplier or franchisee. You should consider whether to provide for arbitration as an alternative to litigation in your commercial contracts.
  • Independent bodies exist – or are under discussion - to help SMEs fight for their rights. The Alliance against Counterfeiting and Piracy, for example1, has members such as the Business Software Alliance and the Federation against Copyright Theft that offer advice and assistance to help their members enforce their IPRs. The future sees the possible development of a "Patent Defence Union"2 – an EU-wide voluntary grouping of patent owners, which could be extended to the owners of other IPRs too. The Patent Defence Union would provide arbitration for disputes between members and have a fund to fight litigation.
  • Throughout the EU, ownership of registered IPRs (trade mark and design registrations and patents) is becoming more straightforward and cost-effective. Many SMEs already own Community Trade Marks and Community Designs – a single application gives you a right valid throughout the EU. You can already make a single application for a European Patent, which will give you a bundle of national patents in the countries of your choice. By 2007, you should also be able to apply for a Community Patent – the aim is to have a single, affordable patent valid throughout the EU. (The current cost of a European patent is some 3 to 5 times higher than a patent in the US or Japan).
  • Court action in the EU is becoming a better bet, with the increased use of specialised IP courts and simplified enforcement. It is already possible to obtain a court order valid across the whole EU to prevent future infringement of your Community Trade Mark or Design right. In October 2003, Mattel obtained from the High Court in London an EU-wide injunction preventing Simba Toys from selling MY STYLE dolls which infringed Mattel’s design rights in their MY SCENE dolls3. Looking forward, by 2010 we should have a single Community Patent Court to guarantee consistent decision-making across the EU. Also, the EU Commission wants to create a level playing field for the enforcement of IPRs in different EU countries, by bringing enforcement measures across the EU into line with existing best practice4.
  • If some IPRs (particularly, copyright and trade marks) are intentionally infringed on a commercial scale, it may also be possible to prosecute the infringer for a criminal offence – commonly known as counterfeiting, pirating or bootlegging. You may bring a private criminal prosecution or report the offence to a trading standards office or the police.
  • If goods infringing your IPRs are being imported into the UK from outside the EU, you can apply to Customs and Excise to seize the illegal goods5.

Court action to enforce your IPRs is not for the faint-hearted and, for most businesses, should be seen as a last resort. However, there are simple steps you can take to help your business avoid court action, or to improve your position in any action you are forced to bring or defend.

1 www.aacp.co.uk

2 Recommended in a report on "Enforcing small firms’ patent rights" commissioned by the EU in 2000. Go to www.cordis.lu/innovation-policy/studies/im_study3.htm.

3 Mattel Inc –v- Simba Toys 30 October 2003, High Court of Justice, London: unreported

4 Proposal for Enforcement Directive 2003/0024, 30.01.2003.

5 Go to the Customs and Excise site: www.hmce.gov.uk

©Pictons 2003. First published in Pictons' "In the Know" email newsletter.

Pictons Solicitors is regulated by the Law Society. The information in this article is correct at the time of publication in December 2003. Every care is taken in the preparation of this article. However, no responsibility can be accepted to any person who acts on the basis of information contained in it. You are recommended to obtain specific advice in respect of individual cases.

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