International Intellectual Property - United Kingdom

International Intellectual Property - United Kingdom

Published August 2019

Author

Patricia Barclay

Firm: Bonaccord
Country: United Kingdom - Scotland

Practice Area: Intellectual Property

  • 31 Merchiston Park
    Edinburgh
    EH10 3PW

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The bulk of our work is with innovators in the fields of pharmaceuticals, chemicals and engineering. However, as the wider population becomes more aware of intellectual property, we are increasingly being approached by artists and more lifestyle businesses such as fitness instructors who are looking not just to protect their intellectual assets but at how to expand their business using these assets. So, for example, a jeweller might look at moving into fabrics and dinner ware, while a fitness coach might look at building a network offering her programme. We are also seeing a growth in businesses that can be managed part-time or as a second source of income.

Working with start-ups and, in particular, university spin-outs, can be challenging. The first step is to understand the concept and where it would fit in the market. You will often be told there is no competition, but that often just means that no one else is working on the same concept. In reality, you need to find out how the problem is currently addressed in the field and how else it might be resolved. You have to be clear that there is a market opportunity of reasonable size to make the investment of time and money worthwhile. It is unpleasant, but sometimes it is a case of explaining that the “baby is ugly”. Once it is clear that the idea has legs, the current IP has to be assigned into the start up or appropriate licences obtained. Some universities can become greedy at this point, and it can be hard to negotiate terms that give a fair reward to the university but still allow the technology to be commercialised. If the spin-out will itself have to license the technology on to a final manufacturer or sales company, then there is a great danger of royalty stacking and the final product simply not being viable. Another issue if the University claims too large a proportion of shares in the spin-out is ensuring that the founders retain sufficient shares even after some investment is brought in to remain motivated. Investors are becoming increasingly wary of an early stage share register that carries too much dead wood and simply refuse to invest. So it is important to get the structure right from the very beginning. You also need to have a functioning board that supports the growth of the company and this means keeping it small but brining in the right expertise in the form of NEDs at the right time and not being afraid to change them as the company progresses. You also need to have the power to remove underperforming directors. This can be a sticky point with investors who naturally want to appoint a board member and often the chairman. This in itself is not a problem, but you need to agree a mechanism that if, say, a majority of the rest of the board want that person out, the investor is obliged to replace them. Sensible investors should be open to this, as a divided board cannot be in the best interest of the company, or of course, their investment. Much is written about having the “right” investor for your company, and while it is undoubtedly true that some investors are more attractive than others, it is often the case that an early stage company has little choice, as until the technology is proven, it can be hard to attract any investment at all. We maintain an extensive list of potential investors from angels to Venture capital funds and public bodies, and help our clients frame pitches intended to appeal to the particular investors. Key points are: what problem is technology aiming to solve? – expressed in layman’s terms, and: how much will it cost to get to exit?

Working in multicultural sectors is enormous fun, and people from different backgrounds, or who have come through different training methods, see issues in different ways, and that enhances the potential for creative outcomes and unexpected market opportunities – but it also means that you have to be careful to ensure that proposals have been fully explained, because if you are approaching an issue from a different context, what seems obvious to one person may not to another. You also need to ensure that you have agreement to go forward – while Dutch people may be very upfront with any doubts they have about a project, Danish or Japanese staff may not be so forthright but will simply not say they agree, and you must be alert that the absence of “no” does not mean “yes”. Process changes also need to be handled with care – asking staff to be aware of good safety practices and to come forward with ideas for improvements may be misunderstood in some societies as asking staff to spy on each other, while process-driven or very hierarchical organisations may have internal rules for changing procedures, which make quick changes difficult.

Licensing is an obvious way for small companies with strong IP to reach a wider customer base; however, you have to put a strong contract in place to protect the originator if something goes wrong. In particular, you have to think about the practicalities of moving forward with the business if you terminate and ensure that you have a dispute resolution clause that is both effective and affordable. Franchising is often suggested, and at first blush would seem the obvious set up for a novel exercising regime. However, managing a franchise is a big step for a small business, and the potential franchisor needs to think carefully not just about whether they have a strong enough package to franchise, but also about whether they have the manpower and skills to manage the resulting network.

Patricia Barclay will be listed as a leading individual in the next edition of Legal 500. These are the testimonials that they are quoting:

“It is very useful (and unusual) to be able to access this level of expertise without having to engage a larger London-based firm.”

“It is Patricia Barclay's in depth expertise that allows Bonaccord to stand out from the crowd.”

“Patricia Barclay has a knack for simplifying processes and guiding a client to the best outcome. She is fast and attentive and is experienced on both the buyer- and seller-side of major transactions.”

Patricia is one of only a handful of UK lawyers honoured with a fellowship of the ABA Foundation.

Many of our clients are working in highly international fields, such as the pharmaceutical and space sectors, so they need an IP strategy that considers the breadth of countries where their products will be sold. Membership of organisations such as the ABA, IBA and Cicero allows us to keep up to date with changes in both law and practice around the world and also gives us speedy access to experts who we know and trust for when action is needed in another country. Having the opportunity to meet with colleagues in other countries and to discuss the issues that they are encountering is much more valuable than just reading dry articles in the professional press.

Brexit continues to hang like a pall over all long-term planning at the moment, as we simply don’t know what the future will bring. While registration issues seem to be able to be relatively easily overcome, the exclusion of the UK from international research collaborations, and the current government’s attitude to immigration even in relation to leading scientists, will undoubtedly have a chilling effect on the development of new technologies in the UK.

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