16 August 2014

Franchising - Hull Franchise Conference

Hull by Night
Photo Wikipedia

The Franchise Conference is coming to Hull on 25 Sept 2014. It has already been to Sheffield and you can find out what happened there on this YouTube video. The event is supported by Loven who are appearing with us at our IP workshop and clinic at the Gravity Fields science festival in Grantham on the 26 September 2014.

The keynote speaker will be Eric Ho, founder of the YoYo Group and topics will include:
  • Why businesses fail and how to avoid the traps 
  • Does your Brand belong to you? 
  • Branding & Marketing your business 
  • The Legal Aspects of Franchising
  • Optimise the Value of your business
  • What does owning a franchise really mean?
  • What will the banks be looking for from you?
  • Questions & Answer session.
There will also be an exhibition,

The event will take place at 
The Royal Hotel
170 Ferensway
HU1 3UF.
You can book online by clicking here.

I've been interested in franchising for a long time. One of my first cases when I came to Bridge Street Chambers was on behalf of a franchisee whose business failed because he had been forced to pay over the odds for supplies from his franchiser. Everybody including his solicitor and my clerk thought he was going down but I had read a report of  R-161/84 Pronuptia de Paris GmbH v Pronuptia de Paris Irmgard Schillgallis [1986] ECR 353 in the Financial Times and thought I could do something for him. I was right and managed to negotiate quite a favourable settlement for him. Word got round and I found myself representing two other franchisees of the same operation with similar results.

The law changed immediately after that decision and now you have to be very careful before taking a franchisee. As I said after a visit to "Which Franchise" on 2 Oct 2011 "Taking a franchise may be the best thing you ever do" but it could also be the worst. To help prospective franchisees I published The franchise agreement: understanding what you are letting yourself in for. on JD Supra on 20 Jan 2012 and "Franchising - what can a franchisee do if things go wrong?".   

If you want to discuss anything in these articles give me a ring on 020 7404 5252 during office hours or get in touch through my contact form.

13 August 2014

Forthcoming Events: Sheffield - Mel's World Record Attempt

Mel Wong - Sky Dancer

Sheffield dancer Mel Wong who appeared in Channel 4's Big Ballet earlier this year will attempt to break the world record for grands battements at Hype dance studios at 67 Earl Street, Sheffield, S1 4PY on 22 August at 16:30 (see "Mel's Record Attempt" 7 Aug 2014 Terpsichore).

For those of you who don't know what a grand battement is, here is Wikipedia's definition which is as good as any:
"a powerful battement action where the dancer passes through dégagé and "throws" the leg as high as possible, keeping it straight, while the supporting leg also remains straight."
"Battement" is itself defined as "beat" and "a beating movement of the working leg". They are hard work I can tell you. 

The existing record is 1,199 and was set by Jeanne-Carlin Cilliers in South Africa on 5 March 2005 (see the Guiness World Record website). 

Mel is making this world record attempt as part of her campaign to raise funds for her training at Trinity Laban Conservatoire  in London (see Help me change the dance landscape on the GoFundMe website).

Forthcoming Events: Sheffield - Movers and Shakers

Joyce Gray of Sheffield Central Library who has recently taken over the organization of the Sheffield inventors club has brought the following event to my attention.

It is called Inspiring Entrepreneurs: Movers and Shakers and will consist of a talk by Rekha Mehr followed by a live streaming from London of a panel discussion by
The event will take place at The Electric Works, Sheffield Digital Campus, Sheffield, S1 2BJ on 22 Sept 2014 between 17:45 and 21:00. Click here to book your place.

12 August 2014

How far (if at all) is it possible to protect Innovation in Financial Technology?

Head office of the Yorkshire Bank
Photo Wikipedia

Although only three British companies were listed in the 2013 FinTech 100 rankings compared to 10 from India and many more from the USA our government aspires to make this country the world leader in financial technology (see "Plan to make Britain global centre of financial innovation set out by government" 6 Aug 2014). With over 42,000 people employed in the financial services in 2012 Leeds hopes to develop a local financial technology industry. As part of the International Economic Conference that took place shortly before the start of the Tour de France, Pinsent Masons hosted a half day seminar called "At the Forefront of FinTech" to discuss the opportunities for fintech businesses in the City Region. On 16 July 2014 the dotForge accelerator announced plans to set up the first fintech accelerator outside London in Leeds ("New “fintech” accelerator for Leeds" 16 July 2014 Yorkshire Post).

In Fintech The UK’s unique environment for growth UK Trade and Investment listed several advantages for the UK:
"– the presence of a large and technologically sophisticated customer base
– London’s position as a world-leading centre for financial services
– good availability of business capital
– a supportive regulatory approach
– excellent financial services infrastructure, and
– London’s position as a global trading hub."
All that is very true but the UK does suffer one important disadvantage in relation to its global competitors which is that it is very difficult to protect investment in the development of financial technology in this country.

The problem is that s.1 (2) of the Patents Act 1977 declares that
"the following (among other things) are not inventions for the purposes of this Act, that is to say, anything which consists of -
(a) a discovery, scientific theory or mathematical method;
(b) a literary, dramatic, musical or artistic work or any other aesthetic creation whatsoever;
(c) a scheme, rule or method for performing a mental act, playing a game or doing business, or a program for a computer;
(d) the presentation of information......"
Much of the technology used in the financial services industry are computer programs. methods of doing business or the presentation of information. These exceptions are themselves subject to the following proviso:
"but the foregoing provision shall prevent anything from being treated as an invention for the purposes of this Act only to the extent that a patent or application for a patent relates to that thing as such."
Those words - particularly the last two - enable a skilful patent attorney occasionally to draft a specification for a software implemented invention that can be patented but that is not possible for all such inventions. Other countries that are party to the European Patent Convention which include all our EU competitors have similar statutory exclusions as their laws like ours have to correspond to art 52 (2) and (3) of the Convention; but there are no similar statutory exclusions in American, Chinese, Indian, Japanese or Korean patent legislation.

In his  speech at the launch of the new trade body for FinTech, 'Innovate Finance' 6 Aug 2014 the Chancellor of the Exchequer said:
"We’re introducing the right tax regime for this new industry.
  • With major new incentives to encourage investment in start-ups
  • Patent Box, so that if you invent in the UK you only pay 10% on those profits
  • and now we will allow peer-to-peer lending in ISAs."
The exclusion of many software implemented inventions from patent protection renders nugatory at least one of the incentives to innovation that the Chancellor of the Exchequer announced in his. Without a patent nobody can take advantage of the patent box.

In Digital Opportunity A review of Intellectual Property and Growth Prof, Hargreaves advised the government to
"work to ensure patents are not extended into sectors, such as non-technical computer programs and business methods, which they do not currently cover, without clear evidence of benefit."
 HMG accepted that recommendation without demur in The Government Response to the Hargreaves  Review of Intellectual Property and Growth:
"The Government will resist extensions of patents into sectors which are currently excluded unless there is clear evidence of a benefit to innovation and growth from such extension."
There was no debate on the legal protection of financial technology during the passage of the Intellectual Property Bill through Parliament not even any detailed discussion of the topic during the extensive consultation on the implementation of Hargreaves' recommendations.

If they can't protect financial technology with patents then the new businesses that the Chancellor hopes to encourage including any that may be set up in Leeds will have to rely on other intellectual property rights. Traditionally software houses have relied on copyright and trade secrecy to protect their technology but that does not work terribly well with free open source software and decisions such as the judgment of the Court of Justice of the European Union in C-406/10 SAS Institute Inc v World Programming Ltd  [2012] WLR(D) 131, [2012] EUECJ C-406/10, [2013] BUS LR 941 do not help. That leaves trade marks that protect a business's brand but not its technology and the advantage of being first in the field.

In the USA there is extensive discussion on intellectual property protection of financial technology (see for example the slides for Wilmer Hale's webinar What Should Financial Institutions and FinTech Companies Be Doing?  6 March 2013 but I struggle to find similar discussion here. If I were a business angel or manager of a private equity fund I am not sure that I would be particularly happy with that.

22 July 2014

How can Leeds regain its Lustre?

Leeds Town Hall
Source Wikipedia

"Has Leeds lost its Lustre" asks The Lawyer today with the red rose above the white. Though Leeds remains an important legal centre the answer would appear to be "yes". As Catrin Griffiths wrote in "Outflanked in this War of the Roses" 21 July 2014 The Lawyer:
"Firms don’t readily offer up turnover figures split out by region, but headcount figures can tell you a lot of what’s been going on behind the scenes. The Lawyer’s data shows that the Leeds Big Six – Addleshaw Goddard, DLA Piper, Eversheds, Pinsent Masons, Squire Sanders Patton Boggs (legacy Hammonds) and Walker Morris – have all markedly reduced their headcounts in the past five years. DLA Piper refuses to give official headcount figures, but we understand it has also seen a drop of around 10 per cent in staff numbers. The biggest resizing has been at Eversheds, which has reduced its total staff numbers by a full third."
Asking "Whatever happened to Leeds" in "Out-of-London is the new London" 16 June 2014  The Lawyer Ms Griffiths noted
"Fifteen years ago it was a legal powerhouse that helped spawn DLA Piper, Eversheds, Pinsent Masons, Hammonds (now Squire Sanders) and Addleshaw Goddard. But as Manchester’s star has risen, so Leeds’ has fallen ...."
This article considers why that decline has occurred and what if anything can be done about it.

The law firms that Ms Griffiths mentioned grew quickly in the 1990s in response to a massive increase in works as a result of demutualization of building societies and a surge in consumer credit. The banking crisis put paid to both with the result that Leeds's GVA contracted sharply. According to The Lawyer it fell by nearly 6% between 2008 and 2009 while Manchester's actually grew slightly reflecting its regeneration and encouragement of new industries. The result, as Ms Griffiths concluded, is that:
"The Manchester brand has the advantage of a regenerated city, international airport, leading higher education institutions, future high-speed rail, a creative culture hub, BBC Salford (which for anyone living south of Birmingham means Manchester) and a couple of minor football teams."
In short, Manchester is doing better because it has a bigger population and a more diverse economy.

Manchester could do even better (and Leeds very much better) if their respective economic hinterlands were bigger. In "Creating a Northern Counterweight to London is good for the Nation" 5 April 2014 IP North West I referred to World Bank research that doubling a city's size increases its productivity by 3 to 8% and Evan Davis's contention that "if the population of Manchester could be quadrupled it would be between 6 and 16% richer than it is now."

Source Wikipedia

In fact, Manchester and Leeds and also Sheffield and Liverpool are located in an almost continuous built up area that stretches from Wetherby to the Wirral much in the way that Greater Los Angeles stretches from Ventura to San Bernardino in the East and Mission Viejo in the South. As in the North of England the communities of Southern California are separated by large areas of open countryside many of which are state or regional parks. Just as the Pennines separate the Leeds and Sheffield city regions from Greater Manchester and Merseyside the Santa Monica and San Gabriel mountains separate the towns and cities of the Pacific Coast from those in the San Fernando Valley.

The big difference between Southern California and the North of England is that the former thinks of itself as a cohesive and integrated whole whereas the latter does not. The sense of identity is not the result of local government unification - there are four counties and many municipalities in Greater Los Angeles - or massive infrastructure investment - there is nothing like the HS3 that the Chancellor of the Excehequer proposed a few weeks ago - indeed public transport in Southern California was appalling until a few years ago. It is entirely cultural and the thing that stops those of us in South and West Yorkshire, Greater Manchester and Merseyside from acknowledging that we already live and work in a conurbation of 7 million people and exploiting the economic opportunities of such a market for every type of goods and services (including in particular legal services) is our mindset.

This myopia was brought home to me at the Leeds economic conference at the beginning of this month (see "Power. Performance. Potential. Leeds Economic Conference" 5 July 2014 IP North West). The conference was opened by the Deputy Prime Minister who on this occasion spoke a lot of sense:
"It’s time for us to put aside outdated local rivalries. As we’ve seen with the Local Enterprise Partnerships in Leeds, Sheffield and Manchester, united we’re stronger."
He made the point that "Northern cities like Leeds aren't just competing with other locations in the south, east or west of England" but also have to rank against global cities like Frankfurt, Lyon, Bangalore and Chengdu for incoming investment. Clegg argued that "Leeds, along with Sheffield and Manchester, can and should form part of a northern hub, driving economic investment and growth across the north of England."
"Together, they can offer investors access to flexible, highly-skilled work forces, world-class universities with cutting-edge research expertise, a strong industrial base and clusters of innovative businesses in high-growth sectors such as precision manufacturing, creative and professional services, healthcare, retail and green industries."
Unfortunately, Clegg was followed by the leaders of Leeds and Wakefield city councils and the Chief Executive of York who really should have known better indulging in what can only be described as Manchester bashing:
"I wasn't going to mention Manchester" said one, "They're only better at self-promotion" said another. "We've hot a bigger economy £55 billion as opposed to £51 million" chimed a third to the general acclamation of the crowd."
I had come to that conference expecting to be buoyed up. After all we were there to celebrate the start of the Tour de France, one of the world's biggest sporting events, from the United Kingdom. I left the Carriageworks Theatre feeling thoroughly downbeat. So long as that sort of thinking prevails, Leeds, its business community and its professional services sector including its law firms will continue to wither on the vine. If on the other hand Leeds and in particular its professional services sector acknowledged that they were already part of a massive economic region and helped to develop it they could recover some of the dynamism that they displayed in the 1990s.

One problem with developing a sense of identity for the region is that it does not have a name. Again, perhaps, we can look to LA for inspiration. An alternative name for Greater Los Angeles is "The Southland". How about "Northland" for South and West Yorkshire, Greater Manchester and Merseyside?

20 July 2014

Well at least a Yorkshireman invented Cats' Eyes

Source Wikipedia

The former Manchester Guardian listed Percy Wood of Halifax as one of the top 50 Yorkshire folk of all time. He invented the reflective road market known as cats' eyes in 1933. Apparently, he got the idea after seeing a real cat's eyes while negotiating the still hazardous road from Clayton Heights to Halifax. Reflectors based on Shaw's invention are found all over the world.

However, there have not been so many inventions from our county recently. According to the Intellectual Property Office's Facts and Figures for 2012 and 2013, some 984 British patent applications were filed from Yorkshire and the Humber in 2013 compared to 1,025 in 2012.  In the same year there were 2,822 applications from South East England, 2,588 from London, 1,802 from the East of England, 1,368 from the South West, 1,259 from the North West and 1,180 from the West Midlands. However, Yorkshire was ahead of Scotland (900), the East Midlands (742), Wales (539), North East England (314) and Northern Ireland (237). Yorkshire was also 7th in the number of grants: 171 compared to 437 from South East England, 346 from London, 340 from South West England, 337 from Eastern England, 204 from North West England and 192 from the West Midlands.

There were 2,744 trade mark applications from Yorkshire in 2013 compared to 12,699 from London, 6.197 from South East England, 4,222 from North West England, 3,407 from South West England, 3,227 from the East of England and 2,885 from the West Midlands. With 2,305 registrations in 2013, Yorkshire trails London (10,583), South East England (5,258), North West (3,521), South West (2,951), Eastern England (2,651) and the West Midlands (2,329).

With 78 registered design applications and 59 registrations in 2013 Yorkshire was last but one from the bottom. Only Northern Ireland had fewer applications (19) and registrations (16).  The top three regions for designs were London (1,153 applications and 720 registrations), South East England (1,066 applications and 883 registrations) the North East (548 applications and 484 registrations). North West England had 471 applications and 397 registrations.

We can assist artists, designers, inventors, entrepreneurs and investors in Yorkshire and the Humber with our IP clinics at Barnsley BIC, talks and publications all of which are free of charge. For our chargeable services see "IP Services from Barristers" 6 Apr 2013 4-5 IP. If anyone wants to discuss his article or any patent, trade mark, design or other intellectual property matter he or she should call us on 01484 599090 or get in touch through my contact form. You can also tweet me, write on my wall or send me a message through G+, Linkedin or Xing.

2 July 2014

The Tour de France and ambush marketing

Holmfirth - the Tour de France passes through my home town

The Tour de France is of particular interest to me this year because the route passes a few hundred yards from my front door. Crash barriers have already been erected along Chapel Hill in Huddersfield and the route is festooned with yellow, green, white and polka dot flags. As everyone in this county knows, the Tour is setting off from Leeds and two of the stages are taking place in Yorkshire with a third in the East of England. There has been an arts festival since the 27 March 2014 and an international business festival in Leeds this week.

Like all major sporting events the Tour is dependent on sponsorship but sponsorship is vulnerable to ambush marketing. To protect the sponsors of the London Olympics from ambush marketing new intellectual property rights were created, namely Olympic association right by the Olympic Symbol etc. (Protection) Act 1995 and London Olympic association right by the London Olympic Games and Paralympic Games Act 2006. HM government was obliged to enact this legislation by the host city contract which it signed with the International Olympic Committee. Such feather bedding for the Olympic sponsors was criticized by many at the time including me (see "Olympics Association Right and London Olympics Association Right" 31 July 2012 NIPC law).

There has been nothing like those association rights for the Tour with the result that there has been a blossoming of yellow bicycles, assorted coloured flags and tea rooms and pubs throughout the county have broken out in measles (or is it polka dots). No doubt this decoration has been with the permission of the tour organizers but could anything be done about it if it was not? La Société du Tour de France has registered a number of Community and UK trade marks for the words "Le Tour de France" and some of the Tour's symbols for a large number of classes but it does not seem to have registered the colours of any of the maillots or indeed the polka dots. There is the the law of passing off, of course, but I would not like to argue that yellow, green or red spots is associated with the Tour and none other. In any case, by the time an application for an injunction came before the courts the cyclists would be well on their way to Champs-Élysées.

So tant pis as our friends across the channel would say, but does it matter?  I would reply "ce n'est pas grave",