6 January 2015

In-house IP Training

View of Huddersfield
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Yesterday lunch time I visited a business in Huddersfield to talk to its staff about intellectual property ("IP"). An incident had occurred some months ago when it would have been to their advantage to have known more about IP. Sensibly the company's managing director sought training for its employees and asked a local business advisor to help. The advisor made enquiries at a neighbouring law school but their IP specialist could not assist so the advisor approached me.

That is the sort of invitation I am always happy to accept. As I explained in IP Services from Barristers 6 Apr 2013 4-5 IP:
"It is now permissible for members of the public to consult barristers directly under the Public Access scheme and there are sometimes advantages in doing so, especially in respect of intellectual property. Because we are independent and objective we can advise on the optimum legal protection for a new product or business. For instance, the instinct of a patent attorney is to recommend patent protection for a new invention and in as many countries as possible. Often, that is the best advice but when the inventor is an individual, start-up or small business more nuanced advice is required."
A barrister's job is to obtain the best legal outcome for his or her client and not simply to represent them effectively in court though of course we do that as well. Because we see a lot of disputes we can often spot pitfalls well in advance and advise on how to avoid them. And that is just what I did yesterday.

I was led into a conference room where a table was set up for lunch.  There were different types of bread, cold ham and chicken, fresh fruit salad, profiteroles and a chocolate Yule log. The managing director introduced the trainees, offered us tea and coffee and invited us to tuck in. There were four trainees.  All were women. They were all very bright and it became clear from the conversation that they all had substantial business experience. Each of those ladies had prepared a list of questions and they took it in turns to quiz me.

The first question was on artwork. They were often asked to do artwork for customers who later used it for purposes for which it was not intended. The customers thought they could do what they wanted with the art work just because they had paid a fee. The question boiled down to "who owns the copyright and what licences (if any) are granted or retained?" I referred the ladies to the Copyright, Designs and Patents Act 1988 and in particular to s.11:
"First ownership of copyright
(1) The author of a work is the first owner of any copyright in it, subject to the following provisions.
(2) Where a literary, dramatic, musical or artistic work, or a film, is made by an employee in the course of his employment, his employer is the first owner of any copyright in the work subject to any agreement to the contrary.
(3) This section does not apply to Crown copyright or Parliamentary copyright (see sections 163 and 165) or to copyright which subsists by virtue of section 168 (copyright of certain international organisations)."
Their company owned the copyright in any art work that they produced subject to any contract that the company may have made with its customer. That could depend on their company's terms and conditions or on those of their customer. I asked what the company's terms and conditions said about ownership of copyright in its employees' artwork. I was told that there were no terms and conditions. I replied that they should consider getting a lawyer or patent or trade mark agent to draft some for them.

One of the ladies asked whether it might be to their company's advantage "not to have a contract". I responded that they did have a contract but not a written one. In  a dispute over title to copyright in the artwork a judge and lawyers would scour the party to party correspondence, minutes and memos of meetings, previous dealings between the parties and what was normally done in transactions of that kind by other businesses in the industry. All that could take time and cost money and lead to a lot of uncertainty. Much if not all of that could be avoided by adopting a simple set of terms and conditions.

The next question was on artwork for quotations. Sometimes a customer asked them to prepare a quote which might involve quite a lot of work. The customer might reject the quote and take the work to a competitor who could undercut them.  I told them that had actually happened in Pensher Security Door Co. Ltd v Sunderland City Council [2000] R.P.C. 249 and that the Court of Appeal had held that the customer had infringed copyright by taking the design to another company and ordering goods from them.

They asked me how much it would cost for a lawyer or attorney to draft terms and conditions and I replied that it would be between £500 and £750 plus VAT. There was a collective intake of breath around the table suggesting that they thought it was a little on the high side. I decided to discuss the alternatives. "Some companies" I said "simply look at their competitors' websites and lift the legals from them. But that is a mistake for two reasons. First, copyright is likely to subsist in the terms and conditions just as it does in any other kind of work so copying the T & C even with a few changes here and there amounted to copyright infringement for which the copyist might be sued either by the person who drafted the terms or his client. Secondly, terms and conditions are intended to manage risk and the risks of the competing company might not be the same as the company's. It was like wearing another person's clothes. They might cover the body up to a point but they would not fit snugly or look very good."

I pointed out that terms and conditions are rather like the fortifications of Sandal Castle or some other medieval fortress. The first line of defence was the moat which kept out most of the undesirables of medieval Yorkshire such as waifs and strays, thieves and vagabonds, sturdy beggars and wild animals. In a company the moat corresponded to best practice. The next line of defence was the curtain wall from which defenders could rain down arrows, boiling oil and molten lead on more determined invaders. That defence corresponded to insurance. The last line of defence was the keep or bailey and if an invader got that far he had come a long way. That was where the hand to hand fighting might take place such as Macbeth against McDuff. The keep was like terms and conditions. They were for situations where best practice had failed and there was no insurance cover. The T & C had to be integrated with the insurance cover and best practice and that was where the work was to be done. When they considered that the cost of a law suit might run into the hundreds of thousands or even millions the ladies agreed that £500 to £750 was very good value.

We talked about IP insurance and I warned the ladies that many legal expenses insurance specifically exclude IP disputes. I advised them to check the company's policy and consider obtaining additional cover unless they were confident that they could fund any infringement claims that they might wish to bring or defend any revocation or invalidity claims that others might bring against them. They asked about the costs of litigation and I told them all about the Chancery Division and the chancery county courts, the Patents Court, IPEC including its small claims track and other options such as the IPO hearing officers, IPO examiners' opinions, domain name dispute resolution services and various mediation services. One of the ladies asked me to explain the difference between patents and copyrights which led to a discussion on intellectual assets and the different forms of legal protection. Another asked about IP protection abroad and I told them about TRIPs and the international conventions.

I had been booked for an hour but the session lasted nearly double that time. None of us was looking at the clock. The conversation was lively and stimulating and I think we all enjoyed ourselves.  If any other business, law firm or patent or trade mark agency in Yorkshire or indeed anywhere else wants me or one of my colleagues to lead a similar discussion he or she need only ask. I would normally charge about £350 + VAT for a session of this kind but as the initial enquiry had come through a connection who had recommended me in the past I did it for free.

If anyone wants to discuss this article or IP law generally he or she should call me on 020 7404 5252 during office hours or use my contact form.

Finally, I should like to wish all my readers a very happy New Year.