Ten Top Tips for Yorkshire Inventors

Probably the most famous Yorkshire inventor is Percy Shaw who invented cat's eyes. Shaw patented his invention and set up a company to manufacture it. After a slow start his company manufactured over a million road studs a year. He ran a Rolls Royce and received an OBE in 1965 (see Reflecting Roadstuds Ltd.'s History page). Not every inventor can be as successful as Percy Shaw but his life story shows how it is possible for a man of very humble origins and limited education to exploit a bright idea spectacularly well.

Here are some tips on how to do it.

Tip No. 1 - Make sure you own the invention

Although the inventor is primarily the person who is entitled to an invention there are some who take priority over him or her. Employers, for example, if the inventor is employed in an R & D department or in some other job in which he or she might be expected to come up with an invention. Product design consultants are another group of people who would not normally claim an invention that they had helped to develop. This was not a problem for Percy Shore because he was self-employed contractor when he made his invention. Check your contract of employment and contact me or some other professional advisor if in doubt.

Tip No. 2 - Keep quite bout the invention until you are ready to exploit it 

You know the good old Yorkshire song that begins "Hear all, see all, say nowt". It makes very good sense for inventors. Patents confer monopolies which can be granted only for inventions that are new. "New" for this purpose means something that is not part of the "state of the art", that is to say the sum of human knowledge at the date of application for a patent. If you go blabbing about your invention it ceases by definition to be new and, thus, not patentable. Not only that it makes it very difficult to protect the invention in some other way such as the law of confidence. Best to keep your trap shut at all times except when talking to people who might help you protect your invention such as lawyers or patent attorneys, design or develop it such as product designers and development consultants and, of course, potential partners or investors who will help you make and market it.

Tip No. 3 - If you do need to discuss your invention do so in confidence

That brings me onto Tip No 3 that if you do need to discuss your invention with anyone do so in confidence.
An obligation of confidence is a duty not to disclose or misuse or disclose information that has been disclosed in confidence without the discloser's permission or other lawful excuse. Such an obligation arises automatically in some cases such as when you consult a lawyer or patent attorney. In other cases it is sensible to get the other party to sign a confidentiality or non-disclosure agreement. Such an agreement should specify the information precisely. It should require the other party to keep the information under wraps except when in use. It should state the purpose of any disclosure, whether the information can be shared with anyone else, whether documents  can be copied and when they are to be returned.   It is then up to you to police and enforce the conditions of the disclosure. I gave a presentation to the Leeds Inventors Club on confidentiality on 14 June 2006 and have written several articles on the subject such as Confidential Information on 12 Nov 2006 in my Inventors' Club blog. Though they were published 10 years ago the law has not changed much. If you need further information on the topic  do get in touch with me.

Tip No. 4 - Be particularly careful when approaching potential licensees

A lot of people write unsolicited letters to manufacturers or retailers whom they believe could be interested in the invention in the hope that they will develop it, put it into production, market it and pay them some money for their idea. That is nearly always a mistake. In most cases the letter ends in the bin and nothing more is heard from the manufacturer or retailer except a short acknowledgement. The reason for that is that many businesses have more than enough ideas that never see the light of day from their own R & D or marketing staff and they would risk a strike or at the least a lot of resentment by such employees where they to run with an idea from outside the business without good reason. Moreover, if the unsolicited idea is taken up the recipient is under no duty to pay the person who had the idea any money or even to give him or her any recognition unless the recipient receives the idea in confidence or the person who had the idea applies for a patent. There are, of course, exceptions. The NHS has set up a number of innovation hubs such as Medipex to develop its employees' inventions and a few companies such as Procter & Gamble and Boots invite submissions from members of the public but even then you should take care and seek professional advice if in any doubt. That was not a problem for Percy Shaw who set up a company to manufacture his own road studs. For many inventors, that is the best way forward.

Tip No 5 - Treat invention promotion companies with caution

Invention promotion companies are businesses that offer to evaluate an invention and bring it to market. They advertise widely in the press and on the internet.  There are some reputable companies such as the NHS hubs that I mentioned above and I am aware of one not-for-profit enterprise that has been formed by an inventors' club in Lancashire but many are not. The Intellectual Property Office warns in Seeking intellectual property advice:

"Some unreliable firms promise to evaluate your invention for a fee of a few hundred pounds. They then tell you that your invention has great market potential. They may offer to promote your invention to manufacturers if you pay a fee of several thousand pounds up front. Once you have paid up, they may do little or nothing for you."

Very few invention promotion companies offer information or services that are not available free of charge or for a modest fee elsewhere.

Tip No. 6 - Use the Business and IP Centres

One of those resources is the Business and IP Centre at the British Library in London which supports business owners, entrepreneurs and inventors with a comprehensive collection of databases and publications for free, as well as attend practical workshops, one-to-one advice sessions and inspiring talks. The Centre has a Facebook page, Linkedin group and twitter account.. There are also Business and IP Centres in Leeds Central Library which also holds a regular patent clinic, enterprise club and inventors' group and Sheffield Central Library which has Mr Roger Tipple, an innovator in residence, as well as inventors' club and patent clinic. I should add that I set up and chaired the Leeds and Sheffield inventors' clubs for many years and that that I also hold patent clinics at the Business Innovation Centre in Barnsley on the second Tuesday of every month.

Tip No. 7 - Think about the IP protection you need when drawing up your business plan

Patents are expensive to acquire, maintain and enforce and may not be what you need. In  order to obtain a patent you have to teach those with the relevant knowledge and skills ("skilled addressees") how to make or use the invention after the patent has expired, lapsed or been revoked. As patents are territorial anyone with such knowledge and skills outside the UK can make or use the invention unless you seek a patent for his or her country too. There are often better ways in which you can use your money. A good exercise when writing your business plan is to:
(1) identify the income streams for your business over the planning period;
(2) consider the threats to those income streams over that time;
(3) think about possible counter-measures to those threats most of which are going to be careful;
(4) if some of those counter-measures are going to be require an intellectual property right choose the one that is most likely to protect the income stream; and
(5) ensure that you have the funding to enforce your intellectual property right.

Tip 8 - Consider IP insurance

IP litigation is still expensive and most legal indemnity policies exclude it. However there are some brokers who specialize in such cover and can give you a very competitive quotation. You can also get policies to protect you against revocation or invalidity claims or actions by third parties for the infringement of their rights.

Tip 9 - Consider all funding options

For many years banks were the first and last port of call for inventors but it has now become increasingly difficult to raise money from them. There are now other options. You can raise capital through business angels, venture capitalists and crowd funding. You can raise working capital or other short term loans community development financial institutions such as the Business Enterprise Fund and peer-to-peer lenders.

Tip 10 - Take professional advice 

Professional fees can be expensive but you've heard the expression about spoiling the ship for a ha'p'orth of tar. If you need legal or other professional advice get in touch with me on 020 7404 5252 or through my message form and I will point you in the right direction.

Six top tips on how to avoid and resolve disputes as to who is entitled to a patent

A fair proportion of the disputes that the Comptroller (or chief executive officer) of the Intellectual Property Office has been asked to resolve since 1998 are entitlement disputes. 

What are "entitlement disputes?"
These are disputes over who is entitled to apply for a patent for an invention or who is entitled to a patent that has already been granted. These disputes can arise in a number of ways.  Folk who have collaborated in creating the invention may fall out over which of them of any is the real inventor of the invention or they may disagree as to the terms of their agreement to work together. The Intellectual Property Office offers a mediation service to resolve all kinds of intellectual property disputes but if the parties choose not to use it or if mediation fails then the Comptroller has a team of officials known as hearing officers who decide the dispute on his behalf in accordance with the Patents Act 1977 and the general law.

The Comptroller's Powers
The Comptroller can decide:

• who is entitled to apply for a British patent for an invention under s.8 of the Act;
• who is entitled to apply for a patent other that a British patent under s.12; and
• who is entitled to a British patent that has already been granted under s.37.

If he decides that a patent has been granted to, or applied for by, the wrong person he has a wide range of powers for putting things right.

Who can apply for a Patent?

Anyone can apply for a patent but s.7 (2) (a) provides that a patent shall be granted primarily to the inventor or joint inventors. However, that paragraph is subject to s.7 (2) (b):

"in preference to the foregoing, to any person or persons who, by virtue of any enactment or rule of law, or any foreign law or treaty or international convention, or by virtue of an enforceable term of any agreement entered into with the inventor before the making of the invention, was or were at the time of the making of the invention entitled to the whole of the property in it (other than equitable interests) in the United Kingdom."

Most entitlement disputes turn on who was the  inventor and whether there is a contract term or other rule of law that entitles someone other than the inventor to apply for a patent.

Who is the Inventor?
The first step is to determine who is the inventor.

S.7 (3) of the Act provides that an “inventor” in relation to an invention means the actual deviser of the invention.  That prompts the question "what is the invention?"  Although for most purposes that question can be answered by looking at the numbered paragraphs at the end of a patent specification known as "the claims" (see "How to read a Patent" 2 Aug 2013 IP London) that cannot apply to a patent application where there have been no claims or indeed where there is not yet even an application. In Markem Corporation and Another v Zipher Ltd. [2005] RPC 31, [2005] EWCA Civ 267 the Court of Appeal decided that the invention is the inventive concept and the inventor is the person who came up with that concept.  As Lord Justice Jacob put it at paragraph 101:

"It would be handy if one could go by the claims, but one cannot. s. 8 calls for identification of information and the rights in it. Who contributed what and what rights if any they had in it lies at the heart of the inquiry, not what monopolies were actually claimed."

The starting point may be the specification and the circumstances in which the invention was created. The inventor is the person who identified the problem and came up with a solution.

Is there any relevant Contract or Rule of Law?
The next step is to determine whether there is any contract or rule of law that entitles someone other than the inventor to apply for or be granted the patent.

The most common reason why someone else might be entitled to an invention is that the inventor was employed. S.39 (1) of the Patents Act 1977 provides that if the inventor was employed in a capacity in which he might reasonably be expected to invent something or if he was an executive director or had some other special obligation to further his employer's business then the invention and the right to apply for a patent for the invention  would belong to the inventor's employer. In all other cases the invention will belong to the employee.  However, that is subject to the terms of employment that the inventor and his employer have actually negotiated though it has to be said that most contracts of employment provide for the employer to take his employee's invention.

As that may be a little unfair where the employee is modestly paid and the employer earns a lot of money from the invention s.40 provides for employee to be compensated over and above his pay and perks where the invention is of outstanding benefit to the employer but that is a topic for another discussion.

It is important to note that self-employed contractors and consultants are not "employees" for the purpose of s.39 and there is no presumption that the person who commissions product design or development work gets the right to apply for a patent for an invention that may result from the work. If that is what the parties' wish they should set that out in their commissioning agreement. Many product design consultancies but nor all have terms and conditions that set out who is to own the intellectual property in their design and development work.

Essential Reading
The Intellectual Property Office has published a useful booklet entitled Patents Deciding Disputes which you should read before issuing proceedings.  You should also consult the Patents Act 1977, the Patents Rules 2007 and a series of directions on the conduct of proceedings known as Tribunal Practice Notices which are archived on the IPO's old website at the National Archives.

Procedure
The person who seeks a decision from the Comptroller under s.8, s.12 or s.37 of the Act is known as "the claimant". He starts the procedure by filling in Patents Form 2 and setting out his case in a separate document known  as the "Statement of Grounds" which are filed with the Intellectual Property Office.  If the other side ("the defendant") wants to defend the proceedings, that party will file a document known as a "Counterstatement" setting out the terms that are admitted, those that are not admitted, those that are denied and any special defence that is relied upon. The Statement of Grounds and Counterstatement are known as statements of case and examples of both statements of case are provided in the Patents Deciding Disputes booklet.

After statements of case have been filed and exchanged a hearing officer may produce a preliminary evaluation setting out the issues and how he expects them to be determined. This is not an official decision and the parties are free to disregard it if they so choose though if they do so unreasonably they may increase their liability to costs. The purpose of the preliminary evaluation is to facilitate negotiation or mediation including mediation by the procedure mentioned above.

If the parties cannot settle their dispute on of them may request directions at a hearing before a hearing officer known as a "case management conference" or "CMC" which can usually be conducted by telephone. The hearing officer will set out a timetable for the filing and exchange of evidence and such other directions as the parties may require. Evidence is normally filed by witness statement an example of which appears in the booklet.

Many disputes can be decided on paper without the need for a hearing and that will reduce the costs that the unsuccessful party has to pay. However, if there is a dispute over the facts or there are complicated arguments over the construction of a contract or the law a hearing may be ordered.  These usually take place with the hearing officer sitting at the Intellectual Property Office main office in Newport and the parties addressing him or her by video link but if witnesses have to be cross-examined the hearing officer will travel up to London or some other venue to conduct the hearing. In recent years I have represented clients in Leeds and Manchester as well as Newport and London.

The hearing officer usually delivers judgment some 6 to 8 weeks after the hearing.

Costs are awarded on a fixed scale which covers a modest proportion of the successful party's costs unless the hearing officer believes that a party has behaved unreasonably in which case he or she may award the successful party more.

Appeals from the hearing officer lie to the Patents Court which is part of the Chancery Division of the High Court of Justice.

Practical Tips for avoiding and resolving Disputes
Although less stressful than High Court litigation it is obviously better to avoid going to the Comptroller at all if possible.

1. Inventors should keep a notebook or other record in which they set out every step they take in identifying a technical problem and finding a solution. Ideally, the pages should be numbered consecutively and every entry dated, timed and signed. That helps the parties and, if necessary, the Comptroller and the courts to identify the invention and the person who should take the credit for it. It is a very useful discipline and it was a virtual requirement for an American patent when the US Patent and Trade Mark Office granted patents to the first to invent rather than the first to file.
2. If 2 or more people agree to collaborate whether as a research and development team, consultants or contractors or as investors it is a good idea to set out who is to own any patents or other intellectual property that may result from the collaboration and in what shares. You can do it yourselves but it would be safer to get a patent attorney or specialist solicitor or barrister who can accept instructions under the Public Access Rules to draw one up for you.
3. Product design and development consultants and companies that outsource a lot of their design and development work should provide for the ownership of any intellectual property that may result from such work in their terms and conditions of business or as the case may be terms and conditions of procurement. Such terms could also provide for cost effective dispute resolution procedures such as mediation and expert determination.  Again, that is something with which patent attorneys and other specialist lawyers including ourselves can help.
4. If a dispute does arise take specialist legal advice as soon as possible. A good lawyer or patent attorney can advise you of the strength of your case and your options for resolving the dispute.
5. As legal advice and representation can be expensive it often pays to get before the end legal indemnity insurance that covers intellectual property disputes. Most legal indemnity policies exclude such cover but there is a growing market for such insurance and premiums are beginning to fall.
6. Make sure that you are fully aware of the law relating to your business so that you can take key decisions in good time.  We hold regular seminars and publish briefings on all aspects of IP for business owners and managers as well as legal professionals.

Further Information

If you want to discuss any of these issues you can  call me during office hours on 01484 599090 during normal business hours or message me through my contact form. You can also get in touch through Linkedin, Facebook or twitter.