How can I protect my Idea for a New Service?

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Jane Lambert

Intellectual property law developed in the 19th century when the first industrial revolution was in full swing. An invention was necessarily a new product or a process for making products. Until the Trade Marks (Amendment) Act 1984 it was not possible to register trade marks for services in the United Kingdom. I remember accompanying the late Hugh Laddie to the Patent Office in 1984 when I was legal adviser to VISA International for Europe, the Middle East and Africa on an appeal against an examiner's refusal to grant VISA a trade mark for printed matter on the grounds that it was a roundabout way of obtaining a service mark for travellers' cheques.

The economic picture has changed a lot since then. Services now account for nearly 80% of GDP in advanced countries like the UK, France and the USA. But the law does not cater for innovation in services even though a new financial service using blockchain technology such as a new virtual currency can be every bit as ingenious as a new drug or communications device. One of the reasons why the law lags behind technology is that the leading industrial countries agreed to protect the intellectual assets of each other's nationals on a reciprocal basis in the Paris and Berne Convention of 1882 and 1886 because reciprocity requires such legal protection in all participating states to be approximately the same.

So when a client comes to me with an idea for an innovative new service his or her options are limited. It may be possible to patent a product or process used in delivering a new service such as a drone or even in some circumstances a software implemented invention but it is not possible in any country to patent a service as such. Even in countries like the United States where there is no equivalent to the statutory exclusions in s.1 (2) of our Patents Act 1977 the protection of methods of doing business has rolled back since the decision of the Supreme Court in Bilski v. Kappos, 561 U.S. 593 (2010).

Generally I advise a client to keep his or her idea to him or herself until he or she is ready to launch. If the client needs to talk to a contractor, collaborator he or she should do so in confidence. Every disclosure in confidence should be acknowledged in writing by the confident, recorded by the confider, closely monitored and strictly enforced. After the launch the idea will be in the open for anyone to see and, of course, imitate. Nevertheless, the innovator may still derive some advantage from being the first to market the service. Any reputation or goodwill accruing to his or her business can now be protected by registering the brand under which it is supplied as a trade mark.  All forms, manuals and other stationery used in the business will be literary works in which copyright will subsist automatically, If properly coordinated and supplied under a brand, the client may have a business format that can be franchised.

In its early days any business will be vulnerable to legal action either to enforce such IP rights as it may own or to defend a claim for their invalidation or revocation.  Even in the Intellectual Property Enterprise Court litigation can be ruinously expensive. Some form of IP insurance is therefore essential if it is to retain its market advantage.

I shall be talking about how to protect a service and other matters at Barnsley Business and Innovation Centre at 12:15 on 9 May 2017. If you want to attend that event you can do so by registering here.

Design Right: Albert Packaging Ltd. and Others v Nampak Cartons & Healthcare Ltd.

I've mentioned Judge Birss QC's judgment in Albert Packaging Ltd and Others v Nampak Cartons & Healthcare Ltd [2011] EWPCC 15 (2 June 2011) in IP Yorkshire because the defendant company is based in Leeds and was represented by a local law firm. This is an important case because it illustrates the limits of design right as a means of protecting investment in technology.

Why this case is important

In the last sentence of his judgement the learned judge held that the claimants had unregistered design right in the shape of their product in their assembled form and that it was "more likely than not" that that product was at least one of the sources of ideas for the defendant's products yet he found for the defendant. How could that be since s.226 (1) (a) of the Copyright Designs and Patents Act 1988 confers the exclusive right to make articles to a design on the owner of the design right? The judge's explanation was as follows:

"Design right is a right to restrain reproduction of the design by making articles to the design. That means copying the design so as to produce articles exactly or substantially to that design. When it comes to comparing the article alleged to infringe with the claimants' design in a case like this one, in which it can be seen that the article was in fact derived from multiple identifiable sources, it must be necessary to identify how much of the design of the article in question can be said to derive from the claimants' design."

He concluded that what the defendant's product owed to the claimant were the dimensions of the article which was not a substantial part of that design. To have found infringement given that all that had been derived were dimensions would have given design right to something that was no more than a method or principle of construction.

Method or Principle of Construction

I have italicized the words method or principle of construction because s.213 (3) (a) of the Act excludes those attributes from design right protection. There had been a corresponding provision in s.1 (1) (a) of the Registered Designs Act 1949 before the Registered Designs Regulations 2001 but there were not many cases on the point as it was rarely argued. The case most frequently cited was Moody v Tree (1892) 9 RPC 333 where Mr. Justice Vaughan Williams held that the pattern of a basket consisting of the osiers being worked in singly and the butt ends being outside could not be registered as a design. This case will be remembered for Judge Birss QC's explanation of the above italicized words in the context of unregistered design right.

Idea/Expression Dichotomy in Design Right

At paragraph [18] of his judgment, His Honour referred to the claimant's submission that

"although designs that serve purely functional purposes are not denied protection, it is important when identifying the aspect that is relied upon to have in mind that design right does not protect ideas per se (in the way a patent might) even though these ideas might have been important in arriving at the design in question."

He accepted that submission adding

"Design right only protects aspects of the actual physical manifestation of an idea."

Relying on Mr. Justice Mann's dicta in Rolawn Ltd and Another v Turfmech Machinery Ltd [2008] EWHC 989 (Pat) (7 May 2008) that "what is protected from copying in design right cases is the design, meaning the physical manifestation" and "not some underlying abstraction" and Lord Justice Neuberger's in Landor & Hawa International Ltd v Azure Designs Ltd [2006] EWCA Civ 1285 (28 July 2006) the judge propounded the following test:

"If it is possible to get several different appearances, which all embody the general features which he claims, then those features are too general and amount to a method or principle [of construction]. In other words, any conception which is so general as to allow several different appearances as being made within it, is too broad and will be invalid."

Comparative lawyers will immediately see the similarities between this and the somewhat cumbersome abstraction/expression filtration test in US copyright law best exemplified by Computer Associates International Inc. v Altai Inc. 982 F2d 693 (1992).

Is Design Right worth Having?

At paragraph [20] Judge Birss said

"This exclusion, and the 'interface exclusion', in s213 play an important part in the scheme of the 1988 Act by ensuring that design right provides a suitable amount of protection without unfairly restricting fair competition."

He is of course right but was that the intention of Parliament? In the white paper Intellectual Property and Innovation (Cm 9712) the government of the day considered whether a copyright based approach or utility models would best protect small businesses' investment in technology and design and opted for the former. Significantly, its example was followed by none of the other common law countries that had previously protected industrial designs by artistic copyright. Australia has opted for "innovation patents" and the Republic of Ireland for short term patents. With these and the other exclusions of s.213 (3), the availability of licences of right to anyone in the world including infringers under s.237, the qualification requirements that exclude designers in most industrial countries from protection under the Act not to mention the possibility of a threats action which did not exist under the 1956 Act, there does not seem to be a lot of point to design right. Hargreaves called for a fresh look at design right law (see "Does Hargreaves Say Anything New" IP/IT Update blog 24 June 2010) and on this if on nothing else his review is dead right.