Is intellectual property protection really too expensive, and or the threat too low?

The actual Oscar Wilde quote is: “Imitation is the sincerest form of flattery that mediocrity can pay to greatness”, which reveals he was actually being ironic, and that his true meaning was to demean those who copy. He would have made a convincing IP attorney.

Registered intellectual property rights have an apparently singular purpose, which is to give their owners the power to prevent their inventions, designs, brands and original content from being ripped-off. If you have a new invention you obtain a patent for it, which gives you a monopoly right to use the invention. Likewise, if you have a brand name you obtain a trade mark registration for it, which gives you the exclusive right to use that brand in trade.

However, the numbers of businesses which don’t bother to obtain such protection is alarmingly high, in particular in the UK, which drags somewhat behind other Western nations in this regard. Usually the excuse is that its too expensive, or that the threat is too low. Neither of these things is actually true, but such concerns clearly lead many to turn away from IP protection. This is a problem because any business which ignores IP misses out on a number of ancillary benefits.

The most important secondary reason to own IP rights is to add intrinsic value to your business. If you ever want to sell up, then a viable exit strategy can only be based on a well organised business with all its ducks in a nice neat row. If IP rights such as trade mark registrations, design registrations and patents are not in place when they should be then that’s one fat duck out of line. The diligence done by the potential purchaser’s lawyers will quickly spot this, and it will bring the offer down, or worse scupper the deal completely.

The same thing is true if you are seeking investment. One of the very first things an investor will ask is whether you have the monopoly rights needed to protect future growth. No-one will want to invest in your business if it can easily be copied. This particular question never seems to be about drilling down into the finer details of what exactly is protected, rather it is high level tick-box exercise. Investors want to see those ducks in a row, and if they are all present and correct they are usually happy.

Whether you’re into protecting your own intellectual property or not, you still have to be wary of what your competitors have got. If you’re in business, then you’re playing the IP game regardless. Every business has a name, and you need to make sure yours is not too close to someone else’s. If you sell complex products they you need to know if they infringe your rival’s existing patents. If you don’t think IP is for you, then you might be overlooking the dangers. However, if you do actively seek your own rights then you find out about potential risks as part of that process. A trade mark application is a diligence exercise in itself, as any third party with a prior interest in the mark will come froward to challenge you. Patent applications necessarily involve a search to determine if the idea is new, which can reveal relevant patents out there. Therefore, engaging with the IP system is not just about securing your own rights. It is also a prudent defensive strategy against being sued.

Finally, beyond the value proposition they represent on their own, registered IP rights can also generate value in other ways. The exclusive rights they define can be licensed to open up revenue streams. This forms the basis for some major business models – microchip technology in particular – but it can work for any innovative business sitting on technology others want to use. There are also considerable tax benefits to IP ownership. The most notable of these is Patent Box, which halves the tax you pay on revenue generated from the sale of patented products. This can be worth far more than the cost of obtaining and maintaining such rights.

So, rather than mis-quote Wilde and regard imitation as flattery, any business should actually recognise its own greatness and do whatever is necessary to defend it from the mediocre. Not just to prevent copying, but because it adds value, increases your situational awareness, can generate an income and save you tax.

Jerry Bridge-Butler is a UK Chartered Patent Attorney and a European Patent Attorney, as well as a UK Chartered Trade Mark Attorney.

A graduate of the University of Wales, Jerry joined G. F. Redfern & Co in 2000, becoming a partner there in 2006. He then joined Baron Warren Redfern as a partner in 2008. His patent work is mainly in the field of mechanical engineering and electronics, and his trade mark work includes prosecuting UK and international applications, and protecting the trade mark portfolios of a number of well known brands. He is responsible for dealing with new client enquiries at Baron Warren Redfern, and has in-depth experience in IP protection strategies for start-up companies in particular. Jerry is a member of both CIPA and CITMA, and is Chairman of the CIPA Media and PR Committee. He has assisted the UK IPO with developing various business outreach tools, such as IP Equip and IP Tutor, and manages CIPA’s IP diligence and pro bono work for the Earthshot Prize.