Insurance · 27 February 2018

Small business intellectual property disputes reach record high

Intellectual property
The number of intellectual property disputes brought by entrepreneurs has risen 28 per cent in five years

Small business owners have never been more prepared to protect their firm’s assets, as new figures show a record number of intellectual property disputes brought to court in 2017.

According to research from legal firm Hugh James, 367 claims were heard by the Intellectual Property Enterprise Court (IPEC) in 2017 – a record high.

The IPEC is the specialist body set up to help small business owners protect their intellectual property (IP), and covers claims of up to £500,000.

Since relaunching in 2010, streamlined procedures have reduced time and overhead costs for entrepreneurs, encouraging them to bring claims forward. A £50,000 cap was also introduced on the amount of costs recoverable from the losing side.

The figures highlight an eight per cent increase on the 339 intellectual property disputes registered in 2016, which are up by 28 per cent in the past five years.

Responding to the figures, Tracey Singlehurst-Ward, partner at Hugh James, confirmed that small business owners were “increasingly showing that they are prepared to go all the way to the courts to protect their IP”.

She added that more and more technology companies were ready to challenge infringement in court.

“IP, as opposed to a tangible, physical product, is increasingly central to businesses’ brands, particularly in the technology sector. As a result, there is more at stake for companies to protect their IP, all the way to the IPEC if necessary. We have also seen a particular rise in the number of claims over trade mark infringements,” Singlehurst-Ward explained.

“While the large majority of SMEs who enter into a dispute over IP will settle out of court, there is still plenty of headroom for the number of disputes to grow. These figures represent just a small part of a much bigger trend of businesses being more proactive to protect their IP.”

“They were trying to intimidate my client.”

Our resident IP expert, Grid Law founder David Walker, told Business Advice how the IPEC’s costs cap had prevented a major UK retailer from bullying its way out of an intellectual property dispute with a client.

“I’ve recently settled a dispute where a major retailer was infringing my client’s registered design rights. They were trying to intimidate my client saying that costs were going to run to several hundred thousand pounds (which my client couldn’t afford), so were going to make a security for costs application.

“If successful, they would have stopped us starting legal action but because our claim fell within the IPEC limits and the costs cap was, at the very worst, £50,000, my client could afford this. We were therefore able to immediately shut down this argument and they became much more amenable to a settlement.”

Our recent webinar with David covered the basics of intellectual property for small business owners, helping entrepreneurs give their brand a competitive edge.

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ABOUT THE EXPERT

Simon Caldwell is deputy editor at Business Advice. He has a BA in politics and communications from the University of Liverpool, and has previously worked as a content editor in local government and the ecommerce industry.

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