Summer 2009

Rainy Day IPWith the economic weather looking gloomy for now, we ask what strategies can firms employ to maximise the cost effectivenessof their intellectual property?

IPReview

R:IP? Does recession signal

the death knell of R&D and IP spending?

Marriage ofInvention

The secrets of what makes a successful

patent attorney/inventorpartnership.

Page 3Rainy Day IPWhat strategies can firms employ to maximise thecost effectiveness of their intellectual property?

Page 6Hue’s brand is it anyway?Colour talks when it comes to brand recognition.

Page 7Employee inventors reap“Outstanding Benefit”Two research scientists receive a payment of £1.5 million.

Page 8R:IP?Does recession signal the death knell of R&D and IP spending?

Page 10Keeping costs down at the EPOEnsuring patent applications are prosecuted cost-effectively.

Page 12Marriage of inventionUncovering the secret of what makes a successfulpatent attorney/inventor partnership.

Page 14Budget fails to inspireInvestment in environmental technologies notenough to spark innovation.

Page 15No more long division at the EPOThe EPO has announced changes to the rulesrelating to the time for filing divisional patentapplications.

Page 16Withers & Rogers newsLatest news from Withers & Rogers.

Contents

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Summer 2009

Cost Reduction Measures

With credit difficult or downrightimpossible to obtain and expensive inany case, any spending on a firm’sexisting IP portfolio has to be reviewedto ensure money is not being spentmaintaining protection which is nolonger needed.

A first step should be to review theextent of territorial cover and considerwhether protection is genuinelycommercially useful in each country. In most countries, patents require thepayment of annual fees to keep inforce. It may be that some territoriesare no longer of interest and thatsubstantial savings can be made byretrenching to a core group ofcountries.

It is equally important to consider theproducts covered by patents in the

portfolio. Often, the market hasdeveloped to such an extent that apatent obtained ten years ago, whilststill potentially in force for anotherdecade, no longer providescommercially useful protection.

Some territories, including the UK,allow a patent proprietor to designatethat licences are available as of rightunder the patent. That designationresults in a reduction of the annualmaintenance fees payable, usually by50%. This is one way in which non-core patents can perhaps bemaintained when they might otherwisebe allowed to lapse.

In relation to pending applications,costs can be reduced in the short termor deferred to a later date by usingappropriate tactics. Using theinternational patent application processpushes back the date when decisions

With the economic weather looking gloomyfor now, we ask what strategies can firmsemploy to maximise the cost effectiveness of their intellectual property? Here, DaveCroston considers ways to buck the credit crunch.

Rainy Day IP

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Rainy Day IP cont...

Probably the mostvaluable commoditythat any business has atits disposal is theintellectual capital ofits employees. Inrecessionary times, therisk of that capitalbeing diminishedthrough redundancy isvery much increased.Carrying out a keyknowledge audithighlights wherevaluable knowledgeexists within a business.

“”have to be made about foreign patentfiling by 18 months. Extensions of time torespond to patent office letters areavailable, usually for a small fee,deferring the cost of responding. Thesemeasures help delay costs in cases whichare already pending, but what aboutdevelopments in the pipeline?

Expenditure on IP protection for suchdevelopments should focus on thoseclosest to market, where the return on theinvestment in IP is more immediate. Thekey is to look at the improvements toexisting products that are coming throughand focus efforts there rather than seekingprotection for blue-sky development thatmay not be ready for launch for someyears.

That said, such middle or long termdevelopments should not be overlooked,but by ensuring that strong measures aretaken to ensure confidentiality of thoseprojects, the immediate need for patentfiling is obviated.

That brings us to the next action that canbe taken to improve your IP health intough economic times.

Take Stock

Review not just your existing registered IPportfolio but consider also theunregistered rights that you may own.Technology businesses generateunregistered IP every day. Whether it isunregistered UK or EU design right in theshape of a new product, copyright insoftware code or installation instructions,database right in customer lists,technological know-how in the heads ofproduction staff or goodwill in the nameof the company, these are all rightsestablished by statute or by common lawand which form a significant part of thevalue of a business.

Probably the most valuable commoditythat any business has at its disposal is the

intellectual capital of its employees. Inrecessionary times, the risk of that capitalbeing diminished through redundancy isvery much increased. Carrying out a keyknowledge audit highlights wherevaluable knowledge exists within abusiness and can begin to reduce the riskassociated with losing those key peopleby codifying the information andclarifying that it is proprietary to thebusiness.

Such audit processes are probably beingcarried out in relation to other aspects ofthe business to ensure that maximumvalue is being derived from its assets soan IP audit should not be viewed assomething unusual but rather just anatural part of the overall stocktakingprocess.

Leverage Profit

The aforementioned measures mayreduce costs or help to catalogue whatintellectual capital is owned by thebusiness, but true value is achieved onlywhen the intellectual assets are put towork to generate additional profit.

The review of the existing portfolio mayhave revealed that part of the registeredIP portfolio is no longer core to thebusiness. Rather than allowing thoserights to lapse, seek to leverage valuefrom the IP. Look for potential purchasersor licensees of your technology.

Licensing-out existing technology mayresult in a flow of royalties but may alsoresult in selling of consultancy forexploiting the know-how around theinventions. If the technology has beendeveloped into a product already, it maybe supported by registered orunregistered designs and a brand withregistered trade mark protection, allowinga licensee or purchaser to take on aturnkey solution for more immediatereturns.

Review not just your existingregistered IP portfolio butconsider the unregisteredrights that you may own.

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Summer 2009

Often, a thorough knowledge auditreveals various possible developmentsthat were previously suppressed andwhich can be exploited quickly toincrease profit from existing products,either from improvements to the productitself or from efficiency improvements inmanufacture.

Competitor Review

Recessionary times produce a morechaotic, unpredictable environment inwhich to trade. Whilst this presentshurdles, it also provides opportunities tothe quick-witted. The same is true inrelation to IP.

Stronger competitors may seek toinnovate out of recession, looking tosteal a march on their weakercounterparts when the economicconditions improve. Keep a close eye oncompetitor activity. Patent applicationsare not published until 18 months afterfiling but even that information canreveal the direction of progress beingpursued. By gaining strong intelligenceon past inventive activity, and with alittle thought, future developments maybe predicted. By seeking to protect suchdevelopments pre-emptively, businessescan gain considerable advantage overthose competitors.

Weaker competitors may seek to imitatesuccess so it is important that a carefulwatch is kept on them to ensure thatattempts to “coat tail” are dealt withquickly and forcefully. In times of

economic difficulty, new entrants tomarkets may be less respectful of any status quo established with reference tomore long standing competitors. Thejohnny-come-latelies tend to have lessconcern for IP and are more interested inquick profit. Acting strongly against suchnewcomers is very important to prevent ashrinking pie being shared ever wider.

The weakest competitors may present abusiness with the best opportunities.Failing companies may produce a gap inthe market to be filled. Recognise thatsuch organisations may have IP thatpreviously protected their market. SuchIP may be available for purchase eitheras a fire sale item or, after the doors haveclosed, from a receiver or administrator,seeking to realise whatever value theycan for the creditors in as short a time aspossible. Sweeping up this “distressed IP”can grant a business the keys to aprotected area of the market that theycould not previously access.

Summary

• Review existing rights and focus spending on core activities.

• Take stock of all of your intellectual capital, not just the registered rights.

• Seek to leverage profit from that capital, including possible licensing out or sale of non-core IP assets.

• Watch strong competitors to determine direction of their innovation.

• Watch weaker competitors for signs ofcopying and act quickly to prevent it.

• Seek “distressed IP assets” to expand into market areas previously denied.

Although the measures described couldbe said to apply even when the economicoutlook is sunny, they are particularly aptin the current cloudy circumstances.

For further information contact:Dave Crostondcroston@withersrogers.com

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olour is the strongest visualelement of a trade mark, saymarketing professionals.However, the majority areunaware they can legally

protect the colour of their brand. In a pollof marketeers, 64% of respondents ratedcolour more important than a slogan,typeface or logo shape. The brands with thehighest colour recall are AA for its yellowand black (98%) and Easyjet for its orange (93%).

Other brands that are well known for theircolours include Cadbury’s purple (88%),BP’s green (88%) and the Royal Mail’s red(85%). Despite the prominence thatmarketeers place on the colour of a brand,it is rarely registered for trade markprotection, partly because such protectioncan be difficult to obtain.

Cadbury’s, which scored highly for colourrecognition in our research, is one of fewUK companies that has protected thePantone reference of its ‘purple’, and it didso retrospectively, by demonstrating itsconsistent and prominent use over anumber of years. Bearing in mind the

importance of colour, marketeers involvedin brand development would be wise toconsider use of colour when seeking trademark protection.

Almost all respondents correctly recognisedthat the name of the brand or product(98%), as well as the logo design (90%) canbe registered for trade mark protection, butmany were unaware that other elementscan be safeguarded.

For example, 80% of respondents didn’tknow that a smell can be registered fortrade mark protection and 65% didn’tknow that sounds can be protected.

Most marketeers understand that peoplerespond to brands emotionally and it is

surprising that so few are aware that theycan seek trade mark protection for abrand’s sensory attributes. With millions ofpounds spent on brand development withinglobal corporations and the influence ofmarketeers growing at boardroom level,there is an opportunity to prioritise trademark protection further.

In times of recession, brand ownersbecome vulnerable to “me too” products,and one way in which that manifests itselfis in copyists adopting similar colourschemes. Although obtaining trade markprotection for colours is not straightforward,once achieved it can act as a powerfulprotector of the overall brand image andprevents the lookalike product fromcompeting visually on the shelves.

Hue’s brandColour talks when it comes to winning brand recognition, according tonew research by our trade mark group.

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is it anyway?

..it is surprising that so few areaware that they can seek trademark protection for a brand’ssensory attributes

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Feature

For further information contact:Fiona McBridefmcbride@withersrogers.com

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Two research scientists, James Duncan Kelly and Kwok Wai Chiu, were awarded apayment of £1.5 million by the High Court in February 2009. Kelly and Chiu’schampagne moment came when The Honourable Mr Justice Floyd granted theirapplication against GE Healthcare for compensation in relation to patents owned by thehealthcare giant for inventions made by Kelly and Chiu.

elly and Chiu were employed as research scientists byAmersham International. In the late 1980s they successfully synthesised a compound called P53. P53became a key component of a patented radioactiveimaging agent (“Myoview”) which proved to be a very

successful product for Amersham, and latterly for General Electricwho took over Amersham (which thus became GE Healthcare)after the invention was made. Indeed, by 2007, Myoview hadgenerated sales worth over £1.3 billion. Such was the scale of thissuccess that Drs Kelly and Chiu sought compensation fromAmersham/GE Healthcare under section 40 of the UK Patents Act1977 (UKPA). The case was heard in the High Court by Mr JusticeFloyd.

There was no question that GE Healthcare owned the patents.However, Section 40 provides employee inventors with a means ofobtaining just recompense for generating patents which are of‘outstanding benefit’ to their employers. The section was notoriousin that, until the present case, no successful action had beenbrought by an employee using these provisions (although somecases have been settled out of Court). This has mainly been due tothe difficulty in proving that a patent itself has been of outstandingbenefit.

It was held that the patents were of outstanding benefit toAmersham (the employer) and that Drs Kelly and Chiu wereentitled to compensation. In determining that the patent was of‘outstanding benefit’, Floyd J found that, by being able to keepcompetition at bay through the monopoly rights granted under theterms of the patents, Amersham enjoyed increased sales and wereable to negotiate corporate deals from a stronger position. Floyd Jdecided that, taking all of the facts into consideration, the patentshad been worth £50 million to GE Healthcare. From the facts ofthe case, there seemed little doubt that the product to which Kellyand Chiu’s invention contributed had been extremely successful.Kelly and Chiu succeeded in bridging the gap between thetechnical (the invention), the legal (the patent) and thecommercial. It was held that the employee’s share of the value of apatent might, in principle, lie between 0-33% or beyond.

However, in this case, a figure of 3% was considered just and fairon the facts of the case. Dr Kelly was granted £1million, while DrChiu was granted £500,000.

Section 40 was amended in 2005 to make compensation payablewhen either the invention or the patent has been of outstandingbenefit. This is expected to increase the success rate for actionstaken under this provision. However, as this ‘new law’ onlyapplies to patents applied for after 1 January 2005, the presentcase was decided under the ‘old law’. Action can be taken undersection 40 from the date on which a patent is granted until up to ayear after the patent lapses. Accordingly, the ‘old law’ willcontinue to be relevant for a number of years to come. It remainsto be seen whether Mr Justice Floyd’s decision will emboldenother employee inventors to claim under Section 40.

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Employee inventors reap

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For further information contact:Nicholas Jonesnjones@withersrogers.com

Summer 2009

“Outstanding Benefit”

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R:IP?Does recession signal thedeath knell of R&D and IP spending?

or a long time, the “R” word was taboo asfar as the UK economy was concerned.Economists, politicians and bankers queueup to say sorry but to admit or even suggest

that the economy might shrink for six months isbeyond the pale. Until, that is, the economyshrinks for six months and then the euphemisms -downturn, slowdown, crunch - disappear and it’sokay to call a recession a recession. But the truth isout and we all know that we are well and trulyamidst not just a UK recession but a global one.

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Those with an interest in R&D and thedevelopment of new technology maywonder what is likely to happen to R&Dand IP spending during such extremecircumstances. Will the taps be turned offon R&D spending or will their businessbuck the trend and seek to innovate out ofthe slump?

Looking back at the last UK recession (fromQ3 1990 to Q3 1991), economic statisticsshow that GDP fell by 2.6%,manufacturing output by 7% and R&Dspend by 8%. Although patent filings at theUK Patent Office (or UKIPO as it is nowknown) were on a long term downwardtrend by the time the 90-91 recession hit,the drop in R&D spend was not matchedimmediately by a fall in the number ofpatent applications. Filings held up in 1991and then fell in 1992. Likewise, the surgein R&D spend, which began in 1997 wasagain lagged by patent filings at the UKpatent office by 12 months.

There are good, albeit circumstantial,reasons for this lag. Companies do notsimply shut off their R&D pipeline whenthe economic waters get choppy but theymay focus on projects that are closer tomarket, those more likely to generate moreimmediate revenue. Such projects wouldrequire more immediate patent filings toavoid a loss of rights when the productsare launched. By focusing on moreimmediate activity, initial filing numbersare maintained for a short time.Eventually, the flow of new developmentsneeding protection begins to fall.

Once the prospects begin to improve andR&D funds are more available, there is anatural inertia before projects aredeveloped to the point where patent filingsare justified.

So what of the credit crunch recession, thefirst recession of the new century in an eraof globalised, intertwined economies?There are some significant differencesbetween the circumstances of the 1991-2recession and those of the 2009-10recession.

Three factors suggest a greater impact on IPfilings. Firstly, whilst interest rates were

historically high in 1990-1, credit remainedavailable. In the current circumstances,even very sound businesses have foundcredit hard to come by. In simple terms, inthe 90s recession the oil in the economicmechanism was costly but availablewhereas now it has run dry.

Secondly, this recession is also marked byits extent, affecting countries the worldover, a product of the global interlinking offinancial institutions. UK plc cannot relyon other countries still growing to pull itout of the slump.

Thirdly, the UK has a very large financialsector that has been affected to a greaterextent than other sectors so the UK may bedisproportionately affected.

Having said that, there are various factorswhich suggest the opposite! The mostseriously affected sectors of the economy,financial and retail, are not substantialgenerators of patentable inventions.

Over the last ten years, the substantialinvestment made in science andtechnology has been an attempt to build aknowledge based economy where theneed to innovate is central. Linked to thischange is a greater awareness andappreciation of the significance of IPprotection in a world where technologicaldevelopment can be reproduced atincredible pace.

In the present circumstances, for thoserunning businesses based upontechnological innovation, there are hardchoices to make. Cash may be king butcutting R&D and IP spend at this time risksmissing an opportunity. Recessionarycircumstances present threats to businessbut also opportunities as weakercompetitors either fail altogether or

retrench development to allow for costcutting. Pushing ahead with developmentcan position a business well for the upturnbut businesses must couple innovationwith protection to ensure that efforts tocreate new products are not hijacked byopportunist copyists.

Ask a marketeer what innovation providesand they will say: “a gap in the market or anew market altogether, a unique sellingproposition, a reason for a customer to buyour product over someone else’s”.Spending to protect the fruits of thatinnovation shores up that market positionat a time when the market is less crowdedas weaker competitors fall by the wayside.

Being aware of your competitors’ IP is evenmore important in the currentcircumstances. Conventional wisdom has itthat companies are more apt to enforcetheir IP rights in difficult economic timesbut in addition to the threat there isopportunity. The failure of a competitormay suddenly open up a market areawhich had previously been closed off andthere may even be a chance to obtainuseful IP cheaply by purchasing distressedIP assets.

The key is to use the R&D and IP spendwisely. Elsewhere in this issue we havevarious suggestions for using IP spendmore effectively to ensure that newdevelopments can be protected effectively.Of course you can contact your Withers &Rogers attorney if you have any questionsabout using your IP spend to best effect inthese difficult circumstances.

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Cash may be king but cutting R&D and IP spend at this time risks missing an opportunity

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Conventional wisdom has itthat companies are more aptto enforce their IP rights indifficult economic times

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For further information contact:Dave Crostondcroston@withersrogers.com

Summer 2009

ecent fee changes and the slide inthe value of Sterling against theEuro have seen the cost ofprosecuting European patentapplications rise for UK

businesses over the last few months. WithIP budgets coming under pressure in thecurrent economic climate it is moreimportant than ever to ensure that patentapplications are prosecuted in a costeffective manner. Here are a few areaswhere we can help you save money onEuropean cases without compromising yourprotection.

Drafting to avoid excess fees - We canminimise the effects of the fee changes bycareful drafting of the patent application.The EPO fee structure penalises theinclusion of lots of dependent claims.Careful drafting can avoid the need for lotsof claims without affecting the scope ofprotection.

Avoiding fees for late instructions - Annualmaintenance fees are payable on pendingEuropean patent applications. The fees canbe paid up to six months late but last yearthe EPO increased the late fee from 10% to50% of the fee due.

Our associated renewals firm Withers &Rogers Renewals LLP can assist - providingautomatic reminders to help avoid late fees.If you have previously relied upon theextension period, it is going to cost a lotmore. Let us help you avoid those costs.

There are other areas where timelyinstructions can avoid unnecessary fees.Work with your Withers & Rogers LLPcontact to ensure that responses to officialletters are prepared and filed in good timethus avoiding further processing fees.

Advice on EP validation strategy - When aEuropean patent application is granted it isnecessary to validate the patent in theterritories of interest to the applicant.Validation formerly required the filing of afull translation of the granted patent intothe local language at the national patentoffice concerned. From May 2008, anumber of countries, signatories of the so-called London Agreement, reduced orabolished altogether the translationrequirement in their country. There arecurrently 14 such countries although newsignatories are expected to join. When yourEuropean patent application is approachinggrant, ask for an up-to-date list of the London Agreement countries and see if you can make savings in thevalidation of the patent.

Online filing - We have been successfullyusing the European Patent Office’s onlinefiling system during patent prosecution forsome time. The system provides a highlevel of certainty and security to patentfiling procedures. Clients also benefit froma reduction in some EPO filing charges.

The range of documents that can be filedelectronically in the EPO has recently beenextended to cover the filing of documentsin Opposition, Appeal and Reviewproceedings. This development also meansthat online filing is now possible for allEPO procedural steps.

Videoconferencing for hearings - Ourinvestment in technology can assist inreducing costs in other areas too. We havestate of the art videoconferencing (VC)facilities in each of our offices.

It is the practice of the EPO to appoint ahearing, known as Oral Proceedings, whenthe examination of an EP application hasreached an impasse. Such a hearing mustbe requested by the Applicant and it iscommon practice to make a precautionaryrequest when filing a response to anexamination report.

The hearing has, until recently, had to beconducted in one of the offices of the EPO,typically in Munich or the Hague, whichnecessitated the EP attorney having to attend in person. The EPO is typicallyrepresented at the hearings by a three

Keeping costs down

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at the EPOOn any measure the European patent system has been very successful. Averaginggrowth in filings of around 10% year-on-year since its foundation in the 1970s,the European Patent Office now receives 146,500 applications per year.

We can minimise the effectsof the fee changes by carefuldrafting of the patentapplication

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person Board comprising the Primary andSecondary Examiners and a “Rapporteur”.At the conclusion of the hearing a decisionis taken on whether to allow or refuse theapplication.

The need for the EP attorney to attend inperson has now changed and the EPO arenow prepared to conduct certain ExaminingDivision Oral Proceedings by VC. In 2006the EPO published guidance concerninginterviews and Oral Proceedings held byVC. In the event of a request to conductOral Proceedings by VC, the EPO willdetermine whether or not it is appropriatefor the application in question and, ifappropriate, appoint a hearing date andtime. The EPO has VC studios in Munich,The Hague and Berlin. No fee is chargedby the EPO for conducting interviews ororal proceedings by VC but theApplicant/Representative are expected tobear their own transmission costs.

We recently conducted Examination OralProceedings by video conference on behalfof a Japanese Applicant. The request for VCOral Proceedings was made in response tothe receipt of a conventional summons toattend Oral Proceedings at the EPO'soffices in Munich. We submitted ourrequest to hold the proceedings by VCshortly after receipt of the summons.

This resulted in the cancellation of theoriginal summons and the subsequent issueof a VC specific summons for the sametime and date.

The hearing resulted in the patentapplication being deemed acceptable forgrant. From start to finish, including thebreaks, the hearing took just under twohours.

In many cases attendance at OralProceedings by VC is significantly moretime and cost effective than appearing inperson.

...the EPO are now preparedto conduct certain ExaminingDivision Oral Proceedings byvideo conference

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For further information contact:James Grayjgray@withersrogers.com

Summer 2009

Marriage of

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he partnership that exists betweenthe engineer and the patentadviser is increasingly important indetermining the success ofcorporate innovation strategies.

However, the relationship is not without itstensions. So what makes a successfulmarriage of invention?

A common instruction received by a patentattorney is one that comes out of the blue,accompanied by an urgent request to file apatent application as soon as possible. Thisshould tell us something about the natureof some businesses’ relationship with theworld of patent protection.

This is how the story usually goes. Amember of the sales team visits theresearch and development department tofind out more about what’s going on. Whilechatting to an engineer, the salespersondiscovers that work is underway to developan improved product with some highlymarketable new features. When meeting akey customer the next day, the salespersoncan’t resist telling them about this exciting

new development and without thinking theentire research proposition has beendisclosed and as a result rendered itunpatentable.

Another common way that valuableresearch is disclosed unintentionally is atexhibitions and trade fairs or in conferencepapers, perhaps prepared by academics,and circulated to delegates at events.

In such circumstances, the patent adviserhas little option but to inform the companythat it is already too late. The researchwork is already in the public domain andunfortunately, it is not possible to turn backthe clock. Even if the Intellectual PropertyOffice (UKIPO) is unaware of the disclosureand protection is granted, a singlechallenge could be sufficient to invalidatethe patent. A little loose talk or a show ofacademic prowess could end up costing anorganisation dearly.

Having an ideaThe best time for the patent adviser and the engineer to get together is actually

before the idea has even been conceived.The most successful patent partnerships –those that work most efficiently and delivermost commercial value – operate acarefully managed invention process fromthe outset. While we may like to think ofinventors as Newtonian individuals, inquiet contemplation waiting for the appleto drop, the act of invention is in fact a farmore commercial process, which involvesdeveloping practical applications andsolutions to technical problems.

The extent of the patent adviser’s role inthis process can easily be overlooked. Forexample, one key way that the patentadviser can help is by letting the engineerknow when an invention is worthprotecting. Engineers and their peer groupare not always the best judges of aninvention’s patentability. After all, they aredealing with inventions every day and tothem a technical development can seemlike a relatively small step forward, whileits commercial potential could be huge if itgives an existing product a new uniqueselling point. Working closely with thepatent adviser at an early stage, can makethe assessment of patent-worthy projectsmuch more effective.

The patent adviser can add value at theconception stage in other ways too.

Karl Barnfather uncovers the secrets of what makesa successful patent attorney/inventor partnership.

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a little encouragement in theform of a well-constructedinvention reward programmeis usually helpful

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Maintaining a dialogue with the patentadviser means the engineer has access toinformation about other related patentapplications and this information can beused to direct research and developmentactivity to areas where their inventions arelikely to be most commercially viable. Insome cases, the patent adviser is also ableto provide valuable information on new‘standards’ in emerging fields, such asmobile telephony or digital audio visualtechnology. This will help to ensure thatany innovations under development arecompatible with the dominant usertechnologies.

Encouraging internal disclosureMost companies involved in research anddevelopment activity are aware thateffective patent protection relies upon thetimely internal disclosure of inventions.Engineers appreciate this too and a littleencouragement in the form of a well-constructed invention reward programme isusually helpful.

At Withers & Rogers, we have recentlyundertaken research among companies in avariety of industry sectors, which hasconfirmed that invention reward schemesare widely used. Individual rewards canvary between a few hundred and severalthousand pounds and the value of cashincentives climbs according to the stagethat the invention has reached – forexample a reward for grant of a first patentis usually significantly higher than a rewardfor an initial disclosure.

Once an invention has been disclosedinternally, the next step is to decide howbest to exploit it. There are a range ofoptions to consider and each requires a slightly different approach in terms of

patent protection. Firstly, the inventioncan be sold in orderto generate a return onthe company’sinvestment in researchand development activity.

Alternatively, the invention can be licensedto a third party, backed by a licensingagreement, or the invention can be madeand then licensed to the third party – anoption which often requires the greatestinvestment in exchange for highercommercial rewards. Of course, manychoose to use the patent to secure a marketto manufacture and sell the productthemselves.

Regardless of which option is chosen, thisis the end game for the patent partnership –the point at which the company realises thevalue of its investment.

Removing barriersEven when the invention process is tightly-managed and an invention reward schemeis in place, engineers can occasionally failto disclose their inventions appropriately.For the company involved, this is cause forconcern and in some cases, such failurescould be prevented by increasing the level

of interaction between the engineer and thepatent advisory team.

It is not unusual for companies to preferthat the patent adviser is kept at arm’slength from the engineer in order to avoiddisrupting research activity. For establishedcompanies, with well-managed inventionsystems, this approach can work well andhelps to ensure that interactions with thepatent advisory team are kept to aminimum. However, there are inherentrisks in taking this approach and for mostinnovation-led businesses operating in fast-moving technological fields, a closer andmore regular dialogue is usually beneficial.

Like-mindsThe most successful patent partnerships arethose where the engineer and the patentadviser share a passion for invention and adepth of knowledge of the specific area oftechnological research. By working closelytogether to manage and harness the valueof inventions and advise on the strategicdirection of research and developmentactivity, this ‘marriage of invention’ willdeliver lasting business value.

Once an invention has beendisclosed internally, the nextstep is to decide how best toexploit it

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For further information contact:Karl Barnfatherkbarnfather@withersrogers.com

Summer 2009

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ntion

In the budget, it was announced that the government willinvest £1 billion to help combat climate change bysupporting low carbon industries to help the UK meet itsfirst carbon reduction target of 34% by 2020. A further£2.5bn would be available for business to encourageinvestment in sectors such as advanced manufacturing andlow-carbon technologies.

Such measures don’t go far enough.

There is a potential ray of hope in that the need forinvestment in advanced manufacturing and the low-carbonindustries is being heeded. However, the level of investmentannounced today falls short of the level required toencourage innovation in this area. If we are going to growas an economy we must continue to innovate, andincentives such as the extension of tax credits on research

and development to cover the costs associated withprotecting the fruits of that innovation would have moreimpact.

This budget is uninspiring for businesses and represents alack of recognition of the importance of IP to building a trueknowledge-based economy in the UK. There was not asingle UK business in the top 50 filers of internationalpatent applications in 2008 and UK plc was static againstdouble-digit filing growth from China, Korea and Sweden.We need to address this quickly if we are to achieveenhanced global competitiveness.

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News

Investment in environmental technologies notenough to spark innovation.

For further information contact:Adrian Chettleachettle@withersrogers.com

Budget fails to inspire

NewsSummer 2009

No more long divisionat the EPO

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In the latest of a series of rule changes aimed at reducing the workloadof their Examiners, the EPO has announced changes to the rules relatingto the time for filing divisional patent applications.

For further information contact:John Jonesjjones@withersrogers.com

A divisional patent application is like aclone of the so-called “parentapplication”, bearing the same filingdate and applicant details. They aretypically used where an applicationcontains various different inventiveaspects, to pursue independentprotection for those separate aspects.

Before the change to the rules, adivisional patent application could befiled from any pending European patentapplication.

The only deadline that needed to bemet was the date of grant, lapsing orrefusal of the parent application.However, there was a growingperception that the opportunity to filedivisional applications while anyapplication was pending was leading toabuse, with some divisionals beingfiled over ten years after the initialparent application was filed.

The EPO have amended the rules toinsert an additional deadline for socalled “voluntary divisionals”, i.e.those filed by the applicant of theirown volition. The “voluntarydivisional” deadline is the earlier of thedate of grant, lapsing or refusal of theparent application or two years from

the date of the first ExaminingDivision official letter on theparent application or any otherapplication in the same family!Separate rules have been setdown for so-called “mandatorydivisionals”, where therequirement to file the divisionalis created by an objection madeby the EPO.

The full details of the rulechanges can be found on theEPO website at:http://www.epo.org/patents/law/legal-texts/decisions/archive/20090325.html

The new rules will curtail theopportunity to make divisionalfilings many years after theinitial application and shouldreduce the uncertainty that iscreated for interested thirdparties when multipledivisional applications arefiled. However, this changeremoves a powerful tool fromthe hands of patent proprietorsseeking to pursue infringers.

LondonGoldings House2 Hays LaneLondonSE1 2HW UK Tel: +44 (0) 20 7663 3500 Fax: +44 (0) 20 7663 3550

Midlands Nicholas Wilson House Dormer PlaceLeamington Spa Warwickshire CV32 5AEUKTel: +44 (0) 1926 310700Fax: +44 (0) 1926 335519

Bristol1 Redcliff StreetBristolBS1 6NPUKTel: +44 (0) 117 925 3030Fax: +44 (0) 117 925 3530

The information contained in Withers & Rogers LLP IP Review is only a general summary of the topics covered and is not necessarily applicable to particular circumstances.Professional advice on a particular case or further details or comment may be obtained from our offices, the addresses of which are given above. © Withers & Rogers LLP 2009

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Contacting Withers & Rogers

We are delighted to announce thepromotion of four of our attorneys topartners in the firm.

Based in London, Rachel Wallis worksin the area of life sciences andchemistry. Tania Clark, who is qualifiedas both a barrister and a trade markattorney, is a member of our trade markgroup.

Advanced engineering specialist, DavidMcWilliams, and electronics, computingand physics expert, Russell Barton, bothbased in the firm’s Midlands office, havealso been made partners.

Adrian Chettle, chairman of Withers &Rogers LLP, said, “We’re delighted to beable to recognise and reward the

expertise and talent within our firm.These four attorneys have consistentlyproven their ability to develop strongclient relationships and deliver effectiveresults for businesses across a variety ofsectors.

“The appointments will help to maintainthe impetus of the firm. Despite theeconomic conditions, demand for patentand trade mark advice has held up wellover the past 12 months, as companiesseek to protect their innovations andinvestment in R&D at every stage ofdevelopment.”

We have also appointed two associates,Richard Worthington and ElizabethSwan, who have both joined the firmsBristol office.

Withers & Rogers appoints four new partners.

News

Withers & Rogers News

Since its opening in 1996 theCommunity Trade Mark Office (OHIM)has been a great success, allowingbrand owners to obtain cost-effective,EU-wide protection for their trademarks.

OHIM has now announced a 40%reduction in the overall official fee costof obtaining a Community Trade Mark.From 1st May 2009, registration feeswill not be payable. The effect of thefee reduction takes the total officialfees for a Community Trade Mark from£1750 (£1600 for e-filing) to £1050(£950 for e-filing). This is a welcomeand timely fee reduction which wehope will make the Community systemmore attractive to small and mediumsized firms.

If you have any queries in relation tothe changes please contact us.

Welcome news for brandowners

For further information contact:Fiona McBridefmcbride@withersrogers.com

Rachel Wallis Tania Clark David McWilliams Russell Barton