Legal Review: Protection of intellectual properties is key

As the world shrinks thanks to the growing power of technology, businesses have to be ever more careful of their assets. One set that needs particular attention is intellectual property (IP) and this is especially so in Scotland where we are keen to see innovation powering economic growth.

“IP is important not just in the life sciences and digital technologies, but also in the food and drink and energy industries,” says Roisin Higgins QC, an IP specialist and member of Axiom Advocates.

“I think, for a long time, IP was the forgotten part of people’s businesses, but in the last 20 years people have come to realise how important it is.

“And IP is very important: in terms of getting funding and then making any inventions or discoveries commercially viable, you need to get them patented.”

There are few parts of Scotland’s commercial life which are not impacted by IP.

From photographs and articles in newspapers to names of shops or products, new drugs and technical innovations, they can all be covered by some form of IP protection – patent, trademark, copyright or geographical indication (GI).

They are important both on our own doorstep and internationally, so, as with many areas of the Scottish legal sector, Brexit is the elephant in the room for IP specialists.

The jurisdiction of IP rulings at national, European and world level is no longer as clear cut as before the referendum vote.

“Two of the issues at the moment are the Unified Patent Court and the IP that has come to the UK from European regulations,” says Higgins, the co-chair of the annual World IP Day Conference in Scotland.

“The UK is currently signed up to an agreement to bring into force the Unified Patent Court.

“The court is currently only open to member states of the EU, so because of Brexit we find ourselves not sure whether we’ll actually remain part of it,” she adds.

As far as IP regulations which sit under the EU umbrella, including GIs, Community trademarks and Community designs, Higgins thinks people will be hedging their bets in terms of what they’re applying for.

“They will adjust their IP practices going forward and they will, most likely, be applying for additional rights because, depending on the terms of any Brexit deal, they may in the future find they no longer have a European right that will cover them in the UK.”

The Brexit uncertainty obviously won’t go away, but Higgins was heartened by the European Commission’s position paper on IP issued in September.

“Part of the Article 50 negotiations, it sets out what they thought the UK would have to do as part of any Brexit deal.

“They were quite clear that the UK had to ensure that all the rights that are currently Community rights would be automatically transposed into the UK.”

Higgins adds: “They’re especially concerned about GIs as I’m sure we are in Scotland where we have many GIs for things like Scotch whisky, Arbroath smokies or Stornoway black pudding. The commission has been very clear that these have to be protected to the same level as they are currently protected.”

Another development that has caught Higgins’ eye is the European Trademark Directive.

“It is going to mean that it should be easier to register things like smells and sounds,” says Higgins, adding that it was introduced in 2016, but hasn’t been transposed into UK law yet.

One thing that has come into force is the Intellectual Property (Unjustified Threats) Act 2017.

It relates to the circumstances in which rights holders are entitled to threaten to bring proceedings for infringement of patents, registered trademarks, rights in registered designs, design rights or Community designs.

“It can cause significant business difficulties for people if they have a threat of litigation hanging over them. Since 1 October, people in that position have the possibility of being able to raise proceedings against the person who issued the threat.”

A case Higgins is watching with interest is the one brought by Richemont, the owner of luxury brands including Cartier and Montblanc, against five internet service providers (ISPs) after they refused, without a court order, to block access to websites found to be selling counterfeit goods.

“So it’s trademark infringement and it was the first case raised – as far as I know – in Europe in relation to counterfeit goods and trademark infringement on the internet.

“There have been cases where it’s been done for copyright infringement where, for example, the ISPs are ordered to stop live streaming of football matches.”

Now the ISPs are appealing against the fact that they must bear the costs of implementing the order.

As cases like Richemont illustrate, IP can have far-reaching consequences.

John Sturrock chief executive of Core Solutions sees the impact at the corporate coal face in his dispute resolution and mediation work.

“What we often find is that when IP disputes go on for a long time the productive energy can be stymied and/or the very issue that is being debated is superseded in the marketplace.

“Often the presenting dispute about IP rights is, if you like, superficial and masks a deeper underlying commercial or other need or interest that people have – often arising because of the competitive marketplace.

“As a mediator, if you can get the protagonists in a room talking about the real underlying issues, what you’ll often find is that what they perceived about each other is misplaced or based on wrong assumptions and when they understand that they are then able to find ways to move forward commercially.”

This article appeared in the Scotsman’s annual legal review 2017

The Scotsman’s annual legal review looks at some of the most active areas of legal practice in Scotland. Informed by comprehensive data published by Chambers and Partners and Legal 500, the articles give exclusive insight into the work of more than 11,000 practising solicitors and over 460 practising advocates.