An economy of ideas

Economy of ideas

Title: An economy of ideas: The benefits of IP protection for inventors

Author: Chris Burnett, Patent Attorney

Publication: Innovation into success – Quarterly journal of the United Kingdom Science Park Association (UKSPA)

Date: Spring 2016 – Issue No 40

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An Economy of ideas

Innovation is hugely important to the economy of the UK. The UK Government’s Innovation Report of 2014 suggests that innovation accounts for 70% of long term economic growth.


Not only is innovation important in financial terms; it benefits society at large. For example, improvements in medicine and biotechnology improve our quality of life, whilst advances in green technology help us to address global climate change.


Innovation is driven by creativity, knowledge and ideas, all of which benefit from protection by laws relating to Intellectual Property (IP).  Legislation that enables the successful procurement, enforcement and commercial exploitation of IP rights is vital to foster and reward innovation.


With this in mind, the Chartered Institute of Patent Attorneys (CIPA), the professional membership body for patent attorneys in the UK, have delivered a manifesto to encourage the UK to become a leading hub of IP worldwide.


The manifesto seeks to ensure that all forms of IP rights actively promote entrepreneurship and enterprise. IP rights include patents to protect inventions, trade marks to protect brand names, copyright to protect the expression of ideas and registered designs to protect the appearance of products. IP rights provide the owner of the right with the ability to take action to prevent the use of their invention, their brand or copying the expression of their idea. Certain IP rights, such as patents and trade marks, must be registered before they are enforceable. Successful registration is contingent upon meeting eligibility criteria defined in law. For example, patents may only be granted for inventions that are new and not obvious.


So how do IP rights, which are exclusionary by their very nature, foster and encourage innovation? Let us consider the rights afforded by a patent as an example. At their heart, patents are an agreement between the patent owner and the State.


A patent provides a limited term (up to 20 years) monopoly right for an invention in return for a full and workable description of that invention being placed into the public domain. Public disclosure of the invention via the patent enriches common general knowledge, which in turn fosters further innovation. Without a functioning patent system, there will be nothing to prevent ideas being stolen, and the benefits, which derive from the public disclosure of inventions, would be lost.


How can an inventor benefit from owning a patent? A patent provides a property right with which the right holder can control use of the invention. During its lifetime, a patent can be bought, sold, licensed for a royalty or mortgaged. A patent owner can prevent competitors from using the same invention, thus increase their market share, and profit directly from sales. Some technologies are taken up widely and are used for a host of different applications, which maximises the value of the patent. Bluetooth for example is used in a wealth of different technologies.


However, despite the genuine benefits that can arise from the ownership of IP, the existing legal framework for obtaining IP rights is not without flaws. Obtaining and enforcing IP rights is generally not straightforward and can be a very expensive and time-consuming process.


Lay people in particular may find the patent prosecution system too complicated, and find it difficult to obtain a granted patent. Should a patent right be infringed, the cost of enforcement can be extreme and an SME will struggle to enforce their rights against a determined large corporation. More cost effective enforcement options exist, such as the Intellectual Property Enterprise Court, though potential damages obtainable are capped.


Despite the flaws, the patent system is without serious alternative. Solutions must be reached through an improved and robust legal framework, which CIPA are hoping to influence with their manifesto.


Some important changes to the legal framework for obtaining and enforcing IP rights are on the horizon. A European patent with unitary effect (ie. a single patent having effect across all of the member countries, as opposed to the current system which provides a bundle of individual patent rights for each country) is likely to be available in 2017.


At the same time, the European Unified Patent Court (UPC) will become operational and be responsible for the enforcement of European patents. Potentially, these changes could lead to lower costs, making the patent system more accessible to SMEs. It has been confirmed that a Central Division of the UPC, with responsibility for chemical and pharmaceutical patents, will be located in London. Opening of the new court ought to bring further benefits to the wider UK economy, which is to be applauded.


The creation of IP can and should continue to be rewarded through the existence of a robust legal framework that promotes the protection of IP rights. The role of the Government in ensuring that the relevant legislation remains fit for purpose is vital to the future growth of the UK economy.

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