News

December 21, 2010

Patent system allows big business to “hijack” small firms’ ideas

The current patent system makes it too easy for large companies with deep pockets to “highjack” small firms’ ideas, the SME Innovation Alliance (SMEIA) has said in a letter to Business Secretary Vince Cable.

John Mitchell, chairman of SMEIA, the body set up to represent small firms in the technology and science sectors, said the UK’s intellectual property (IP) framework was “unfair” towards small businesses.

“A false assumption is made that an SME holding a patent will have protection for their related investment in R&D and any related innovation,” he wrote in the letter to the Business Secretary. “But for high-tech SMEs – the main source of new business tomorrow – a patent is almost impossible to enforce.”

Speaking to The Daily Telegraph, Mitchell also said the huge costs involved in protecting IP deterred many small firms from doing so. “The UK patent system allows infringers with deep pockets to copy innovations knowing a legal challenge is unlikely,” he said.

“Although no one likes to hear the truth about how the big businesses of today can hijack British inventions taking billions from our economy and many jobs, action is required to rectify matters,” Mitchell added.

He said that the principle of security for costs – which allows a defendant to ask that a claimant pay a sum into the court up front to cover costs if it loses – allows large companies to breach their IP rights and then assemble an expensive legal team that a small firm could not hope to pay for, forcing the abandonment of any legal attempt.

However, a spokesman for the Intellectual Property Office (IPO) said an ongoing independent review of the IP system is looking at the cost and complexity of enforcing IP rights both in the UK and internationally – the findings are expected to be published in April 2011. “The Government is committed to ensuring the UK’s IP system helps businesses protect their ideas and promotes growth in the UK economy,” he said.

Chartered Institute of Patent Attorneys (CIPA) council member, Rob Jackson, said: “One thing the SMEIA didn’t mention is that there has been a major reform of the patent county court system over the last couple of months to make it a quicker and more affordable process – particularly for small firms.

“The patent county court now provides a low-cost mechanism for enforcing patents and other IP rights,” he added. “It’s a simplified procedure and trials will be limited to a maximum of two days, keeping costs to a minimum for small firms.

“Even if one side does spend a lot of money, the maximum that either party will be able to claim from the loser is £50,000 for the main trial – whereas you could be looking at a million pounds in the High Court,” said Jackson. “Small firms in need of advice on patent infringement should contact a patent attorney.”

• For more information on patenting your idea, visit the Law Donut guide to patents