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UKIPO admits that it has "no plan to change our approach"


10-03-2013 10:37:53 by Admin

UKIPO's response to the follow up from the Lord Marland meeting on Nov 22, 2012


From:     Rosa Wilkinson
Date:     28 January 2013


Dear John and Tim,                                              
Thank you, John, for your e-mail on Thursday.  Later in the day, I was also looped in to Tim’s e-mail to Nick Hillman which picked up on related themes.  It may be helpful if I try to pull everything together here.
The focus of your e-mail was your concern that, in the absence of any penalty for patent infringement, a patent offered limited protection for SMEs.  You expressed this very clearly in the meeting with Lord Marland.  He said that the IPO would take the point away from the meeting and reflect on any action.
Since the meeting, I have had a number of discussions with colleagues around the points you made.
There are two elements to this:  first, the extent to which SMEs are able to access dispute resolution when their rights are infringed and, second, whether there should be a criminal penalty for infringement.
The Government absolutely recognises the need for low cost access to dispute resolution for SMEs who need to enforce their patent.  The conviction that this is a vital part of the IP infrastructure has underpinned the drive, through recent years, to improve both the operation of the Patents County Court and the services we provide.
As you are aware there has been a series of reforms to the Patents County Court (PCC).  These reforms are the first of their kind to be seen in Europe and significantly improve access to justice for smaller businesses.  They include the streamlining of procedures and the introduction of a £50,000 cost cap in 2010, and a £500,000 damages limit in 2011. These changes were part of a package of reforms intended to improves access to justice at proportionate cost and allow SMEs to more easily enforce/defend their IP rights. The damage cap  will, along with the other reforms, clearly differentiate it from the High Court.  The limit will also help to ensure SMEs avoid pre-action disputes over the appropriate court. Following a public consultation the cap of £500,000 was introduced by the IPO and imposed by the PCC (Financial Limited) Orders in June and October 2011. These reforms ensure that the court is now properly constituted to hear lower value (usually less complex) IP litigation. This fulfils the original vision of the court as an affordable forum for SMEs/entrepreneurs. The IPO is evaluating the PCC reforms in order to ensure the caps are set at the right level and are effectively supporting SMEs access to justice; with the results expected in 2014.
The damages limit adds further possibilities to any potential IP litigation strategy for all SMEs including those in the high tech business sectors whose claim may be over the limit.  In addition, the courts can take account of the financial position of the parties and can order the transfer of the proceedings to the Patents County Court or refuse to order their transfer to the High Court. This will provide a safeguarding mechanism and ensure that SMEs are not forced to pay disproportionate legal costs.
I know that, no matter how efficient & affordable Court procedures, many SMEs will prefer an alternative route to dispute resolution.   That is why the Intellectual Property Office encourages alternative dispute resolution as a low cost way to resolve issues, without having to resort to litigation.  We support our encouragement with both mediation and an opinions service.
The mediation service allows opposing parties to talk about their dispute with a trained mediator and come to an agreement without needing to proceed to the courts. This IPO service is now being enhanced to reduce costs and improve access. The changes we are making include improving awareness, offering a variety of mediation options (including short telephone sessions), training a wider range of experts as mediators and an amended fee structure. These will be introduced in March 2013 and reviewed in late 2014.
The IPO’s Patents opinion service costs £200 and provides opinions on issues of infringement and the validity of a granted patent. Opinions aren’t legally binding but help resolve disputes without the need to commit to legal proceedings; they can also give an indication of whether legal proceedings will be successful.
Let me move on to your call for criminal penalties.
We thought hard about this and looked at what other countries were doing. Although criminal penalties are possible in some jurisdictions, in practice they are rarely used.  Moreover, I do not need to tell you that patent issues are complex.  That can mean – perhaps particularly within the small business community – that infringement can be unintentional.  The threat of criminal penalties could therefore act as a very real deterrent to innovation in smaller businesses. It also seems to be the view of much of business and the majority of patent professionals (patent attorneys, lawyers and judges) that criminal sanctions for patent infringement would not be a good idea. We believe that where infringement does occur, the resulting dispute is better handled in specialist civil courts, with the appropriate experts, and with a lower standard of proof.
Beyond this, we continue to push ahead with our plans to ensure that smaller businesses can access better advice on managing their intellectual property assets.  This isn’t just about ‘selling’ patents.  Our focus is on SMEs being able to make informed choices about IP which work for their business, this might mean obtaining a patent but it might mean choosing alternative forms of protection, such as design right or trade secrets and building a strong brand identity.
I think you’re already familiar with some of the things we already do, but just in case Tim isn’t, we aim to provide SMEs with the skills to assess the IP that is owned by and used within their company and identify the opportunities and risks this presents for them. Current activities include:
·        Seminars, exhibitions and workshops which touch many thousands of businesses per year – often those who have given no previous thought to IP issues - including ‘Get it Right First Time’ workshops for 1st time Directors in collaboration with Companies House, and a series of seminars with the Institute of Directors.
·        Integration of IP advice into public sector business support programmes through providing IP Masterclass training to business advisors on the GrowthAccelerator programme, the Patent Library network, TSB and Catapult centres, UKTI and MAS.
·        Online services including the IP Healthcheck tool which had over 3,000 users in 2012. The tool is broken down into the four elements of IP covering patents, trademarks, designs and copyright along with Licensing IP and managing confidential information. To complement the tool we have also developed an e-guide series of booklets covering issues such as licensing, valuation and IP primers for overseas markets. Both the tool and the booklets will be reviewed during the course of 2013 to ensure they remain fit for purpose.
·        A monthly newsletter which has over 8000 subscribers and a strong social media presence with over 11,000 twitter followers.
These are the core elements of our outreach work, but I wanted us to go further. That’s why last year we set out some thoughts on how we could raise our game.  One of the things that many many businesses told us was that, too often, they only started to think about IP management when there was a problem.  They were frustrated that the generic businesses with whom they had contact – accountants and others – seemed to steer clear of even non-technical aspects of IP asset management that they should have been folding into their business strategies. So, in 2013, we will be doing more to make sure that generic business advisers are able to pick up non-technical IP points in their conversations with their clients.  We’ll be training people through our IP Masterclass and launching a free online Business Advisor Training Tool in September 2013. Our aim is to give these generic advisors with a basic knowledge of the four areas of IP, how it can be used in a business development plan and the point at which an advisor should hand over to a specialist IP professional.
By the way, I know this works both ways.  Businesses have also expressed some frustration that IP professionals don’t always pick up on more commercial points.  So, we’re collaborating with the professional IP bodies, CIPA and ITMA, to encourage IP professionals to broaden their outlook and to promote commercially minded IP advice through a series of webinars.
Ultimately our aim is to deliver improved access to commercially based IP advice for all SMEs. Through our work with existing networks that are well known to business we intend to maximise our reach and ensure that IP advice is provided alongside other forms of business advice.  In the coming year you will see the IPO continuing to integrate IP advice into wider government business support schemes (eg, UKTI services,  GrowthAcclerator, Technology Strategy Board and Catapult Centres); partnering the British Library in rolling out their extremely well London Business & IP Centre model; engaging more with local partners, including Local Enterprise Partnerships (LEPs) to stimulate IP awareness raising activities within local business networks; and expanding our IP Audits scheme to make sure that once a business has a decent assessment of the IP within their business, they get the help they need to develop the strategies that will mean they get the maximum value from it.
Rosa Wilkinson | Director of Innovation |Innovation Directorate |Intellectual Property Office


SMEIA's response

From: John Mitchell

Sent: 29 January 2013
To: Rosa Wilkinson

Dear Rosa
Your email does not address the two specific points made at the meeting with Lord Marland that you were asked to go and deal with (the lack of patent "protection" and no penalties for patent infringement).  "Yes Minister" should not be a euphemism for "I'll go and talk to those on the gravy train and see if they will budge".  All that does is generate the negativity that you have responded with and additional schemes for the gravy train.  I see you admit to having a lot more of those now.  What a huge amount of public money wastage this appears to be given patents are worthless to an SME in almost every single case.
You restate the schemes which we already know about.  It was against this background that the problems were raised.  These problems thus still stand and were agreed by all the other meeting participants i.e. that the current patent system still does not work for SMEs.  Even the CBI and Intellect admitted the system you preside over is far too biased towards large corporations (who are the worst infringers along with Government which others pointed out).  You still fail to address that reality or the fact that it has got worse, not better as you attempt to suggest e.g. the debacle at the PCC.  Quite how the UKIPO manages to see all this in a different light I find astonishing; but then it is not your patent, your money, your livelihood, your family, your health, your business, your staff and so on that get threatened and severely damaged by corporate infringement. The UK economic recovery is damaged directly as a result. The IPO cannot say it is not responsible for creating many of those problems nor can it reasonably argue that it is helping - it isn't.
Maybe I'm missing something?  Is there some agreement or deal that the UK Government has behind the scenes that allows corporate and/or Government copying and theft of UK technology to go on unopposed?  If so, I can imagine how difficult that must be for you to pretend one picture while behind the scenes implementing precisely the opposite.   I really do not want to bang my head against injustice which cannot be changed so if that is the situation please can you have a quiet word with me?   If not, then the UKIPO really has to change and not in the glacial timeframes you regurgitate - action is required NOW.
David Willetts and others have recently said that they are frustrated that the UK seems unable to match our competitors in growing a business.  I think that he, along with others, have been entirely mislead by the UKIPO as it is the failure to offer actual patent protection (the Government part of the patent bargain) that is THE fundamental problem.  It has very little to do with differences in culture, education or business skills.  This problem applies far less so in other countries as there are infringement deterrents in the way of penalties and less reliance on the legal "professionals".  Would you feel comfortable about being instructed to copy from a UK owner's patent when you could go to jail?  Of course not - but in the UK there isn't even a fine and UK technology is developed abroad without much chance of redress.
You say that enforcement boils down into two elements; dispute resolution and criminal penalties. Both of these points are fundamentally wrong.
Dispute resolution
In order to resolve a dispute, there firstly needs to be one.  A large corporation today simply ignores patent licensing approaches from UK SMEs; licensing being the preferred option for the vast majority.  This leaves a vast untapped market for £600bn of lost licensing revenue; a figure I know you agree with. SMEIA would like to tackle this fundamental issue.  Having systems in place that can be ignored by an infringer is not particularly helpful.  Making them compulsory and binding would be - especially if it involved technical staff rather than lawyers.  They aren't going to endorse positive change if it affects their pockets, are they?
SMEs being ignored by infringers has not changed - including the retrograde step taken by the PCC.  As for there being a consultation on that, I was advised of this by the UKIPO after the closing date despite me having talks with the UKIPO as ordered by a previous Minister.  So how did that fundamental error occur from the UKIPO?  My immediate attempt to have obvious points made about PCC changes being totally unsuitable were rebuffed as being too late but did get an admission that the damages limit is "entirely arbitrary", that it is "an experiment" and that it is not a forum for "valuable patent cases".  In other words, the PCC serves no useful purpose today with respect to tackling valuable patent copying and theft.  The UK economy cannot be prevented from growth by civil servants failing to admit they have made a gross error of judgment - but that is what your email continues to endorse.
Infringement penalties
Why do you address only a criminal penalty and ignore the UK's complete lack of a financial penalty for patent infringement?  The Minister was shocked to discover this (and it took me three goes to get your colleague to admit to it which in itself speaks volumes) and that the UK is a dramatic exception to the norm.  Your email does not talk of any solutions - just more hiding behind colleagues opinions.  I find it best to talk to real experts and the majority i.e. SME patent holders.  I note you made no attempt to contact me or others in SMEIA after the meeting to get more details - no doubt assuming your colleagues who never face a patent challenge and its implications have the information.  They haven't a real clue.
Can you give me a list of the disputes that have been resolved by the non-binding IPO Opinions Service together with their monetary value? To me this is the closest we have got to any sensible change - but without it being binding, my understanding is that no large corporations have resolved any SME infringement case because of a second non binding IPO opinion (the first IPO non binding opinion being the patent grant; but that isn't how the UKIPO sells it, is it?).   If it genuinely works as you claim and has a significant impact on valuable patents, then let's see the data and SMEIA will encourage it.
On criminal penalties, given that the UK is more the exception, I find it hard to convince other SMEs that criminal penalties are more difficult to impose (and I know the legal arguments forwards, backwards and sideways).  Importantly, wilful infringement could be prevented by the threat of jail.  No-one is suggesting that unintentional infringement could result in a criminal penalty; where do you make this stuff up from? SMEs represent 99% of businesses and employ the majority as well; so why does the IPO go along with the minority?
Finally, given your plans to educate SMEs by all the mechanisms you state, perhaps you can provide SMEIA with a list of SMEs operating in innovation?  We have requested this under an official FOI request and we were informed you have no such data. We are asking again - please take this as another official FOI request.  We think that SMEIA should be encouraged not discouraged.  We receive not a penny from Government although we have asked quite a few departments who say they cannot support us in any way.   I find this all very odd given that infringers are supported in all manner of ways and other less representative organisations receive funding.  Please advise your latest positions.
Yours sincerely
John Mitchell
Chairman - SME Innovation Alliance

Then the UKIPO admission plus claims of support

From:     Rosa Wilkinson
Date:     11 February 2013
Thank you for your e-mail.
I think we are not going to agree on the points you make.  Although you are a passionate advocate of changes to the enforcement infrastructure, others – often technology entrepreneurs themselves – disagree equally vehemently with the introduction of additional penalties such as punitive damages or criminal sanctions for patent  infringement and strongly support the reforms of the Patent County Court as the approach most likely to deliver just outcomes without damaging innovation.  We have no plan to change our approach.
Apart from the policy change you advocate, you make two specific requests in your e-mail:
•          You request a list of the disputes that have been resolved by the non-binding IPO Opinions Service together with their monetary value.  The IPO website provides information about opinion requests we have received this year and what stage each request has reached.  You can find it at . The IPO does not keep data on what happened as a result of the opinions given nor on the monetary value of the opinion.
•          You also request a list of SMEs operating in innovation. Although the IPO has records of patent and trade mark applicants and of those who have, for example, attended an IPO seminar we do not have lists or databases of ‘innovative companies’.
Rosa Wilkinson | Director of Innovation |Innovation Directorate |Intellectual Property Office


And then the UKIPO response to our FOI request for evidence of the support quoted in the above email

From:     Alison Smith
Date:     1 March 2013

Dear Mr Mitchell,

Thank you for your email of 12 February 2013 which includes three information requests for:

1.  a list of "technology entrepreneurs" who support  what IPO says about the PCC,

2.  a list of SMEs that have made patent applications and

3.  names of SMEs that have attended IPO seminars or other events at which the IPO has spoken.

I am writing to advise you that, following a search of our paper and electronic records, I have established that the information you requested is not held by the IPO.
As you are probably aware, the right of access afforded by the FOI Act applies to information recorded in any form.  The IPO cannot identify specific documentation of the views of others regarding the enforcement structure.

With regard to your second request, I regret that we do not hold any such information, the reason being we do not attempt to categorize applicants by size. To do so would be problematic as there is currently no universally accepted definition of an SME and, even if there were, the IPO is not legally obliged to collect data on the size of applicant organisations as part of the rights granting processes.  Consequently we do not seek or retain any information in relation to whether applicant companies are SMEs or not.

With regard to your third request, again we do not hold information as to the kind of organisations represented by attendees at IP seminars and similar events.

I am sorry that I am unable to help you further with respect to your information requests.

Yours sincerely,

Alison Smith
Records officer
Intellectual Property Office