Beware intellectual property infringement

29/01/19 General

It has been roughly a year since an alleged intellectual property infringement occurred, when Talking Tables, the £16m-turnover party accessories designer, expressed apprehensions over a seeming imitation of its ‘Prosecco Pong’ product, launched into the market by a UK retailer.

Just one month ago, The UK IPO and IP Crime Group released its annual crime and enforcement report, which highlighted the extent to which counterfeit goods infiltrate the economy through imports. It found 4% of all imports – £9.3 billion worth of products – to be counterfeit.

Knock-off cigarettes, along with clothing and cosmetics, topped the counterfeit list. Worryingly toy stories can also have unhappy endings, with many not being the real deal, due to counterfeit imitations. Social platform websites, the likes of Facebook, Instagram, Amazon, Gumtree and Alibaba, provide a retail home for such counterfeit goods, but regular retail outlets can also have them on sale.

In 2017 alone, 398 people were found guilty of offences that fall under the Trade Marks Act. A further 47 broke the Copyright, Design and Patent Act (1998). This is despite the stealing of designs being regarded as a severe crime in the UK.

Infringing intellectual property rights is easily done when there are so many counterfeit goods around and when ethics relating to intellectual property can sometimes seem to be in rare supply.

Should counterfeit products result in a safety issue for the public, however, the decision to not check out a product’s credentials can be a costly one. A recall of the product may be required and if the retailer has no product liability insurance to cover the logistics of the recall, things can prove very expensive.

Additionally, attempting to defend an Intellectual Property violation can also result in a pricy legal case that eats into the company budget, if there is no professional indemnity insurance to help with the daunting legal costs.

A new patent system, based on the Unitary Patent and the Unitary Patent Court, is set to be applied in Europe in early 2019, which will make it less onerous to get patent protection across multiple countries – all 26 European countries in fact – with just one application. Infringement could then become an even greater issue, through legislation that will increase the geographical protection of companies with patented products.

Businesses in the fields of product design and creation, which can include retailers, are particularly at risk of being victims of IP infringement and copycat products. Bodies such as the ACID (Anti-copying in Design) are becoming increasingly attentive when it comes to protecting their members’ IP rights – something to take into account before making a me-too product.

The Government’s Intellectual Property Office highlights how IP insurance has a major role to play in safeguarding businesses and supporting cash flow throughout the period of a dispute, not to mention increasing the insured’s negotiation power within a case and enabling them to be more attractive to investors, as a protected business. (https://www.gov.uk/guidance/intellectual-property-insurance). If you need help in buying such cover, please get in touch.