Staggering rise in IP court cases

Hugh James, the Top 100 law firm, has revealed this week that the number of small businesses going to court over their Intellectual Property (IP) rights has soared in recent years. 

The law firm estimates that there has been a 68% increase in the number of small-to-medium sized enterprises (SMEs) who are launching their own legal battles in order to protect their IP rights. 

They claim that the number of cases being brought before the Intellectual Property Enterprise Court (IPEC) has hit record levels – with the total rising to 339 in 2016, up massively from just 202 claims in 2015.

The IPEC is in place to deal with the affairs of small business claims which are worth no more than half a million pounds, and has a limit of recoverable costs from the losing side at £50,000. The IPEC is known for its streamlined process which ensures that all of its claims cases do not drag on too long, as such a process would be a heavy drain on the smaller resources and budgets of SMEs. 

The increasing online presence of SMEs is perhaps a factor in the increased number of cases reaching the IPEC. Hugh James states that whilst an increased online presence allow small businesses to better market their products, and reach larger audiences, it also opens the door for other companies to see the products and ideas that the SME is creating and thus makes them more vulnerable to the theft of IP. 

Original designs and images or video content sitting on social media pages, business or retail websites or stock photo websites can easily be reproduced, reused or re-sold without the permission of the copyright holder. This can be damaging to a business’ brand, unless they take swift action to protect and enforce their intellectual property.  

Tracey Singlehurst-Ward, partner at Hugh James, says: “The number of cases being brought before the IPEC is growing at an impressive rate. This is largely due to the increasing awareness of the value of intellectual property in the technology sectors, the online presence of SMEs and the growing financial incentives to protect IP. The internet brings with it a wealth of opportunities for SME businesses. But it is also not without its pitfalls.

“By being ‘online’ SMEs sometime put themselves at a much higher risk of having certain IP stolen – including digital images, styles and designs. This means they have to be extra vigilant and careful. They have to think about what the value is in their business before they launch it and also have to react quickly when their IP comes under threat.

“In parallel, whilst previously a business’ most valuable asset tended to be physical it is more often than not now found in some intangible intellectual property. That could be patents, designs, trademarks and goodwill in their brands or other works attracting copyright. We no longer have an economy focused in manufacturing, but rather have a fast pace technology sector driven to reach the next intellectual creation first.

“It has become even more important that SME’s make intellectual property advice top of the priority list both when starting out and on an ongoing basis. Failure to invest at a small cost early on or take steps to protect what you have can cost SME’s dearly later down the line.

“The IPEC is especially designed to help SMEs take the action they need to protect their IP. The rise in claims being heard by the IPEC is a reflection of SMEs becoming better at spotting – and quicker to react to – instances where their IP has come under threat.”

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