Professional Documents
Culture Documents
All information contained in this document was correct at the time of going to print, and is available in alternative formats on request. For further information please visit our website at:- www.ipo.gov.uk or contact us on:- 08459 500 505
Introduction
This booklet gives basic guidance on how to legally protect your idea, and develop it into a reality. It aims to give you an overview of the issues you need to be aware of in turning your idea into a successful business. If you need more detailed advice from experts, the guide directs you to appropriate professional organisations. Youll also find a couple of examples of successful ideas which have been developed into businesses.
Contents
Research What is intellectual property (IP) Choosing a business strategy Working with other people and organisations Confidentiality Keeping hold of your idea (enforcement) Making sure your idea is original Develop your idea Assessing potential markets Identifying your competitors Planning your project Funding your business Attracting partners Govenment support Checklist Case study (FireAngel) Case study (Solio) 3 3 5 6 6 7 8 9 10 11 12 13 14 15 16 17 18
Research
Researching your idea is vital. Be realistic about the following six questions. Does your idea work? Is there a market? What will it cost to produce? What will people pay for it? Can it really make a profit? Can you market it, and do you have the energy and resources to do so (or can you get them)?
If youve created a new invention, it could be a good idea to apply for a patent. This gives you the authority to control how the invention is made, used or sold.
Patents If youve created a new invention, it could be a good idea to apply for a patent. This gives you the authority to control how the invention is made, used or sold. Copyright This can be an important source of income for your business as you may be able to charge every time someone plays your jingle on the radio, uses your software, transfers your manual to the internet, makes copies of your song lyrics or reprints your magazine article. You can also use copyright to stop competitors copying your labels and literature. Designs These are important assets as they can be a valuable selling point and part of your business branding, separating you from your competitors. Trademarks These can be one of the most powerful marketing tools you have, as they help customers recognise your company. Registering a trademark allows you to protect the goods and services which carry it, and gives you an IP asset to stop other people or organisations from copying them. Know-how You should keep secret any information or knowledge you have that is not obvious from the products or processes you are going to sell. This will help you keep ahead of your competitors and improve any IP you want to license.
Spin-out companies
A spin-out company is an independent company created to make best use of IP rights which have been licensed. These companies are often used in universities, where the original researchers need to be involved for the spinout to be successful in the future. Because the business relationship is at arms length, it allows the spin-out company to focus on a single idea and secure funding or government grants (www.patent.gov.uk/about/notices/2002/manip/sec04.pdf).
Getting an existing manufacturer to make your product or provide your service can allow you to concentrate on other things like promoting and selling it.
The Licensing Executives Society Britain and Ireland (www.les-bi.org) is the society for professionals who are interested in licensing IP rights and transferring technology. The Institute of International Licensing Practitioners (www. iilp.net) can help you with licensing in the UK and abroad, and run a service to find you an appropriate licensing consultant.
Licensing
Because you hold the IP rights, a licence will give you an income without you having to put time and resources into producing the product yourself. A licence arrangement can pay you either a fixed amount or royalty payments whenever your idea is used. Often, the licensee (the company you license your rights to) will have better knowledge of and access to markets, which will more effectively make best use of the IP. You can license the rights to one company or many, and this will affect how much money you can make. But remember, doing the work to show that your business idea works is highly important. Licences can be limited in geographically or in time or how the rights are licensed. A clear written agreement between you and the licensee is vital to avoid you having disputes in the future.
Franchising
If you want your business to grow quickly but you dont have the cash to make this happen, franchising might be one way to grow. However, you will have to share the profits and lose some control over how your idea is sold. The British Franchise Association may be able to help (www.british-franchise.org).
Building a team is important, and youll almost definitely need to find people to help you along the way, because they bring skills you dont have.
Technology brokers
There are lots of services available on the internet that help bring inventors and business people together. The following website addresses are links to some not-forprofit brokering services. We do not support any of the individuals or companies using these services. Globalwatchonline.com Wales4innovation.com
Insurance
You can get insurance to cover legal costs if you need to take someone to court for damaging your IP. However, make sure your policy gives you enough cover. Also, the earlier you take out a policy, the cheaper it is likely to be. Insurance underwriters may not be prepared to cover the risk if you delay taking out insurance until your product has already been affected. If you feel that insurance would be a good idea, discuss it with a professional adviser, such as a patent attorney or solicitor. Remember that if youre approaching insurers, you may need to get them to sign a confidentiality agreement to make sure they dont publicise your invention.
It is up to you to identify whether someone has copied your IP and decide what measures you should then take.
The commercial potential of your idea is likely to be limited if it isnt original. You should carry out searches to assess whether there are any patents or other forms of IP that cover your idea. There may already be rights covering the invention itself, which means that all or part of your idea is not original. There may also be patents or other publications that were in place before your idea, in which case you will not be able to get patent protection. Protect your intellectual property For more information on carrying out these searches, read the section on originality in the Inventors Handbook by NESTA (www.nesta.org.uk/howtoapply/inventorshandbook/). You can search trademarks (www.patent.gov.uk/tm/dbase) and designs (www.patent.gov.uk/design/dbase) on our website. The British Library runs a free service for searching for patents, and has a wide range of resources online (www.bl.uk/services/document/patent. html). For a full search, youll generally need to pay for expert help. Patent and trademark attorneys specialise in this area (see the section on legal help for their contact details) and our Search and Advisory Service provides commercial searches for patents (www.patent.gov.uk/ patent/sas) and trademarks (www.patent.gov.uk/tm/sas). Once you have found out that your idea is original, you need to consider how you will protect it. IP law is complicated, and so getting legal or other professional advice might often be the best way to work out how to protect your IP rights and benefit from them. The Chartered Institute of Patent Attorneys (www.cipa.org. uk) or the Institute of Trade Mark Attorneys (www.itma.org. uk) may be the best people to approach about registering your IP rights. CIPA runs clinics (www.cipa.org.uk/pag es/adviceclinics) which give free basic advice to inventors at the early stages of developing an idea. For copyright, lawyers or trade associations (or both) may be helpful. There are also other, more general sources of advice and help that might be worth exploring. Business Link www.businesslink.gov.uk Small Business Service www.sbs.gov.uk Innovation Relay Centres www.irc.cordis.lu Patent Libraries www.bl.uk/collections/patents/patentsnetork.html
Building a prototype (a first version of the product) or developing a design can improve your chance of becoming a successful business.
Selling
A thorough sales strategy is vital if your product or service is to be successful. It should focus on: ways of selling that can be stopped or changed if necessary; and how much it costs for each sale.
Today there are many outlets through which you can sell your goods or services for example, websites, mail order, direct mail and small ads, each of which have different strengths. The Business Link website (www.businesslink. gov.uk) has a detailed guide.
Before making large investments in your new product or service, its a good idea to assess how it will fit into the marketplace and most importantly whether you will be able to build a profitable business around it.
10
It may be useful to go to exhibitions and trade fairs to check which of your competitors have displays. Upcoming events are listed on the Business Link website (www. businesslink.gov.uk/bdotg/action/event). Use main libraries to study trade publications and business magazines. You can access information about UK trade associations and business sectors from the Trade Association Forum (www.taforum.org). You could also speak to your local Chamber of Commerce (www.chamberonline.co.uk). Business reference libraries can supply directories and survey reports.
The best way to understand your competitors is to monitor the way they do business. Information on the internet can give you good tips on what businesses are doing
11
Starting Up on the Business Link website (www. businesslink.gov.uk, or www.bgateway.com in Scotland) gives guidance on how to go about starting your own business. It includes tools to assess your qualities as a businessperson, your business skills, your knowledge of market-research techniques and your financial commitment to help you decide whether you are ready to get going. Being clear on these issues is particularly important if youre looking for finance or investment. The process of building your plan will also focus your mind on how your new business will need to work to have the best chance of success.
12
Before lending you money, your bank will want to know that you are a good risk new companies can find this difficult to show, because they do not have a track record to draw on. Usually, the bank will want you to: present a realistic business plan; provide evidence that you have a successful track record in business; offer security for any money it lends you; and invest some money in the business yourself.
If you dont meet all the banks normal conditions, you may qualify for a loan under the Governments Small Firms Loan Guarantee scheme (www.businesslink.gov.uk, or www.bgateway.com in Scotland).
Friends and family may be willing to help by lending money or by buying a share of your company. But remember, you could risk losing their money as well as your own.
13
Attracting partners
Outside funding can suit opportunities for long-term investment. Usually, your company gives investors part-ownership in return for their investment. As a result, the investors will share in the profits of your business.
Business angels are individuals who invest on their own, or as part of a group of investors, in businesses which tend to grow quickly.
Business angels are individuals who invest on their own, or as part of a group of investors, in businesses which tend to grow quickly. As well as money usually up to 250,000 business angels often make their own skills, experience and contacts available to the company they invest in. The British Business Angels Association (www.bbaa.org.uk) can give you more information. Venture capitalists usually invest anything from 500,000 to 2 million or more. They choose businesses they believe will give a high return on their investment and projects with clear exit times. The British Venture Capitalist Association (www.bvca.co.uk) represents over 180 UKbased private-equity and venture-capital firms. Before approaching potential investors, you need a good business plan, along with evidence of your ability to manage a business. Your plan should include detailed financial forecasts and explain what you will do with funds which are invested in the business. You will also need to prepare a pitch (a presentation to help sell your business to potential investors).
Grants
In the UK, there are many types of grants available for example, from the Grants for Research and Development Scheme (which is run by the Research Development Agencies (www.dti.gov.uk/rda/info) and the Small Firms Loan Guarantee(www.businesslink. gov.uk). In Europe, there is the Framework Programme (cordis. europa.eu/fp6) and EUREKA (www.eureka.be/thematic aboutStrategicInitiatives.do). They are good sources of cheap financing and may also provide expert advice and information. To qualify for a grant, your business must meet the conditions set by the scheme. If accepted, you will have to use the funds for a specific project and the grant will only cover a percentage of your costs. There is often strong competition for the schemes and the application process can be complicated and take a long time. The Business Link website (www.businesslink.gov.uk) outlines all the types of grants which are available.
14
Government support
There are a number of government programmes which can offer support, and it can be worth finding out if they offer help for your type of business. There are also a range of grants available to SMEs (see www.grantnet.com). Creative industries have a range of business options, and the DCMS website includes information on how to get funding (see www.culture.gov.uk/creative_industries/). Research councils (www.rcuk.ac.uk) fund academic research and training. They aim to turn academic or business ideas into money-making processes and products. Each research council has its own procedure for awarding research and development (R&D) grants. The Small Business Research Initiative is designed to make it easier for smaller firms to get contracts from government organisations to carry out research and development (see www.sbri.org.uk). Knowledge Transfer Partnerships run throughout the UK and aim to bring graduate researchers into businesses (see www.ktponline.org.uk). Knowledge Transfer Networks offer grants which are designed to create networks between businesses, academic institutions and trade associations. You can find more information on the DTI website at www.dti.gov.uk/innovation. Collaborative research and development grants encourage businesses to team up and consult with the research community. The level of grant support will vary between 25% and 75% of both partners R&D costs. You can find more information on the DTI website (www.dti.gov.uk/innovation). The Shell Technology Enterprise Programme (STEP) is a scheme designed to help small or medium-sized businesses or community organisations. The business pays a student a weekly training allowance for the length of the project. In return, the business receives support from a local STEP manager (see www.step.org.uk). LINK collaborative research encourages the industry and academics to work together on research projects. All LINK projects must involve at least one company and one research-based organisation. Large and small UK companies and even multinational companies can take part (www.ost.gov.uk/link/).
Businesses that carry out research and development can often reduce their tax bills by claiming relief.
Checklist
Check that the idea is new. Assess where you will fit in the market. Choose your target customers. Know your customers needs, identify the types of customers and how to sell to them. Set out your costs and find out what customers will pay. Identify competitors. Protect your idea with appropriate IP and think about enforcement. Prove the idea works. Research and develop your business, new products and services. Get the design right, test it and develop prototypes. Get the professional help you need, for example: Business advisors, solicitors, accountants, and patent and trademark attorneys. Sort out a business plan. How do I survive until my business is off the ground? Predict and plan your sales. Plan your marketing strategy, and identify potential sales methods. Do market research and get market reports. Choose and protect your business name, and create a brand. Use your business plan to get funding, for example. Investors (equity), business partners, grants or venture capitalists. Consider your business options. For example, licensing, manufacturing, joint venture, franchising, subcontracting and so on. Starting a business. Budget and plan your business. Plan your cashflow and how to get paid on time. Examine your finance options, both to start off with and if you run out. Decide whether to lease or buy assets. Choose the legal structure for your business. Choose and run a business bank account. Sort out your tax and record-keeping. Assess whether you are responsible for paying National Insurance, business rates, VAT, and other business taxes, reliefs and allowances. Assess risks and your responsibilities for health, safety, security and the environment. Insure your business and its assets and get liability insurance. Set up your premises and negotiate with suppliers. Running the business. Pricing the product or service. Marketing your product or service and staying ahead in the market. Control your business costs and stock. Consider whether to sell direct, how you will distribute your products, and setting up and promoting your business online. Get the most from IT in your business for example, through e-marketing, e-commerce, and accepting online payments. Keeping to the law. For example, the Sale of Goods Act, Data Protection, fair trading, trade descriptions and trading standards, product liability, the Information Commissioners regulations. Review the regulations that affect your business, investigate and apply for the licences and permits.
16
FireAngel
FireAngel decided to go it alone. They initially received a 55,000 European grant but the product developed some problems in the first year and the grant was soon used up. They then received another 250,000 through a group of business angels and, by concentrating mainly on developing and marketing their product, they saved money. Within 12 months, their product was independently tested to the relevant British Standards and available to buy in the UK. Fire Angel eventually won a contract with B&Q for three months, which was followed by a two-year merchandising agreement. Other national retailers also become involved and, within 12 months, the FireAngel PS-101 Plug-In Smoke Alarm was available in over 3000 shops across the UK. Within four years, FireAngel had won a number of awards including the Real Business/CBI New Product of the Year. In 2001, Sprue Aegis became a public limited company with a turnover (for the three months up to June 2003) of 515,000 a 46% increase on the same three months in 2002. FireAngel have extended their products internationally, to 18 patents (either granted or in progress), plus protection for a range of trademarks. A new name AngelEye has been registered specifically for the American smoke-alarm market. Sprue Aegis plc will continue to invest heavily in developing new products for both the FireAngel and AngelEye brands. The companys attitude is that they can only progress competitively if they continue to develop original products, meaning that new patents are expected in the years to come.
The FireAngel PS-101 Plug-In Smoke Alarm was available in over 3000 shops across the UK.
17
Solio
Chris and his team at Solio knew that, in the growing mobile-phone industry, battery and energy technology put huge limits on the product. Phones were adding features such as TVs and radios, but they drained the battery quickly. Chris saw huge advantages in using solar energy its environmentally-friendly, convenient and free! Research showed that solar chargers already on the market didnt work well, and were poorly designed and marketed. Better Energy Systems (BES) wanted to develop a brand that was a must-have. To get a unique design, Chris appointed a designer called David Fowler. Chris then approached a US solar-energy manufacturer, who were making a similar product, but had no patent. Chris wanted to learn from them, as he had no manufacturing experience and hoped to share the costs. The discussions were successful and Chris signed a development agreement, allowing the manufacturer to own 50% of the solar technology. Once BES had developed their actual design for Solio plug into the sun, they could then register their design with the UK Patent Office. BES also approached engineering firms in Germany to run tests on the battery life and the toxic parts of the equipment. They also worked with Motorola, Orange, Apple and Vodafone. These links gave Chris access to expertise that he did not have. However, every discussion meant that more people were learning about his new ideas. Chris used non-disclosure agreements and contractors agreements to make sure that anything created through Solio was still BES property. As Chris said: When anyone is starting to develop a new product, who you talk to about it is key... you dont just disclose to everybody what you are doing. If you do disclose, make sure you have a watertight confidentiality agreement.
Chris and his team at Solio knew that, in the growing mobile-phone industry, battery and energy technology put huge limits on the product.
18
Other Publications
Patents
1. Patents: Essential Reading 2. Patents: Application Guide 3. Patents: Basic Facts
UK Intellectual Property Office is an operating name of the Patent Office
A DTI SERVICE
This guide is all about how to apply for a UK patent. Before you apply, there are two important issues you need to consider the need to keep your invention secret and the importance of getting professional advice.
If you invent something that could be commercially successful, you may be interested in applying for a patent.
Designs
4. How to Apply to Register a Design 5. Designs: Basic Facts
Copyright
6. Copyright: Basic Facts
Copyright Basic facts
Copyright gives the creators of certain kinds of material rights to control ways their material can be used.
Trade Marks
7. Trade Marks: Essential reading 8. Trade Marks: Application guide 9. Trade Marks: Basic Facts
Concept House Cardiff Road Newport NP10 8QQ Tel: 08459 500 505 Minicom: 08459 222 250 Fax: 01633 817777 www.ipo.gov.uk For copies in alternative formats please contact our Central Enquiry Unit. When you no longer need this booklet, please recycle it. Revised: Feb 07
This leaflet provides basic information on some areas of trade marks. It is not a reference book and has no legal authority.
UK Intellectual Property Office is an CUSTOMER operating name of the Patent Office SERVICE EXCELLENCE
A DTI SERVICE
A DTI SERVICE
Additional
10. Search and Advisory Service
TEN PA
T DES IG
TR A DE S KS M RK AR MA
NS
COPYRIGH T
Concept House, Cardiff Road, Newport, NP10 8QQ Tel: 08459 500 505 Minicom: 08459 222 250 Fax: 01633 817777 www.ipo.gov.uk For copies in alternative formats, please contact our Central Enquiry Unit.
Revised: April 07
DDU/P300
A DTI SERVICE
All Publications are available through the UK Intellectual Property Office Website: www.ipo.gov.uk or by phoning our Central Enquiry Unit on 08459 500 505 To order any of the above publications, please tick the box next to the ones you want, fill in your name and address over the page, and return the form to: Central Enquiry Unit, Concept House, Cardiff Road, Newport, NP10 8QQ. 19
Search and Advisory Service Concept House Cardiff Road Newport NP10 8QQ
E-mail: sas@ipo.gov.uk
Contact us
Name:
Address:
Phone number:
Fax number:
E-mail:
After filling in your information, please tear this page off and return it to: Central Enquiry Unit Concept House Cardiff Road Newport NP10 8QQ. www.ipo.gov.uk
Concept House Cardiff Road Newport NP10 8QQ Tel: 08459 500 505 Minicom: 08459 222 250 Fax: 01633 817777 www.ipo.gov.uk For copies in alternative formats please contact our Central Enquiry Unit. When you no longer need this booklet, please recycle it. Revised: Feb 07