Out-Law News | 03 Apr 2014 | 11:05 am | 2 min. read
In response to a previous report which found that "knowledge assets were not appreciated in mainstream UK lending", the IPO has outlined a series of measures to boost understanding of businesses' IP (24-page / 321KB PDF), both by the businesses themselves and by lenders. It acknowledged that "the very nature of intangible assets means that they are often unseen and overlooked".
"Raising awareness through the financial sector will require a strong partnership with the relevant representative bodies," the IPO said. "These bodies can help us shape our messages for their members, to ensure that they are relevant and resonate with our intended audience. Working together with the British Bankers’ Association (BBA) and its Business Finance Roundtable we will create an awareness campaign to build awareness across the banking industry of the value of intellectual property and the role it can play in growing a business."
The IPO said it would be happy to help "identify opportunities for inclusion of IP training" at banks.
In an effort to "enable a more constructive dialogue between sources of finance and IP-rich business", the IPO said it would also create a glossary of definitions which can help describe and give value to IP and other intangible assets. It also said that it would also produce guidance on how businesses can develop an IP strategy and commercialise IP.
The IPO's report was published alongside the results of a separate study it commissioned to gain an estimate of the investment in intangible assets within the UK (52-page / 1.27MB PDF). According to the study, carried out by academics at Imperial College in London, investment in intangible assets in the UK market in 2011 reached £137.5 billion. In comparison, investment in tangible assets reached £89.8bn in 2011.
Investment in formal IP rights (IPRs), which include patents, copyright, registered design rights, unregistered design rights or trade marks, was estimated as accounting for £65.6bn of the £137.5bn invested in intangibles in 2011.
"Of investment protected by IPRs, the largest component is investment in copyright, which stood at £30.1bn in 2011," the study said. "Investment in unregistered design rights and trade marks were each £13.5bn in 2011, investment in patents, £6.3bn, and investment in registered design rights, £2.2bn."
"The scale of investment in IPR-protected assets is not fully appreciated. Investment in IPRs is higher than that in commercial buildings and also higher than plant & machinery (including ICT) and vehicles combined. The role of assets protected by IPRs, as drivers of growth, deserve greater consideration in both measurement and policy," it said.
Intellectual property expert Iain Connor of Pinsent Masons, the law firm behind Out-Law.com, said that the retail sector has often lagged behind in appreciating the value of its IPR in particular the tangible value of a business’s brand.
"Much of the reason for this is historic in that prior to the 1994 UK Trade Marks Act, retailers could not get trade marks for ‘retail services’," Connor said.
The Act changed UK law to bring it in line with the EU Trade Marks Directive, so that the basic law would allow trade marks for 'the bringing together of a variety of goods, enabling customers to conveniently view and purchase those goods'.
"While all this might sound quite technical, even 20 years on, I believe that this is why there persists a common feeling that retailers are not IP rich companies," said Connor. "The fact that the government is raising awareness of the value of all IP rights is a really important step to create a better understanding of the true worth of the IP in retail businesses."
Connor said that prior to 1994, case law had held that the purpose of a trade mark was as an indicator of origin of goods or services, and that trading in other people's goods, for example through retailing, did not qualify as such a service.