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Saturday 30th November marked Small Business Saturday, which celebrates small business across the United Kingdom. SMEs face several challenges in an uncertain market, from maintaining profitability, attracting new customers and retaining valuable employees.
Gareth Thompson, Commercial Solicitor at CJCH, discusses the common challenges faced by SMEs and how advice from a specialist solicitor provides value to a small business.
What are the most common legal issues SMEs face?
Most common legal issues arise from failing to adequately have in place contracts between employees & suppliers. Additionally, poor management with cashflow or credit control causes issues for SMEs.
What are the different business structures?
Whether it’s a sole trader, partnership, private limited company or limited liability company. Solicitors advise on the different features of business structures. Each has its own advantages and disadvantages. Whilst you can change the structure down the line, it is better to get it right from the outset. Importantly, seek legal advice to choose the correct structure for your business.
How can a solicitor help owners protect their business from copycats?
It is vital that SMEs protect their Intellectual Property! Especially for new businesses – incorporate to get the trade name registered, registering trademarks or patents. Moreover, ensure the service and employment contracts have valid non-compete clauses.
Furthermore, if your SME is supplied or exports to the EU, it is imperative to ensure contracts are in place ahead of Brexit. Engage with your partners to asses their own readiness – it’s not just your own business, after all.
What top tips would you give to someone running a small business?
A common issue for SMEs, particularly new enterprises, is maintaining cash flow to sustain growth. It is important to know your outgoings, bundle products & services and encourage repeat business.
Above all, the three golden rules are – have appropriate contracts in place! Protect your IP! Ask for help/legal advice! The last point is especially important, seeking legal advice can save your SME costs down the line.
How can we help
CJCH’s commercial services span the full spectrum of corporate and commercial requirements. From start-ups, medium-sized and large organisations, we provide legal support and advice to leverage opportunities and minimize risk to your business.
Get in touch with a member of our commercial team today.
According to the World Intellectual Property Organisation, one third of the value of the products we buy comes from intangibles like Intellectual Property. Intellectual Property spurs innovation and drives growth in the economy.
Our specialist Solicitor, Ana Kocmut-Saunders, is on hand to explain the importance of Intellectual Property protection for your business and your brand.
What is Intellectual Property
Intellectual Property (IP) is a category of property resulting from human creativity. It is divided into two classifications. The first is Industrial Property, which includes patents, trademarks and geographical indications. The second is Copyright, which encompasses works of literature, films, drawings etc.
Benefits of protecting IP
IP rights allow creators & owners to benefit from their own work and investment. This gives owners a legal right to stop others from using their property without their permission. Through IP rights, holders set their business apart from their competitors by being recognised as a reputable supplier of goods and services.
The main goal of any business is to make a profit and IP rights, if protected and maintained properly, provides business with a revenue stream. Therefore, the risks of not protecting your IP can result in damage to your business and your brand.
Different types of IP protection
There are different types of protection depending on what was created. Under UK Law, some types of IP protection are automatic, whilst others you must apply for. Copyright is an example of automatic IP protection after the creation of music, literature or some other artistry and lasts for 70 years after the author’s death. Whilst Trademarks must be applied for and confer protection for 10 years.
Importance of seeking legal advice
Only through seeking legal advice can you ensure your business is fully protected from unfair competition and counterfeiters. Small businesses often make the mistake of not seeking legal advice on protecting their IP to save money. However, not protecting your IP can leave your business vulnerable, which can mean significantly higher legal costs down the line.
How we can help
For more advice on protecting your Intellectual Property, contact a member of our IP, Anti-Piracy & Compliance Team for dynamic, professional advice.
Terms such as “anti-piracy” and “licence compliance” might seem to be counter-intuitive, but in reality, are quite straight forward. Anti-Piracy is the process of instituting countermeasures to piracy. In our industry, piracy does not mean eye-patches and cannon battles at sea. Rather, it refers to the reproduction or unauthorised use of someone else’s work or innovations.
Physical copyright infringement, such as reproduction of clothing, is commonly known as counterfeiting. When it comes to the digital arena, such as computer games and software, we refer to this as piracy.
“Licence compliance” is a term used to describe the process which follows on from the identification of infringement activity. The licence is the right the software developers give to the users which allows them to use the product they have developed in a specific way or format. These details are usually outlined in a “ULA” or user licensing agreement. Terms will vary depending on the developer, but any user who uses these products is agreeing to these terms when they install and/or use the software. The terms usually include the number of times the product may be installed on a device or number of devices it may be installed on. They may also relate to the number of users who may use a single licence, the location the licences may be used in, or the primary function the licence may be used for, i.e. personal, academic, or commercial use.
Therefore, licence compliance is the process by which the owner of the copyright takes action to enforce their copyright and require an unauthorised user (someone who is using a fake, copied, or cracked version of their product without paying for it) to pay for the licence and usage that they have benefitted from.
What is a Raid?
In a field shrouded in misperceptions and deception, we often come across infringements that, for various reasons, such as the scope of the violation, require a more direct and tactical intervention – an on-site inspection ordered by a law-enforcement authority (often informally referred to as a Raid).
As mentioned above, copyright infringements constitute a violation of intellectual property rights. Due to the intangible nature of computer programs, there are mechanisms which allow for software infringements’ traces to be easily hidden or deleted by the infringer. This makes it very difficult for the right holder to enforce their rights and consequently could result in the infringer being able to avoid liability.
An on-site inspection is an approach we use which helps to avoid these risks. An unexpected inspection on the premises on the infringer, ordered by a law-enforcement authority enables the right holder to obtain and/or secure the evidence of the software infringements currently being used and has proven a very effective remedy.
How can this be implemented?
Around the world, the legislation of various nations usually provides the possibility to obtain an ex parte / Inaudita parte order (meaning it is in the interest of one of the parties to the matter) for the inspection which will be granted by the relevant authority (court, prosecutor, police…) depending on the jurisdiction. Once this order is obtained, and following the regulations of that particular jurisdiction, an inspection is conducted, usually under the supervision of local law enforcement, to inspect the premises of suspected infringements.
Access to the premises is granted, by order of the authority, and the inspection is carried out. All computer devices and IT equipment are inspected, and evidence of unlicensed software use is gathered/or preserved.
On-site inspections are a legal process which we manage on behalf of our clients and is a service which has allowed many of our clients to expose large volumes of unlawful use of their products which have been stolen from them.
CJCH have a dedicated on-site inspection team which are strategically placed to observe and monitor our client’s usage data. To date, they have managed the legal process relating to on-site inspections for a number of cases and have recovered in excess of €1 million in revenue for our clients (with up to a further €1 million in pending action).
In an ongoing battle to tackle software piracy head-on, the organisation has partnered with law firms around the world to address the growing issue of copyright infringement in terms of commercial software. Being a client of ours, we know all too well the dedication and commitment DS shows in the fight against Software Piracy and Licence Compliance, which is why we are delighted to share the news of their recent win in collaboration with our partner law firm in Shanghai, to the tune of $2.2m in compensation.
For too long companies such as DS have suffered at the hands of online deviant behavior which shows indifference to copyright law and Intellectual Property rights. Software pirates do not realise, or do not care about, the knock on effect their infringements have on innovation and development. The costs of research and development of new software can be astronomical, and when individuals take it upon themselves to illegally access and use this software without paying for it, it detracts from the creators ability to reinvest and expand their offering. Not to mention the extreme security risk the illegal software poses to the unauthorised users who open themselves up to threats such as unregulated software which is not monitored by the developers strict quality control processes. The use of illegal and cracked versions of software also potentially expose the user to embedded threats such as malware and viruses which are often inserted into fake versions.
Our partner law firm associated with this case, Han Yuan & Partners, will be joining us in Cardiff in September. We will host them to discuss our collective innovations in the field of Anti-Piracy and Licence Compliance and how the collaboration between China and our evolving technology innovation and IP Hub here in Wales can continue to service and support the Asian and European market and beyond. Discussions will include those with local IP communities, academia and the Welsh Government.
“La propriété, c’est le vol!” (All Property is theft!). So said French anarchist and capitalist Pierre-Joseph Proudhon in 1840. Proudhon was not actually criticising individual entitlement to privately owned land. He was attacking landowners and capitalists whom he believed “stole” profits from labourers.
When modern day capitalists start up their own business they can quickly, easily and unwittingly ‘steal’ other peoples’ property. How? By using or adopting patented inventions or processes, trademarked logos or copyrighted material in their own business offerings or marketing.
Patents and Trademarks are easier to check out to avoid falling foul of them. You can do that by a simple search of the online registry for each.
Beware and do your due diligence to check it out however.
Big brand retailers and service providers can be very aggressive indeed in their pursuit of anyone allegedly breaching their trademarks
Click here for the the latest reported instance and potential salutary tale.
What about copyright though?
If material is not patented or trademarked, how do you know that your song, marketing concept, literary feature, clothing design or advertising pitch hasn’t already been created and protected by someone else?
If you create something isn’t it yours? So what if it’s not? Does it really matter and should you worry? Potentially yes if it steps hard enough on a business rivals’ copyright protected toes.
Uber was recently sued by Waymo (Google) for allegedly stealing technical information about itsLiDAR self-driving car system. Ed Sheeran was recently sued for £16m for ‘stealing’ notes from ‘Amazing’ sung by Matt Cardle in his top 20 hit ‘Photograph’. Marvin Gaye’s estate successfully sued Robin Thicke and Pharrell Williams for $7.4m for ‘stealing’ from Gaye’s music to create ‘Blurred Lines.
In the fashion world the number of fashion shops claiming damages from rivals for copycat designs has increased dramatically. All Saints attacked River Island for copying items from its men’s and women’s collections. Jimmy Choo pursued Marks and Spencers on the same basis. Top Shop was forced to pay an undisclosed sum to French design house Chloe for copying a dungaree *
Original ideas invariably borrow from old ones. Even Voltaire admitted that “Originality is nothing but judicious imitation” **. So how is a fledging entrepreneur supposed to know when their own inspiration becomes appropriation? What’s the difference between being legitimately creative and original and illegally copying someone else’s work? When does an idea become copyright protected material anyway?
Copyright arises automatically when material is first created. However it has to be recorded not just remain an idea in someone’s head. Once it is recorded though, any copying or adaptation of it can amount to an infringement. An example would be lifting or adapting content ‘word for word’ from a business rival‘s promotional material or website to promote your own business. However creating your own work based on someone else’s similar idea would not be an infringement of their copyright.
If recorded material is in the ‘public domain’ then it can be freely used. Material published on the internet may be freely accessible to anyone. Perhaps surprisingly, that does not mean it is in the public domain. Recorded material is only in the public domain if its copyright protection has expired. How long does that last? In the UK and for mere mortals, it currently lasts for the life of the author plus 70 years but not always. In the case of JM Barrie’s Peter Pan copyright protection has, (rather like Peter), an indefinite life span. In JM Barrie’s case that was achieved by a statutory amendment made especially for that purpose in 1987 before it expired.
Different countries have different copyright expiry periods. In the USA for ‘applied art’ material it can be as (comparatively) short as 25 years. In Mexico,it is 100 years after the death of the author. Once it has expired you can freely use, copy and adapt it. However think twice before incorporating ‘Singing in the Rain’ into the marketing materials for the launch of your new retail umbrella outlet or ‘That’s Life’ for your positive thinking consultancy. The copyright in the song or lyrics composition may have expired. However the copyright in the recording itself is separately protected. That could make it a highly successful but potentially very expensive launch party.
If there is any doubt about whether material you intend to use is copyrighted, whether anything came of it might ultimately and actually depend on how commercially successful you were. How do you protect yourself against copyright infringement anyway?
In short create don’t copy or adapt someone else’s material. Literally start with a ‘blank page’ and just what’s in your head. Also go online and see what else has been created and recorded. A simple ‘Google’ or ‘Bing Search’ will be highly informative. It might be depressing to discover that your unique idea sadly isn’t but far better to be safe than sorry. If in doubt always acknowledge the author’s contribution. Apply otherwise to the author for a licence, grit your teeth and pay them a license fee.
If you’re otherwise sure that you’ve created your own original material don’t keep it to yourself. Cast modesty to the winds and make sure you record and publish it. Go ahead, be inspired and creative. Feel free to stand on the shoulders of others. Just avoid picking their intellectual pockets in the process.
If in doubt and for safety always ‘look before you leap’ by getting specialist IP advice first. Consult Ana Kocmut-Saunders, a member of the rapidly expanding IP team at CJCH solicitors. Ana specialises in intellectual property protection.
CJCH Solicitors Corporate (including IP law) team is lead by Gareth Thompson, supported by Ana Kocmut-Saunders, and offers a obligation free consultation contact for new matters – 029 2048 3181 or e-mail on email@example.com
CJCH Solicitors have embarked on an ambitious journey to create a staggering 71 new jobs within the Anti-Piracy and Cyber Security speciality in Wales by year-end 2020. We are proud to reiterate the announcement made by the Welsh Government, revealing their support of our new global IP Anti-Piracy Unit at our Cardiff head office.
CJCH has been at the heart of digital piracy and Intellectual Property compliance in Wales, with an international impact. In 2014, our Intellectual Property practice launched its internal Anti-Piracy and Compliance consultancy. Our team developed a customised solution for our international clients, to protect their work product and recover lost revenues from software infringements.
Ken Skates, Cabinet Secretary for Economy and Infrastructure, said “IP piracy, which can range from copyright theft or infringement to counterfeit goods, is a growing global issue that can cause untold damage to businesses, to their protected and valued brands and the economy. ”
Infringements of this nature are a form of cyber crime which impacts business globally, depriving them of revenue and compromising their intellectual property rights. CJCH have tackled this issue head-on and cultivated a bespoke solution for companies suffering from this invasion.
The purpose of this partnership with the Welsh Government is to leverage our thought leadership and create a central hub for Anti-Piracy and Cyber Security in Wales. We intend to bring global best practice into Wales while developing local talent as well. Our 2020 goal, is to have established 71 new jobs in this field, as well as contribute to making the United Kingdom and global digital community a safer and more secure environment. We will be partnering with local businesses and academic institutions, such as Swansea University, to cultivate development and training programs to support this initiative, with specialist content aligned to business needs.
Stephen Clarke, the CJCH CEO, stated “The modern world of digital liberty and innovation offers greater access to information and narrows the global divide. Unfortunately, the digital economy brings with it a growing sophistication in criminal activity. Without proper defences, digital piracy exposes businesses to uncontrollable risk and vulnerability. Our solution enables us to partner with our clients to establish a proactive (protection) and reactive (recovery) governance model. Our goal is to share this experience with the community and grow the local capability in cyber security.”
As of 6 March 2017, CJCH Solicitors has been awarded a £432 000 grant from the Welsh Government to support our active project to establish this new entity. Our objective is to aggressively drive the development of Cyber Security and Anti-Piracy enforcement in collaboration with skills development and knowledge transfer. Making Wales, and the UK, a more secure and impenetrable digital landscape.
Wales top 20 Law Firm and 2018 Financial and Professional Services Firm of the Year in the Cardiff Business Awards - CJCH Solicitors, has announced a major promotion in their leadership team welcoming Jodi Winter to their Board.
CJCH Solicitors has experienced unprecedented growth and achieved important milestones over the last few years, all of which have culminated in the first half of 2018 being a prosperous year for us at the Firm and winning the Financial and Professional Services of the Year award.