For the past four years, Mick Quinn, co-founder of Raft Furniture, has been embroiled in a legal battle to defend his intellectual property (IP) rights from a neighbouring furniture firm. In May 2016, the Intellectual Property Enterprise Court (IPEC) found in his favour. They’re still negotiating damages.
“It’s been all-consuming,” he says. “They had copied not only my [sofa design], they’d also called it the same name, and they were next door to me on Tottenham Court Road [in London]. Protecting your intellectual property is an absolute must … you only have so many great ideas in your life. If somebody nicks them every time, it’s really frustrating.”
Being copied is an issue Quinn has faced a number of times since opening Raft in 2000. In 2012, for example, furniture giant Harveys launched a sofa range with a remarkably similar design and branding. That infringement was resolved with a strongly worded cease and desist letter, but Quinn says constantly defending his rights is infuriating. “Do not get involved in anything legal unless you absolutely have to,” he adds.
According to a 2015 report from the Federation of Small Businesses, 30% of small businesses are reliant on IP for at least 75% of their revenue. But infringement is a big problem – a quarter of those asked have had issues in the past five years. One in three (29%) have not taken any action, citing the cost involved, a lack of resources, and lack of awareness of the steps to take, among other reasons.
That does seem to be changing. Law firm Hugh James found there was a 68% increase in the number of cases heard at the IPEC in 2016 (336 claims, up from 202 in 2015). The IPEC, which was rebranded from the Patents County Court in 2013, is positioned as small business friendly, with costs capped at £50,000 for claims under £500,000 and a small claims track, for claims under £10,000, where legal representation is not required.
“Before that, there wasn’t any cost certainty,” says Kelly Hudson, senior associate at McDaniel & Co, which represented Quinn in his recent case. “You could spend as much as you liked and you’d usually recover around 70% of your costs if you win. You could end up with a £600,000 bill.”
Hudson is one of the lawyers who provides free initial advice to members of Anti Copying in Design (ACID), a trade organisation that lobbies against copying in design. She understands small business owners’ apprehension about taking legal action but says doing so publicises your willingness to fight for your rights, which may put other potential infringers off. She’s also found including the ACID logo on a website can be helpful for members, because “that tells an infringer this person knows about their rights and has access to legal advice”.
The design sector generates £71.7bn for the UK economy, according to the Design Council’s latest research. Dids Macdonald, ACID’s vice-chair, co-founded the organisation 20 years ago after a career as an interior and product designer. Today, ACID represents thousands of designers, offering them free initial legal advice and support, negotiating with e-commerce platforms to remove copycat products, and lobbying the government to strengthen protection for small business owners. She talks anecdotally about instances of small business owners meeting with high street stores, only to later see exact copies of their products in store.
“It’s a very distressing thing to happen to any small business,” Macdonald adds. “I had a designer last week who had already spent £20,000 before she’d even got to the IPEC. That’s 10% of her annual turnover. Given that [designers] contribute so much to the UK economy, the question has to be asked, ‘Is the UK government doing enough? Is the legal model fit for purpose?’
“There’s also a huge opportunity for retailers who copy to say, ‘Actually we’ve had a lot of success because of the best of British design, now it’s our turn to pay it back and support designers, not send it to China or India to be copied’. Imitation isn’t the best form of flattery if it costs you your business.”
The Brexit effect
Macdonald recently visited Downing Street to speak to MPs and peers about the possibility of UK designers losing protection for their work in 28 member states after Brexit. Designers are overwhelmingly in favour of remaining in the single market – A Creative Industries Federation survey found that 96% of the sector voted to remain. In the UK, IP protection is much weaker than in Europe, Macdonald says. “At the moment, the evidence we have is that approximately 25% of sales could be lost if design companies don’t have automatic protection under unregistered rights.”
In Europe, protection is automatic once a design is made available to the public within the EU. These unregistered design rights automatically protect creators for three years. Designs which are registered with the European Union Intellectual Property Office are protected for up to 25 years (IP must be renewed every five years). In the UK, registered design rights cover the shape and configuration of a product and grant protection for 15 years. Two-dimensional designs such as graphics or textiles must be registered to be protected (at a cost of £50 per design).
The flaws in the UK’s system were highlighted last year when the supreme court threw out a case between PMS International and Magmatic Limited (creators of Trunki, the ride-along suitcase for children). Founder Rob Law says the outcome of his three-year battle has caused confusion for the community.
“It took a huge amount of money, a huge amount of management time [to fight it] … but as it was on our home turf, we felt it was worth doing and we felt we had a strong case,” Law says. “I’d registered the design in 2003 before I started showing it to manufacturers. The bigger issue wasn’t that we’d lost, it was that designers were now very unsure about their rights.
“We’re trying to lobby the government to at least embrace the European unregistered rights to bring criminal charges against people who copy on purpose. [Otherwise] we’ll have much weaker rules [after Brexit] than our European counterparts so it’ll be easier for Asian companies to launch their [copycat] products in the UK. It makes us less competitive, which is counterintuitive to growing the UK economy.
Law admits the case took its toll on the business’s finances, leading them to put expansion plans on hold for a year or two. “When you start a business all you aspire to do is have a successful product but no one tells you that as soon as you’re successful, you’re going to get copied, and exactly what to do about it. The only people who really make money are the lawyers at the end of the day.”
Macdonald was in court the day the judges ruled against Law. “Designers have been very disappointed by the judgment,” she says. “I think it was a complete and utter travesty of justice … but I’m not a supreme court judge.”
Taking pre-emptive action
To help members defend their unregistered design rights, ACID has developed a databank, where users can upload their work to prove the date on which they were conceived. Macdonald has met with online retailers, such as Alibaba, Amazon, Etsy and Not on the High Street, to encourage them to accept these databank entries as proof of IP. The organisation has also recently launched a brand enforcement service, developed in collaboration with Edinburgh startup SnapDragon, an online monitoring service.
SnapDragon works across more than 200 e-commerce platforms to find and remove counterfeit products. Founder Rachel Jones set up the business in 2015 after she successfully fought counterfeiters and other entrepreneurs asked for her advice. She had launched her first business, Totseat, in 2004.
“I’d done a lot of trademark registrations before we went to market. Within about five years, we were the market leading travel high chair in the category, which was totally fantastic. Then in 2011, a counterfeit was seized by customs.
“I thought, ‘I’m not going to let someone get away with this’. It was so important because we weren’t sure about the quality and safety aspect of the fakes. It could have ruined the brand.”
It was an expensive fight that took 18 months, but Jones says they rarely have an issue now (although she still keeps an eye on it). Her top tips to other small business owners, particularly those manufacturing products, are:
- Register trademarks where ever you can. They are the most valuable thing you can have.
- Keep accessible copies of images and marketing material to show when your design dates back to.
- Register your IP rights with the European Enforcement Database (it’s free).
- Include a secret ingredient in your product so you can discover very quickly if it’s a counterfeit or genuine (for example, with fabric products, you could put a piece of green thread down the left side).
- Know your brand in as many languages as possible so you can search for it online (think about adding hyphens and spelling mistakes too).
- If you find a counterfeit, buy it. Not only is it proof of a fake being sold, but you can alert your network if there are any safety concerns.
- Don’t be overwhelmed. It’s easy to get swept up in the issue and lose sight of the rest of the business. But with persistence and tenacity, you can win.
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