Wednesday, 28 April 2021

IP strategy for FinTech Start-ups and SMEs - and Other Matters


Jane Lambert

On Monday the Intellectual Property Awareness Network ("IPAN") celebrated World Intellectual Property Day with a seminar entitled IP strategy for FinTech start-ups and SMEs. I was one of the speakers and I shared the platform with Alessandro Hatami, Fernando Da Cruz Vasconcellos, Xuan-Thao Nguyen and Janice Denoncourt. Amanda Solloway MP, UK Minister of State for Energy and Intellectual Property sent a recorded video message as did the Dean of Nottingham Law School. Well over 100 people attended the event and I noticed some very well-known names on the attendees' list.

I have been following the law of what is now called FinTech even longer than I have been practising intellectual property law.  Indeed, as I said in Celebrating World IP Day, (26 April 2021 NIPC News), it was FinTech that led me to intellectual property.   The reason for my interest is that I was legal adviser to VISA International for Europe, the Middle East and Africa in the early 1980s I discussed that time n my profile:

"Banks were developing electronic funds transfer systems which gave rise to many new legal issues on such matters as authentication, competition, privacy, software development transactions, telecommunications regulation and trans-border data flow. I wrote a number of articles and other publications including "Electronic Funds Transfer: the Emerging Legal Issues" for the Law Society Gazette in 1984 and contributed sections on computer contracts, data protection and electronic banking to Atkin and the Encyclopedia of Forms and Precedents. I also addressed The International Bar Association in Vienna in 1984 and the International Chamber of Commerce conference on electronic banking in Madrid in 1986."

In 1985 I answered an advertisement in Inner Temple for tenants for chancery chambers in my birthplace Manchester.  I was offered a tenancy and returned to independent private practice at the English bar.  However, I continued to write about FinTech and, occasionally, I was instructed in FinTech cases.

Prof Denoncourt invited me to contribute to Monday's webinar after I  had published a case note on Judge Melissa Clarke's judgment in Communisis Plc v The Tall Group of Companies Ltd and others [2020] EWHC 3089 (IPEC) (Fintech Patents - Communisis Plc v The TALL Group of Companies Ltd. 22 Nov 2020).  That was an action for the infringement of a patent for a method of generating a payment/credit instrument and a counterclaim for revocation on the grounds that the invention was not patentable and lacked an inventive step.  The learned judge held that the patent was invalid on both grounds and that the defendant's product did not infringe.  The reason I wrote about Communisis is that it was about FinTech and disputes over such patents are relatively uncommon, at least in the United Kingdom.

In Fintech Startups – is IP important? 12 Oct 2016 The FinTech Times. Manisha Patent noted:

"It’s worth observing the “unicorns” of the fintech world when considering IP. Of the top 35 unicorns, less than 25% have filed for one or more patents. This means that the average fintech is far from IP-intensive and more centered on commodified software technology than the mythology one would want to believe."

That was the case when I was at VISA during the 1980s and it remains the case now.  As I observed in Kalifa Review fails to mention Patents for FinTech Inventions on 26 Feb 2021 in NIPC Invention, the Kalifa Review of UK Fintech hardly mentioned intellectual property at all and it did not discuss the difficulties of patenting FinTech inventions.

I discussed some of those difficulties in How far (if at all) is it possible to protect Innovation in Financial Technology? in IP Yorkshire as long ago as 12 Aug 2014 and more recently in Protecting FinTech Invention on 27 April 2017 in NIPC Law.   In the first of those articles I wrote:

"The problem is that s.1 (2) of the Patents Act 1977 declares that
'the following (among other things) are not inventions for the purposes of this Act, that is to say, anything which consists of -
(a) a discovery, scientific theory or mathematical method;
(b) a literary, dramatic, musical or artistic work or any other aesthetic creation whatsoever;
(c) a scheme, rule or method for performing a mental act, playing a game or doing business, or a program for a computer;
(d) the presentation of information......'
Much of the technology used in the financial services industry are computer programs and their output consists of methods of doing business and the presentation of information."

In the second article, I added:
"Most FinTech innovation will be software implemented. Software is difficult to patent in England and indeed the rest of Europe because of the exclusion of computer programs "as such" by s.1 (2) (c) of the Patents Act 1977 and art 52 (2) (c) of the European Patent Convention. Moreover, patents are expensive to get and maintain and even more expensive to enforce. There must be full disclosure as to how they work. A 20-year term is likely to exceed many times the economic value of the technology."

One of the grounds on which the claim in  Communisis failed is that the invention was not patentable as a mathematical method and program for a computer.  Communisis is therefore an object lesson as to why patents are not usually a good way of protecting FinTech innovation.

There are alternative ways of protecting such innovation.   Flowcharts, specifications, screen output, source and object code, manuals and the contents of databases can be protected from unlicensed reproduction by copyright.  The disclosure and use of sensitive technical or commercial invitation can be prevented by the law of confidence or the new Trade Secrets Directive (Directive (EU) 2016/943 of 8 June 2016 on the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use and disclosure (OJ 15.6.2016 L 157/1). Goodwill accruing to a brand can be protected by the registration of the brand name or logo as a trade mark. Finally, there is first-mover advantage.   

My colleagues' presentations were excellent.   One important takeaway for me was the lead that China has taken over the rest of the world in FinTech. That was stressed by Prof  Xuan-Thao Nguyen in her presentation but also mentioned by Alessandro Hatami in his. Prof  Xuan-Thao reminded the audience that China applies for some 1.4 million patents every year and has now supplanted the USA as the main user of the Patent Cooperation Treaty (see China Increases its Lead in International Patent Applications 11 March 2921 NIPC News).  She also mentioned the speed with which the Chinese courts can dispose of infringement and invalidity actions. China has effectively eliminated cash for most transactions.  Even beggars accept electronic payments there (see Beggars in China go cashless, but there's more than what meets the eye 2 July 2018 Business Today).

Our moderator on Monday was John Ogier who is Chair of IPAN.  He was previously Registrar of the Guernsey Intellectual Property Office. Guernsey has some curious intellectual property laws.  It is one of the few jurisdictions in the world to protect image rights (see Jane Lambert Guernsey's Image Rights Legislation 2 Jan 2013 NIPC Law and Kate Storey Guest Post - Kate Storey: Guernsey's Image Rights  8 Jan 2013 NIPC Law).  The article by Kate Storey is particularly interesting as she helped to draft the legislation when she was with Collas Crill.   Guernsey also has its own patent law even though it has no facilities of its own for examinations and searches.  The patents of any country that is listed in Sched. 2 to The Registered Patents and Biotechnological Inventions (Bailiwick of Guernsey) Ordinance, 2009 can be registered without any examination in Guernsey.   As I said tn Guernsey's Patent Law 18 Jan 2011 NIPC Law, China, India, New Zealand, Russia and the USAQ are listed as well as the EPC countries but not Australia or South Korea.

The evening finished with a Q & A.   I was asked what could be done to reduce the cost of enforcement.  I said that a lot had already been done with the adoption of Lord Justice Arnold's proposals in 2010. These limited trials to 2 days, recoverable costs to £50,000 for trial and £25,000 for an account on inquiry and damages to £500,000. I added that for most IP claims under £10,000 that could be tried in one day there was a small claims track. CPR Part 27.14 limited recoverable coss to a few hundred pounds. I recommended greater use of alternative dispute resolution such as ICANN's UDRP for domain name disputes, the IPO's opinion service for disputes over the infringement and validity of patents and the Company Names and the Company Names Tribunal. 

I reminded the audience that intellectual property law did not exist solely for the benefit of intellectual asset owners. The purpose of IP laws was to strike a fair balance between rights holders, consumers and competitors.  The high cost of litigation kept patents, trade marks and designs on the register which should not be there. 

Finally, I observed that the Unified Patent Court Agreement that Mr Boris Johnson himself had ratified in his capacity as Foreign Secretary on World IP Day 2018 would have reduced the cost of patent litigation considerably but that ratification had been reserved by none other than our fellow panellist Amanda Solloway MP on 20 July 2020. I had been looking forward to asking the Minister for the reason for that volte-face (see Jane Lambert Has the Volte-Face on the Unified Patent Court Agreement been worth it? 25 April 2021 NIPC Brexit). Sadly, the Minister was not there to justify herself.

Anyone wishing to discuss this article or any of the topics discussed in it should call me on +44 (0)20 7404 5252 during office hours or send me a message through my contact form.

Tuesday, 17 December 2019

Useful Seminars at the British Library

British Library
Author: Jack1956  Copyright waived by the owner

Jane Lambert

If you own, manage or invest in a startup or other small business, you should check out the Business and Intellectual Property Centre at the British Library at 86 Euston Road. If you don't know the area it is almost next door to St Pancras station and a short walk from King's Criss and Euston.  It has a massive collection of business publications with access to even more online.  It is open to anyone with a reader's card which can be obtained upon showing evidence of identity and residence.  The Library also has Linkedin and Facebook groups.

If you are new to the Centre you could do worse than attend the free workshop on 13 Jan 2020 entitled Introduction to using the  Business and IP Centre.  The seminar starts at 10:30 and continues to 13:00. atter which there will be a chance to meet the speakers, staff another attendees informally over refreshments  On the same day, there is an introduction to intellectual property entitled Can I protect a business idea starting at 14:00 and ending at 17:00 which is also free.   If you miss either of those talks they are repeated on 27 Jan (see Introduction to using the Business & IP Centre and Can I protect a business idea 27 Jan 2020).

After you have attended these introductory lectures you mat want to try some of the others.  Seminars that I would attend if I lived nearer London include
Having founded and chaired the inventors' clubs at Leeds, Liverpool and Sheffield, I am delighted to see that the British Library will launch an Inventos Club on 27 Jan 2019 between 18:00 and 20:49 and I will support that in any way I can,

Anyone wishing to discuss this article or any of the issues mentioned in it should call me on 020 7404 5252 or send me a message through my contact page,

Wednesday, 2 January 2019

Branding - Catching Them Young

Court Room at the Bangkok KidZania
Author ProjectManhattan
Licence Creative Commons Attribution-Share Alike 4.0 International

On Friday, the son of my former ward celebrated his 8th birthday. For a birthday treat his parents and I took him to the London KidZania which describes itself as "An Indoor City Run by Kids." Located in the Westfield shopping centre in Shepherds Bush it consists of 75,000 square feet of replica child size shops and offices on two floors where children aged between 4 and 14 can try their hands at all sorts of occupations.

Children and their accompanying adults pass through immigration where they are issued with wristbands. Activities are paid for with kidZos which is KidZania's private currency though food and drink have to be purchased in sterling.  Activities for adults are limited to queueing with children, watching their role play, consuming refreshments and riding a bus.

Like a lot of children's attractions, KidZania is a transatlantic concept, but from Mexico rather than the United  States.  The first KidZania opened as  La Ciudad de los NiƱos (Kids' City) in Mexico City in 1999.  La Ciudad was rebranded as Kidzania in 2006 when a second children's city was opened in Monterey. The Mexican company KidZania S.A.P.I. de C.V. has registered the word KIDZANIA as an EU trade mark for a wide range of goods and services in classes 6, 16, 20, 21, 25, 41, 42 and 43 with effect from 3 Jan 2003. It also holds many other trade marks and trade mark applications relating to KidZania around the world.

The company has franchised KidZania theme parks in 20 countries, mainly in Latin America (Brazil, Chile, Costa Rica and Mexico) and Asia (India, Indonesia, Japan, Kuwait, Malaysia, Philippines, Saudi Arabia, Singapore, South Korea, Thailand, Turkey and the United Arab Emirates).  So far, there are none in the United States and only three in Europe (Lisbon, London and Moscow) bit that is about to change with planned openings in Chicago, Dallas, New York and Paris.

Activities offered at the London KidZania are branded by Alder Hey Children's NHS Foundation Trust, Aljazeera Media Network, the Bank of England, British Airways, Cadbury, Costa, Dorsett International, Eat Natural, Gourmet Burger Kitchen, Global, H & M, Hamptons, Innocent, K-Market, Metro, Middlesex County Cricket Club, Mission Deli, Nintendo, People's Dispensary for Sick Animals, Roland, Snazaroo, The Original Tour and other organizations.  Alder Hey hospital, for example, allows children to role play as baby care nurses, paramedics and even surgeons.  Cadbury instructs them in chocolate making. 

About the only role plays for which no provision was made in London was the law which I would have found strange as a child for I knew that I wanted to be a barrister from a very early age. However, Wikipedia reports that there is a court at the Bangkok KidZania and there are others in other cities. 

The investment of some of those brand owners is impressive.  British Airways, for example, has contributed part of an aircraft fuselage and flight simulation equipment and many members of the KidZania staff wear British Airways uniforms.  Clearly, those brand holders see marketing or other opportunities in KidZania.

Our 8 year old tried his hand at print and TV journalism with Metro and Aljazeera, chocolate making with Cadbury and flight training with British Airways among other activities.  There was quite a lot of queueing for one or other of his parents during which time I relaxed in Costa's coffee shops. I also watched him perform in Aljazeera's TV studio and I have a new keyring with a photo of the little boy in an airline pilot's uniform.

Anyone wishing to discuss this article or the legal protection of branding generally by trade mark registration, the law of passing off, geographical indications or otherwise should call me on 020  7404 5252 during usual office hours or send me a message through my contact page.  I should also like to wish all my readers a very happy New Year.

Monday, 15 January 2018

The State of Small Business in London

Jane Lambert

In Mapping Enterprise 14 Jan 2018 NIPC News I reported on the research into small and medium enterprises ("SME") across the UK that Nesta and Sage  have carried out and published in The State of Small Business: Putting UK entrepreneurs on the map their reports and on The State of Small Business website.

With 1,010,075 SME, London is the region with the largest number of small businesses. There are 37.6 startups for every 1,000 of the population which is more than 3 times the national average. However, London also has the biggest proportion of business failures (18.0 per 1,000 compared to 6.8 for the national average).  Detailed information for each local authority appears on the State of Small Business website.

Glancing at selected local authorities the City of London has 17,130 SME employing 156,145 persons of whom 41,521 are in financial services, 40,492 in professional, scientific and technical services, 18,989 in business administration and support and 16,925 in information and communication technologies. Financial services are by far the most productive sector with the greatest productivity. The City has 5 accelerators, 2 incubators and 126 flexible work spaces.  Westminster has 45,850 SME employing 325,857 persons in a wide range of business services.It  15 accelerators, 5 incubators and 257 flexible work spaces. By contrast, Lewisham has only 9,370 SME employing 30,803 and has no accelerators, incubators or flexible works spaces.

Anyone wishing to discuss article or SME generally should call me on 020 7404 5252 during office hours or send me a message through my contact form.

Tuesday, 26 September 2017

Thought for Food: IP and Takeaway and Restaurant Innovation

Jane Lambert

What possible link could there be between IP and fast food?  Lots when you think of it. Trade Marks, passing off, geographical indications and of course all sorts of improvements in food preparation and distribution technology that can be patented.

That will explain why Gary Townley of the Intellectual Property Office will be speaking and exhibiting at the Takeaway & Restaurant Innovation Expo  2017 that takes place at the ExCel Centre today and tomorrow. Gary is also presenting a course on IP for the food and drink industry at Northampton Central Library on Thursday.

IP in the production, preparation, marketing and distribution is a subject of which I have had a lot of experience having been in some important cases and having advised and represented some rising stars in the industry. If you are engaged in agriculture, food preparation, distribution or catering I should be glad to talk to you. Call +44 (0)20 7404 5252 during office hours or send me me a message through my contact form.

Monday, 25 September 2017

Mums Enterprise Roadshow - London

The Business Design Centre
Author Matt Brown
Licence Creative Commons Attribution 2.0 Generic
Source Wikipedia

Jane Lambert

In my Inventors' Club blog today I mentioned the Mums Enterprise Roadshow which is holding a series of "child-friendly work and business exhibitions helping mums on a mission whether that be retraining, finding flexible work, starting up or growing a business."

The first of those events is taking place at the Business Design Centre in Islington today. According to the event webpage, there are some interesting talks and exhibition.  If you happen to be in London today and have the time it would seem to be an event that is well worth attending.  The Centre is very close to Angel and Highbury and Islington tube stations and is on several bus routes. Parking is not quite so easy if you come by car, but the website says there is space for 250 vehicles at the nearby Hilton.

If any of my readers who attend the event would care to report on what they saw and did, I should be very glad to publish what they have to day.

Should you want to discuss this article or innovation in general, call me on 020 7404 5252 during office hours or send me a message through my contact form

Friday, 10 February 2017

London leads Start-up and Scale-up Tables for Digital Enterprise

Author Dbachman
Creative Commons Licence

Jane Lambert

The European Digital City Index (EDCi) was produced by Nesta as part of the European Digital Forum, EDCi provides information about the strengths and weaknesses of local economies in relation to the formation and growth of digital businesses.

The index applies a number of different criteria in drawing up its index which are set out in the Methodology section of its website.  Applying those criteria, Nesta produced the following table of leading European ciies for start-ups:
  1. London
  2. Stockholm
  3. Amsterdam 
  4. Helsinki
  5. Paris
  6. Berlin
  7. Copenhagen
  8. Dublin
  9. Barcelona
  10. Vienna.
For scale-ups, the table was:
  1. London
  2. Stockholm
  3. Paris
  4. Helsinki
  5. Amsterdam
  6. Copenhagen
  7. Berlin
  8. Munich
  9. Dublin
  10. Vienna
Why London? ESCi explains: 
"The city’s substantial financial sector is undoubtedly a major benefit: not only is London’s venture capital industry the most developed in Europe, but the presence of many financial services firms helps promote a growing number of fintech and crowdfunding startups, like Seedrs, Funding Circle, Transferwise, Wonga and DueDil. London is also the accelerator and coworking capital of Europe, as well as boasting a number of world-class universities. Its vibrant startup scene is supported by a strong creative cluster around ‘Silicon Roundabout’ and, despite Brexit fears, the city still attracts significant talent from all over the world."
Successful start-ups include Deliveroo, Made.comAppNexus and Borro.  ShazamTransferwiseWonga, FarFetchZoopla and are examples of successful scale-ups.

If anyone wants to discuss the legal aspects of starting a digital or any other business, call me on 020 7404 5252 or send me a message through my contact form.