0 0 0 1 1 1 0 0 0 0 0 0 1 1 0 0 1 0 0 0 1 1 1 0 0 0 0 0 0 1 1 1 0 0 0 0 0 0 1 1 1 0 0 0 0 0 0 1 1 1 0 0 0 0 0 1 1 1 0 0 0 SPECIAL REPOR T SCO TL AND 0 0 0 1 1 1 0 0 0 0 1 1 0 0 10 0 0 0 0 1 1 0 1 0 0 0 0 0 1 1 0 1 0 0 10 0 10 0 10 0 10 0 10 10 0 10 0 10 0 1 0 0 1 0 0 1 0 0 0 1 0 1 0 0 1 0 0 0 1 0 1 0 0 1 0 00 1 1 0 0 0 0 0 1 0 1 1 0 0 0 0 0 1 0 1 1 0 0 0 0 1 10 10 0 0 0 0 0 1 0 1 1 0 0 0 0 0 1 0 1 0 0 00 1 1 10 0 1 0 0 0 1 0 1 1 0 0 0 0 0 1 0 1 1 0 0 0 0 0 1 0 1 1 0 0 0 0 0 1 1 10 0 0 0 0 1 1 0 1 0 0 0 0 0 1 1 10 0 0 0 0 0 1 1 0 1 0 0 0 0 0 1 1 0 1 0 0 0 0 0 1 1 0 1 0 0 10 0 10 0 10 0 10 0 10 10 0 10 0 10 0 10 0 0 0 10 0 0 1 0 1 0 0 0 1 0 0 1 1 0 0 10 0 0 0 1 1 1 0 0 0 0 0 0 1 1 1 0 0 0 0 0 0 1 1 1 0 0 0 0 0 0 1 1 1 0 0 0 0 1 10 1 0 0 0 0 0 0 1 1 1 0 0 0 0 1 1 0 0 0 0 0 0 10 0 1 1 0 1 0 0 0 0 0 1 1 0 1 0 0 0 0 0 1 1 0 1 0 0 0 0 0 1 1 0 1 0 INTELLECTUAL PROPERTY 0 0 0 1 1 0 1 0 0 0 0 0 1 1 0 1 0 0 0 0 0 1 1 0 1 0 0 Maximising the investment in your IP 0 0 0 1 1 1 0 0 0 0 0 0 1 1 1 0 0 0 0 0 0 1 1 1 0 0 0 0 1 1 0 0 0 10 0 1 10 10 0 0 0 0 0 0 1 1 1 0 0 0 0 0 0 1 1 1 0 0 0 0 1 10 10 0 0 0 0 0 1 1 0 1 0 0 0 0 0 1 1 0 1 0 0 0 1 0 1 0 0 10 0 0 10 0 0 1 0 1 0 0 0 1 0 0 1 0 1 0 0 10 0 0 1 1 0 0 10 0 Social 0 0 1 In the driving seat 1 Solutions Ivory Towers 0 0 0 0 0 0 1 1 1 0 0 0 0 0 1from How to your She didn’t let0 the copycats IP and research 1to talkusing 1 0 0 0 0 0 0 1 1 1 customers AI get away with it the universities 0 0 0 0 0 0 1 1 1 0 0 0 0 0 0 1 1 1 10 0 10 0 10 0 2
IP
in association with
Your business is unique. How it grows should be too. We know that every business has different ambitions, which is why we have flexible solutions and plenty of know-how to shape the perfect plan for you.
Get in touch with: David Hayers Head of Growth Finance 07734 111 346
cbonline.co.uk
Steven Clark Senior Director, Growth Finance 07834 610 037
Nick Edgar Senior Director, Growth Finance 07539 750 636
Qualifying criteria applies
WELCOME CONTENTS 04 10 18
22 26
KNOW YOUR WORTH Welcome by David Hayers from Clydesdale and Yorkshire Banks
KEEPING A SECRET Stephen Robertson explains why trade secrets count
Intellectual property (IP) sounds like it should be the sole domain of big companies – a world full of inventions being dreamt up by boffins wearing white coats in sterile laboratories. Yet the Clydesdale and Yorkshire Banks IP100, the UK’s first IP league table, proves businesses of all shapes and sizes invest in IP, whether it’s through brand and reputation, patents, software, critical
I P 10 0 - T H E R E S U L T S
databases, or trade secrets.
Findings from the first IP League Table project, along with some analysis broken down per industry sector
The IP100, compiled by Metis Partners in association
S O LV I NG A S O C I A L PROBLEM
then managing that IP and commercialising it. They are
How to talk to your customers using AI
want to attract investment or even a potential buyer; they
FROM THE HALLS OF AC ADEMIA University research and its IP implications
30
SPECIAL REPORT INTELLECTUAL PROPERTY
IP IS IN THE DRIVING SEAT How to get aggressive with the copycats
with BQ, celebrates companies that are not just carrying out research and development to create their IP but are increasing the value of their firms, which helps when they are also making it harder for rivals to compete with them. In this special BQ2 supplement, we reveal which companies are making the running in the first IP League Table. In the spring, we will unveil further entrants into the IP league table from across the UK. Case studies from three companies illustrate the broad range of businesses taking part in the league, while we also profile three of the IP Champions that advise members of the IP100 Club.
In association with
IP 10 0 in association with
READ ONLINE 40
MESSAGES FROM THE DEEP Managing IP in the offshore sector
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room501 Publishing Ltd, Spectrum 6, Spectrum Business Park, Seaham, SR7 7TT. www.bqlive.co.uk. Business Quarter (BQ) is a leading national business brand recognised for celebrating and inspiring entrepreneurship. The multi-platform brand currently reaches entrepreneurs and senior business executives across the North East, Scotland, Yorkshire and the West Midlands. BQ has established a UK wide regional approach to business engagement reaching a highly targeted audience of entrepreneurs and senior executives in high growth businesses both in-print, online and through branded events. All contents copyright © 2015 room501 Ltd. All rights reserved. While every effort is made to ensure accuracy, no responsibility can be accepted for inaccuracies, howsoever caused. No liability can be accepted for illustrations, photographs, artwork or advertising materials while in transmission or with the publisher or their agents. All profiles are paid for advertising. All information is correct at time of going to print, November 2015.
04
WELCOME bqlive.co.uk
Clydesdale and Yorkshire Banks are proud to sponsor this new league table. It will give much needed recognition to a wide range of companies that have already started to commercialise their intellectual property (IP)
Know your true value IP-rich businesses are key growth drivers of
considerably in the past few decades from one
shareholders or other lenders had an accurate
the UK economy and yet have often found it
of manufacturing, industry and production
understanding of their business’ intangible
challenging to secure debt finance to accelerate
to one of knowledge, service and innovation.
assets.
their growth plans. This partnership reinforces
Traditional manufacturers still play an important
Whether they are a manufacturer in the
the banks’ commitment to this critical sector
part in our economy, but the emergence of
automotive supply chain, or an IT software
of the economy and is just one example of
technological innovation is something we have
developer, it’s vital that businesses have an
the innovative approach that we are taking to
the expertise and desire to support.
accurate understanding of the value of their
funding small and medium-sized enterprises
As well as being sponsors of the table, we
intangible assets and the difference this can
(SMEs) in the UK. Our Growth Finance Unit has
believe the opportunities to work with the high-
make to their business.
been in place for some years and we recently
growth IP-rich companies featured in the IP100
With many firms having few or no physical
created an Emerging Technology Unit, both of
league table is an illustration of the focus we are
assets, it becomes increasingly important they
which are designed to support high-growth
bringing to the SME sector.
have a full understanding of their business’ true
businesses in the sector.
Our own research suggests the majority of SMEs
value. Having this knowledge could significantly
The creation of this team is part of our
in the UK are underestimating their true worth
enhance the possibilities of accessing finance for
partnership with the British Business Bank under
by not taking into account the value of assets
growth, with profitability and cash generation
its Enable Guarantee programme, announced
such as trademarks, patents and other IP. We
– rather than the quality of the asset base –
earlier this year. Up to £125 million of new
believe only one in four SMEs has ever taken
becoming an ever more important consideration
lending by Clydesdale and Yorkshire Banks
steps to value its non-physical assets. As a result,
for those lending or investing. n
will help more small businesses achieve their
those businesses may not be making the most
growth ambitions.
of growth opportunities as around half of those
The nature of British business has shifted
questioned said they didn’t think their bank,
“As well as being sponsors of the table, we believe the opportunities to work with the high-growth IP-rich companies featured in the IP100 league table is an illustration of the focus we are bringing to the SME sector”
David Hayers is Head of Growth Finance at Clydesdale and Yorkshire Banks.
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BUSINESS UPDATE
Eye on the prize: Chemical and life sciences aim to increase turnover by £5.6bn
IP at core of manufacturing
and supportive regulatory environment and it is
The next step in the process is for a series of
Scotland’s chemical and life sciences sectors
also a great place to live in. In addition, we have
task groups to be set up. Each group will be led
have put intellectual property (IP) at the heart of
brilliant young scientists and engineers studying
by the private sector, with Scottish Enterprise
their manufacturing strategy.
at world-class universities.
managing the groups.
The two sectors aim to increase their combined
“Pull all these elements together and Scotland
Scottish business minister Fergus Ewing said:
turnover by £5.6 billion by 2020 – replicating
should continue to compete successfully on a
“Achieving our goals means generating
the total economic output from Grangemouth,
global level for an increasing number of high
additional turnover of £5.6bn a year across the
the nation’s largest industrial complex.
value chemical and life sciences projects.”
two sectors, which is equivalent to replicating
Their joint strategy includes: commercialising
Together, the chemical and life sciences sectors
the output of Grangemouth, Scotland’s largest
research by translating IP into opportunities
already directly employ 12,300 staff, with
industrial complex.
for manufacturing; strengthening the
businesses in the sectors turning over £8.7bn in
“This will be challenging, but it’s essential that
manufacturing base by identifying and filling
total each year and generating £1.9bn of gross
we clearly state the extent of our ambitions if
gaps in the facilities available to support
value-added to the economy.
we are to grasp the opportunities.
development and growth; and changing
Caroline Strain, head of chemical sciences
“These sectors will continue to make an
perceptions of manufacturing to recognise that
at economic development agency Scottish
increasingly important contribution to
it is a highly-skilled and well-paid career choice.
Enterprise, said: “We can offer the supply
our economy, through developing our
They will also focus on highlighting the benefits
chain and infrastructure essential for successful
manufacturing base, internationalisation and
of “re-shoring” manufacturing to Scotland from
manufacturing.
inclusive growth.”
overseas and the strength of the supply chain
“Scotland is also well-connected internally and
Ewing added: “The future possibilities mean
infrastructure, and on attracting investment
externally, from collaboration between public,
that the opportunities in the life sciences and
from overseas companies.
private and academic sectors, to transport links.
chemical sectors are tremendous for young
Dave Tudor, vice-president at drugs maker
“And we have a track record of academic
people today.
GlaxoSmithKline, said: “Scotland has all
excellence and industrial research and
“I would like to promote the work of life
the necessary attributes and capabilities to
development.
sciences and chemical sciences manufacturing
deliver strong, innovative and competitive
“We’re calling on national and international
sectors so that people in Scotland and beyond
manufacturing in life and chemical sciences.
companies to talk to us to find out more about
associate them with Scotland, in the same
“Scotland is one of the top five countries in the
how they could benefit from all the advantages
way that they do with whisky, food and drink,
world for IP generation, there is a competitive
that Scotland has as a European or global base.”
finance, oil and gas, and renewables.”
BUSINESS UPDATE bqlive.co.uk/breakfast
07
QUOTE OF THE QUARTER “If countries and cities want to have economic development, they have to rise to a level of tolerance that enables them to have the kind of diverse dialogue that creates innovation.” Claudia Brind-Woody, managing director for global intellectual property licensing at IBM
WEBSITE OF THE QUARTER www.brightideascotland.com Helps Scottish inventors work out if their idea has commercial potential
IP crime falls FEWER intellectual property (IP) crimes were reported to the Crimestoppers hotline during the past year, according to the latest official figures. The Intellectual Property Office (IPO) reported that alcohol, clothing, DVDs, footwear and tobacco are still the most frequently investigated counterfeit products. Baroness Neville-Rolfe, UK IP minister, said: “IP crime is not victimless. It includes the public buying counterfeit alcohol and cigarettes which can even be fatal. “Some car boot sales and markets can be crime hot-spots and we have seen growth in counterfeit goods being sold on social media.“The IP Crime Group report raises awareness of the dangers
Jamie Oliver in Innovate UK challenge
and consequences of counterfeiting and
BUSINESSES have been given the chance to work with celebrity chef Jamie Oliver to develop
to the group for its good work.”
ways for the public to measure the nutrition of their food. Innovate UK, formerly the UK
Giles York, chief constable at Sussex
Government’s Technology Strategy Board, offered five companies £35,000 each to collaborate
Police and IP crime lead for the
with big names and come up with ways of measuring health and well-being. While Oliver’s
Association of Chief Police Officers
project focused on nutrition, insurer AXA chose to look at measuring mental well-being in
in England and Wales, added: “Co-
the workplace, while private healthcare firm Bupa looked at recording data from patients.
ordinated action is the key to tackling
Saga focused on self-monitoring and tracker technology for older people, with technology
IP crime. “By working together, the IP
firm Toshiba looking at health monitoring for teenagers. The competition, which was open
Crime Group continues to bring focus
to companies in the UK and the wider European Union, closed on 27 October. Innovate UK is
and determination into the fight against
due to announce the names of the five winning businesses on 18 December. The winners are
IP crime, and this report shows the
expected to conduct trials with their partners for at least three months, with the trials expected
welcome effect that is having. “There
to be launched in autumn 2016. Innovate UK said: “Through our IC tomorrow programme,
are many challenges ahead, particularly
we are looking for proposals from companies with innovative digital ideas relevant to the
in tackling the online sale of counterfeit
quantified self-movement – including self-tracking, monitoring and sensing – to improve
goods, but we hope that next year will
wellbeing. “The companies will not only benefit from funding, but also the opportunity to
bring even more success in reducing
collaborate with commercial partners to accelerate development of their technologies.”
this problem.”
copyright infringement. I am grateful
08
BUSINESS UPDATE bqlive.co.uk
UK signs Singapore deal SINGAPORE has sealed a deal with the UK to work more closely together on issues including copyright, designs, patents and trademarks. A memorandum of understanding (MOU) was signed between the UK Intellectual Property Office and the Intellectual Property Office of Singapore (IPOS). Baroness Neville Rolfe, UK intellectual property (IP) minister, said: “Singapore is an influential voice on issues of IP in the Association of Southeast Asian Nations (ASEAN) region. “Support from IP leaders is invaluable
Kit Kat ‘likely’ to lose trademark case
in developing robust global frameworks
Chocolate maker Nestlé is likely to be foiled in its efforts to register the design of its Kit Kat
across the ASEAN region.
bar as a trademark, according to a legal expert. David Woods, a legal director in the Glasgow
“This MOU will allow the UK and
office of international law firm Pinsent Masons, said a judgement handed down by the Court
Singapore to share best practices in
of Justice of the European Union (CJEU) would be welcomed by rival Cadbury, which has
areas such as intellectual property rights
opposed Nestlé’s efforts to protect its design. Woods said: “Although it will ultimately fall to
protection, IP-related research and the
the High Court in London to determine the outcome of this case, the CJEU’s ruling outlines
streamlining of IP court processes.”
the framework legal principles that the High Court will need to consider when issuing its own
Tan Yih San, chief executive of IPOS,
judgment. “The principles confirmed by the CJEU strongly support findings made by the UK’s
added: “We are pleased to formalise our
Intellectual Property Office previously when it denied Nestlé’s attempt to register the shape
cooperation with the UK on innovation
of Kit Kat bars as a trade mark. Nestlé will find it difficult to show that Kit Kat bars are trade
and intellectual property rights.
mark-able in light of the CJEU’s ruling.”
“This MOU reaffirms our mutual
The case hinges on the EU Trademark Directive, which the CJEU said would only allow a design
commitment to increase cross-border
to be registered if the shape wasn’t determined by the “nature of the product” or to reach a
IP cooperation and provide a robust
“technical result”, such as “the breaking of the bars and determination of portion size”.
IP system for businesses and creators looking to expand into the UK, and those seeking to venture into the
IPO’s online design service
ASEAN region.”
THE Intellectual Property Office (IPO) has launched an online service that allows customers to apply to
Singapore is used by many British
register a single design.A beta version of the online service is now available through the IPO’s website,
businesses as a hub for serving South-
which means that the new service is still undergoing tests. The IPO said: “We have been working
East Asia, including many whisky
closely with our customers, who have told us that the absence of an online service is a barrier to
companies, which ship Scotch to the city
them applying to register their designs. “Customers are at the heart of our service development and
state and then distribute it around the
we have used feedback from them to create this initial beta release and will continue to use their
neighbouring countries.
feedback to iterate and improve the service. “This is the first time customers have been able to register a design digitally in the UK through the IPO and offers an alternative to our current paper process.”
“This is the first time customers have been able to register a design digitally in the UK through the IPO and offers an alternative to our current paper process.”
Susan Snedden, director of IP and technology at law firm Maclay Murray & Spens, says: “Initiatives such as this, which simplify the IP protection process for individuals, are always welcome in principle. Indeed, registered designs can provide a useful form of IP protection, especially where patents are not suitable. “However, it is always worth considering taking professional advice before applying for registered IP rights. Taking advice will help individuals and small and medium-sized enterprises get the strategic input they need to ensure they apply for the most apt form of IP right for them, and avoid pitfalls which could lead to their IP right subsequently being declared invalid.”
TANGIBLE ASSETS ARE ONLY THE TIP OF THE ICEBERG
INTANGIBLE ASSETS ACCOUNT FOR UP TO 80% OF A COMPANY’S VALUATION! LET US SHOW YOU HOW TO MONETISE THEM! METIS PARTNERS - AN INTELLIGENT APPROACH TO IP +44 (0)141 353 3011 | INFO@METISPARTNERS.COM | WWW.METISPARTNERS.COM
10
AS I SEE IT bqlive.co.uk
Keeping r u o y f o d l ho secrets Stephen Robertson, founder of the award winning commercial intellectual property firm Metis Partners, explains why trade secrets have become one of the most overlooked parts of protecting a company’s IP CAN you keep a secret? Well, it seems that many of us just can’t keep our mouths shut when it really matters. A survey by Symantec in 2013 found that 50% of employees who had left their job or lost their job had kept or retained confidential information, with 40% of them planning to use that information in their new role, while 68% of companies do not take steps to ensure that their employees aren’t using confidential competitive information from third parties. Those figures make for worrying reading. While most businesses are beginning to recognise the advantages of formally protecting their intellectual property (IP) through copyright, patents or trademarks, there’s still a woeful lack of attention given to protecting the knowledge that lies within companies. When I’m advising companies on their IP, one area has jumped out as being under-used and
AS I SEE IT bqlive.co.uk
11
under-appreciated – namely trade secrets. The
as registered or formal IP. Software, for example,
help companies to create their trade secrets
term “trade secrets” covers a narrow range
is considered to be easier to patent in the United
policy and work out which elements of their
of critical confidential information or know-
States than in the UK. However, a trade secrets
know-how underpin their revenue generation
how that underpins competitive advantage.
policy will serve to maximise the protection of
is through trade secret workshops. These
Examples include unpatented technology,
the valuable source code. Implementing controls
both help inform companies and staff on the
critical databases, formulae, secret ingredients,
relating to which members of your team have
importance of their trade secrets and how they
algorithms, or proprietary software – in a
access to source code is the essential first step in
can go about creating that all-important culture,
nutshell, any information that you wouldn’t
protecting your software. If your proprietary and
so that staff understand why their trade secrets
want an employee putting on a USB stick and
critical company information is un-patentable
need to be protected. It’s one of the cheapest
taking to one of your competitors.
for any reason, you can always choose to
and easiest forms of IP protection. Trade secrets
Storing proprietary and important data as
protect it as a trade secret.
are often the “beating heart” of a business;
trade secrets can be an effective long-term
A new directive helpfully provides a legal
without them, the whole company would be
solution for critical IP assets that are ill-suited for
definition of the term “trade secret” and
undermined and everyone’s jobs would be
formal registration or as a short-term measure
outlines the civil remedies available in the case
at risk. During our trade secret workshops,
in advance of proposed patenting activities,
of misappropriation. The draft directive posits
members of staff suddenly realise that they’ve
helping to prevent inadvertent public disclosure.
that in order to fall under the definition of trade
been talking about their trade secrets in their
We chose to focus on trade secrets as one of the
secret: the information must be a secret; the
sales presentations or chatting about them with
IP asset classes in the IP League Table because
information has commercial value because it
clients in the pub. Businesses that utilise our
the strategic protection of commercially-sensitive
is managed as a secret; and the information
“virtual chief IP officer service” also learn more
information is something that sets a business
must have been subject to reasonable steps to
about how to protect and manage their trade
apart from its competitors and is a crucial part
keep it secret. The draft directive also provides
secrets through our on-demand IP support.
of any IP strategy. But why would a company
civil remedies for trade secret misappropriation
When we carry out investor or buyer due
choose to protect its IP through trade secrets rather than using patents? There are several advantages in avoiding the patent route: patenting your technology in all the areas in which you are trading can be costly and, for a small or pre-revenue company, can be a massive
“One of the best examples is WD-40, the popular water-displacement spray, the composition of which has been kept as a trade secret since its creation in 1953 Although its ingredients are known to the general public, no other company has been able to replicate it exactly”
expense; and the “claims” of your invention in the patent are placed into the public domain,
but, prevention is better than cure. Essential
diligence on the IP of a business, trade secrets
and often “putting a target on your back” for
steps to protect trade secrets should begin with
are often central to our analysis. They want to
lawsuits by patent trolls or others. While action
the creation of a trade secrets policy, through
know if trade secrets have been identified and
can be taken against infringers – however
which information that is held as a trade secret
protected and whether a company has taken
costly – keeping technology that could be
is listed in a trade secrets register and access to
steps to educate their staff on the need to stop
difficult to reverse-engineer out of the public’s
that information is limited to those who require
these pieces of crucial information leaking out
eye through maintaining it as a trade secret,
it, possibly by using encryption and password
of the business. This is particularly important
has its advantages. One of the best examples is
protection. With the majority of trade secret
where a corporate buyer is worried about key
WD-40, the popular water-displacement spray,
theft being committed by someone acquainted
staff leaving the business post acquisition.
the composition of which has been kept as a
with the company – non-disclosure agreements
The importance of knowledge is often
trade secret since its creation in 1953. Although
and confidentiality clauses are a good start in all
underestimated and, with the rise of IP lawsuits,
its ingredients are known to the general public,
employment contracts, contractor paperwork
it is critical that information underpinning
no other company has been able to replicate
and joint venture agreements. These documents
your competitive advantage is protected from
it exactly. In the same way, trade secrets are
should all explicitly mention the existence, but
those inside your company as well as those on
employed in food and drink companies because
not the detail, of the trade secrets to ensure
the outside. In 2014, it was estimated that,
recipes – although covered by copyright – can
maximum protection. By making a concerted
in the US alone, trade secret theft resulted in
easily be copied. The recipe to Scotland’s
effort to implement a trade secret policy, and
an annual loss of between US $160bn and US
“other” national drink – our beloved bright
impressing its importance on staff and making
$480bn. Don’t take the risk! n
orange Irn-Bru – is stored as a company trade
it part of the business culture, a company
Stephen Robertson is the founder
secret to which only three people have access.
will be much better placed to protect its
of Metis Partners. Find out more at
Not all confidential information can be protected
competitive advantage. One way in which we
www.metispartners.com
12
INTERVIEW bqlive.co.uk
How do you put a value on your IP and can you the use it to finance your business? Manufacturers, software firms and technology start-ups have all been finding out with help from Clydesdale Bank
Bringing innovation into banking INVESTING in innovation has been at the heart
at Clydesdale Bank. “I get to meet the most
“Graeme Sands, who heads up our specialist
of Clydesdale Bank’s mission since the lender
fascinating businesses and entrepreneurs, many
and acquisition finance division, identified that
was founded in 1838. Clydesdale’s founders
of whom have developed world-class products
businesses may have developed very significant
realised that a different approach to banking
or software and all of whom are extremely
value in their IP. That value may well have
was needed. They exercised caution while other
optimistic and driven.
attracted equity investment from venture capital
Glasgow banks crumbled around them. But
“We recognised there was a group of businesses
funds, high net worth individuals and business
they were also prepared to back innovators.
in the UK that struggled to borrow money even
angels, but the firms may have struggled to
The bank is still innovating today. Four years
though they had very valuable assets in the
raise debt.”
ago, Clydesdale introduced a dedicated growth
form of IP. Banks normally lend against tangible
“A lot of these businesses were relatively
finance team that lends to businesses based
assets, like property, but the intangible aspect of
embryonic in terms of their commercialisation,
on their intellectual property (IP). The team
IP has traditionally been very hard for banks to
so they were starting to commercialise what
typically provides between £1m and £7m, with
lend against.
they produce off the back of their IP, but were
the average deal size to date sitting at around £3.5m. Some of the larger businesses are already turning over £20m or £30m, but most have revenues below the £10m level. “I do feel like I have the best job in the bank,” smiles David Hayers, head of growth finance
“What growth finance was set up to do was to identify ways in which we could lend to these businesses that had developed their IP’”
INTERVIEW bqlive.co.uk
13
14
INTERVIEW bqlive.co.uk
Paul Shephard, director of business and private bank at Clydesdale Bank
not yet cash generating or profitable. So every time they needed to raise money they had to give equity away, which meant the management team continued to be diluted.” His comments will ring true with many
“We’re interested in individuals’ businesses and their propositions rather than lending against the underlying asset base as such.” Paul Shephard, director of business and private bank at Clydesdale Bank
entrepreneurs who have been faced with the dilemma of handing over shares in their
high-end – with world-renowned businesses
identify ways in which we could lend to these
company to an investor in return for the cash
like Facebook, Google and Twitter – but there is
businesses that had developed their IP. We
that they so desperately need.
also a significant part of the market at the very
developed a methodology – our own IP if you
“What was identified was the very fact that
small end that is not too dissimilar; they have
like – to identify the financial strength of the
these companies had raised professional equity
developed products or processes or software
business, the quality and depth of the equity
and had started commercialising their IP to drive
that is unique to them, which they have often
invested and the extent of the IP.
revenues meant there was real value in these
protected and which is driving revenues.
“From this, growth finance was developed,
businesses,” Hayers says. “We see it at the
“What growth finance was setup to do was to
enabling businesses to raise senior debt from
INTERVIEW bqlive.co.uk
15
us to then go and help drive their revenues by
a management buyout and on to a stock-market
helping them invest in staff and develop the
listing all within the same division and the same
next stage of their IP, such as the next iteration
credit team,” explains Hayers. “That’s really
of their software or the next version of their
powerful because, from a company’s point of
patented product. Paul Shephard, director
view, it is frustrating for a management team to
of business and private bank at Clydesdale
have to keep educating a new credit team about
Bank, explains: “The approach we take is not
its business, its market and its key drivers.
just to lend against any physical assets that
“Often it’s not a price-driven decision in this part
an individual business may have but instead
of the market – it’s all about being comfortable
to train our staff to understand the details of
with the organisation that you’re working
individual businesses, where their strengths lie,
with. We now have a four-year track record of
what are their management’s strengths, look
working with and supporting these scale-up
at the market in which they operate, look at
businesses. That experience is invaluable as it
the sustainability of their cashflow and revenue
enables us to take a considered view should the business hit bumps in the road.”
generation, and then look to support those businesses with funding for growth or working
Graeme Sands, UK Head of
Both the growth finance team and the ETU
capital or whatever they need irrespective of the
Specialist and Acquisition Finance
cover all of the UK, with hotspots of demand emerging in the Central Belt, along with
asset base of those businesses.”
Cambridge, London, the North-West of
Shephard adds that, even after a company has expanded beyond the need for growth finance,
want to sell their product in the United States
England, and the Thames Valley. The three most
the bank can continue to support it through
and sign a four-year deal to help them achieve
recent deals have come from Scotland, Cheshire
its broader range of products and services.
that, but then two or three years down the line
and Harrogate.
“Growth finance is a specialist area of our
they’ve established themselves in North America
“We’re seeing a lot of deals in the software
business focused on IP and all that brings, but it
and they want to expand into Asia too and
sector at the moment, but the majority of our
echoes the philosophy that we have throughout
they want more money to do that. Given the
deals come from sectors that would traditionally
Clydesdale Bank and Yorkshire Bank – we’re
flexibility we bring to our approach, we are able
be classed as manufacturing – businesses that
interested in individuals’ businesses and their
to continue to support the growth ambitions of
have developed a product or a process that they
propositions rather than lending against the
that company. That feels very rewarding.”
have patented,” says Hayers.
underlying asset base as such,” he adds.
Clydesdale has also just launched its Emerging
“We have IP as a requirement, so people often
Hayers points to the success of businesses like
Technology Unit (ETU), which will offer a version
confuse that with ‘technology’. If we do find
Touch Bionics, the Livingston-based medical
of growth finance for companies at an earlier
the next Google then so much the better, but
technology company that makes prosthetic
stage in the lives. The unit will lend up to £1m
the sectors that we’ve lent to are broad – so
fingers and hands. The firm was spun out from
to companies that are turning over at least
it could be the medical sector or software or
the National Health Service (NHS) in 2003 and
£500,000 a year and which have previously
semiconductors or the manufacturing of lasers.”
borrowed £2.5m from Clydesdale Bank in
managed to raise at least £500,000 from
Hayers says “It’s about getting the message
2010 to accelerate its growth. Touch Bionics
professional investors such as business angels,
out that you don’t have to give up your equity
has since grown to turn over £13.6m last year,
high net worth individuals or venture capitalists.
so readily – there are other options available,
Several of the companies backed by Clydesdale
If a business wants to raise more than £1m,
including coming to Clydesdale Bank and
Bank have gone on to provide successful exits
then this opportunity will be picked up by the
Yorkshire Bank for growth finance,” he says.
for their shareholders, including Stirling-based
existing growth finance team.
“The IP100 really linked in with what we’re
Cascade Technologies, to which the bank had
“Now that the ETU has been established, we’re
trying to achieve – it’s about us being on the
lent £1.75m. The University of Strathclyde spin
the only bank that can fund a business from just
front foot and differentiating ourselves in the
out, which uses lasers to detect and monitor
after start-up, through growth finance, through
market and this is a key way of doing that.” n
gases, was sold to New York-listed Emerson in December. [2014] “One of the interesting things about what we do is that at the start of a deal there’s a defined term for the debt but almost always the businesses will extend that debt term at some point,” says Hayers. “Perhaps originally they
“A lot of these businesses were relatively embryonic in terms of their commercialisation, so they were starting to commercialise what they produce off the back of their IP, but were not yet cash generating or profitable.”
16
IP100 INSIGHT bqlive.co.uk
Let us celebrate your IP Stephen Robertson, founder of the award winning commercial intellectual property firm Metis Partners, explains how and why the IP League Table has been created and why IP can offer significant advantages to both large and small businesses FOR most companies, Intellectual Property (“IP”) doesn’t make it onto the balance sheet and as a result is never properly managed as an asset of the business. Most companies see the creation of IP assets as just another cost of doing business. By creating the IP League Table, we wanted people to recognise that IP can be viewed differently: it can be protected and managed as an asset, and can provide a business with a significant competitive advantage, thereby increasing the value of the business overall. FanDuel and Skyscanner are IP-rich companies which have received recognition for the significant IP assets they’ve created and as a result have attracted tens of millions of pounds of investment. There are also a number of traditional manufacturing and engineering companies that have been integrating IP value into their business models, making profits and so monetising IP for years. We wanted to create a platform to give companies at every stage in the business lifecycle, across a range of sectors, the recognition they deserve. Managing your IP and recognising it as one of your business’ core assets is becoming increasingly important and lenders already recognise its significance in underpinning a robust and scalable business model. This allows IP-rich companies to expand their business by raising debt finance secured against their IP
“The IP League Table gives SMEs recognition for the IP they’ve created. This is a unique opportunity to benchmark your company as IP-savvy and demonstrate to the world how IP-rich your company is.”
assets, which otherwise may only be available to companies with tangible assets, such as plant
been so successful that they are launching a
usually ask about what IP has been
& machinery. Clydesdale and Yorkshire Banks,
new product, focused on IP-rich SMEs with
created, how it’s been managed, whether it’s
headline sponsors of the IP League Table, have
turnover less than £1.5m.
been well protected, how well it underpins the
been lending to IP-rich businesses for many
IP is also incredibly important when it comes to
competitive advantage of the business and
years and have often asked us to carry out IP
selling a business or bringing an equity partner
how much it’s worth.
due diligence on target companies. This has
on board. When carrying out due diligence, they
Through our methodology, the IP League Table
IP100 INSIGHT bqlive.co.uk
17
Five IP asset classes BRAND AND REPUTATION celebrates companies that have created IP and
higher barriers to entry and more robust and
We begin our proprietary ranking process by
developed effective IP management strategies.
scalable business models.
discussing brand and reputation. Examples
The ranking process we have developed for the
Being in the IP League Table also enhances
of some of the areas in our scorecard which
IP League Table relies on proprietary scorecards
reputational status amongst other industry
we touch on during the phone calls include
we have created for each of the five IP asset
players, thereby building brand value.
their trade mark filing strategy, whether
classes that are most commonly linked to
So, if you are looking to exit your business,
a company has a social media strategy to
revenue generation: (1) brand and reputation;
entering the IP League Table is a great way
enhance the brand, and whether there are
(2) patents; (3) software; (4) critical databases;
to demonstrate the importance of IP to the
processes in place to measure customer
and (5) trade secrets. Our methodology looks at
business, which should help gain recognition
loyalty and customer feedback.
IP asset management without companies having
amongst potential buyers and will certainly
to reveal critical details about each IP asset
differentiate you from your competitors, with
PATENTS
and therefore compromise their competitive
the newly recognised IP value resulting in a
If the entrants have patents, our scorecard
advantage. We do our own initial due diligence
higher exit valuation.
and questions cover patent landscaping
on each entrant, followed by an intensive
Companies are always looking for ways to
prior to filing, and the links between the
Q&A session focussed on the five IP asset
differentiate themselves, and demonstrating
patent claims, products / services, and
classes, the results of which are then input
a focus on IP is another way to do that. Big
revenue generation. We also assess if
into our scorecards.
companies have been doing this for a long
an invention disclosure process has been
Our discussions centre on what IP has been
time; in the United States, Apple, Facebook and
implemented, and whether the company is
created and whether there are processes and
Google constantly flex their muscles, talking
the sole named applicant on critical patents.
strategies in place to build IP value. Some
about the value of their brands, patents, or
companies don’t have patents and some
software and technology.
SOFTWARE
companies don’t have software, but that isn’t
The IP League Table gives SMEs recognition
As the conversation moves onto software,
an issue. Our scoring process accounts for these
for the IP they’ve created and this is a unique
our scorecard focuses on the company’s
differing entrant profiles in order to fully reflect
opportunity to benchmark your company as
software development strategy,
the diversity of business models. Therefore,
IP-savvy. Benefits to entering the IP League Table
processes, and methodologies, version
companies which have neither patents nor
are numerous: it will get your company noticed
controls, the integration of third-party
software are not disadvantaged in the process.
by potential acquirers/investors, help gain
code, and the link between software
Qualifying for the IP League Table is a huge
valuable new exposure for your brand as well as
and revenue generation.
achievement in itself, no matter where your
establishing your company as an innovator.
company appears within the rankings. For
“Quite simply, the IP League Table aims to assist
CRITICAL DATABASES
entrants, this is just the start of the process
SMEs across the UK to realise the true potential
When we talk about databases, we discuss
because, as we perform our regular updates
and value of their intellectual property.” Bryan
database management, the types of records
and reviews, improvements in relevant IP
Hoare, Managing Director BQ Magazine and
/ fields around which data is collected,
management processes will be updated in future
co founder of IP100
the link between databases and revenue
scorecards and so will be reflected in their future
generation, and what type of analytics are
IP League Table position.
Entries for the February deadline focused
carried out on the back of the database
If you are looking to raise money and have
on the rest of the UK are still open.
content.
entered the IP League Table, your company will
Stephen Robertson is the founder
now be recognised as an IP-rich business. It’s
of Metis Partners. Find out more at
TRADE SECRETS
widely known that such companies demonstrate
www.metispartners.com/ ip-league-table-2/
The final part of the IP League Table ranking process covers trade secrets and their management. Our scorecard includes
“Quite simply the IP100 aims to assist SME’s across the UK to realise the true potential and value of their Intellectual Property” Bryan Hoare, Managing Director BQ Magazine and co founder of IP100
questions on what trade secrets exist and we discuss trade secret policies, registers and the link between trade secrets and the revenues they underpin.
18
IP LEAGUE TABLE bqlive.co.uk
IP100 - THE RESULTS
Metis Partners and BQ have been delighted at the uptake of IP-rich companies into the IP League Table. We are pleased to present our findings from the first IP League Table project, along with some analysis broken down per industry sector Our IP League Table assessment covered five
Managing Director of Data Conversion Systems,
the rise of the overall % scores from the period
IP asset classes – Brand & Reputation, Patents,
says “IP is important to us because it sets us apart
1986-1999 to 2000-2009 could potentially show
Critical Databases, Software and Trade Secrets.
from the competition and makes us the company
an increase in awareness around intellectual
Our ranking process is focused on entrants’ IP
we are today.”
property during this time period.
management activities which drive IP value. Such
Metis Partners was able to gain interesting
It’s also worth noting that newer companies
management processes create a strong business
insights as to the performance by industry sector
scored lower than older companies, perhaps
model with sustainable barriers to entry which,
of the entrant companies. The spread between
suggesting that implementing effective IP
in turn, help create a scalable business, capable
the Business Services, Consumer Services and
management strategies is worthwhile but it may
of expansion both nationally and internationally.
B2B Software sectors was relatively even and
take a period of time for material results to be
There is a clear and direct link between improving
considerably higher than the O&G, Biotech/
harvested from these efforts.
the IP assets in a business and increasing the
Biochemical and B2C Software sectors, possibly
The IP League Table offers a real insight into how
overall business valuation. From these results,
due to the higher recognition of intellectual
IP assets are viewed and managed across a range
we found that the spread between the top
property assets within these sectors.
of companies and industries. Our proprietary
performing entrants was small, indicating that IP
A strong correlation was found between
ranking process against which all entrants have
strategy is an integral part of the business model
average IP score and year of incorporation.
been measured has proven to be a valuable
for each of these companies. B2B Software
From our results, it can be seen that companies
and constructive benchmark which determines
companies feature most prominently in the top
incorporated between 2000 and 2009 obtained
the effectiveness of IP management techniques
20, followed by entrants providing Business
the highest overall average scores. A conclusion
within a company, and a reliable indicator of the
Services, Manufacturing and Distribution.
that may be drawn from these results is the
likely IP wealth of that company.
Data Conversion Systems, a high-end digital
effect that the economic downturn has had
We are still accepting entries for our
audio company, came out as the leader,
on businesses throughout the UK, with new
February IP League Table supplement.
having performed consistently well across all
businesses not investing so heavily in intellectual
Should you wish to enter, please visit
of the relevant IP Asset classes. David J Steven,
property management processes. Additionally,
www.bqlive.co.uk/ip100
“Intellectual Property matters. Firms that own IP assets grow faster, innovate more and create more and better jobs than others. They are more productive and more likely to survive and grow, even when times are tough. These businesses are at the core of our long term economic well-being. The IP 100 celebrates the achievements of the best of them. I hope others will look to emulate their success through focussed innovation and excellent management and exploitation of the intellectual property assets they produce.” Rosa Wilkinson, director of innovation and strategic communications, IPO
IP LEAGUE TABLE bqlive.co.uk
IP
Top 20 entrants
19
Overall score (Scores out of 100)
1
Data Conversion Systems
63.5
2
LUX Assure
62.4
3
Speech Graphics
62.3
4
SwiftKey
59.8
5
CC Technology
58.0
6
Standard Life
57.8
7
WheelRight
57.6
8
Pacifica Group
57.2
9
Exmos
57.0
10
Connect-In
57.0
11
Anatom
56.2
12
Sphere Fluidics
56.0
13
Syrinix
55.0
14
2020 Business Insight
54.1
15
Bio ID Security
52.2
16
Sodash
52.1
17
Redu Group
51.4
18
Swipiicard
50.8
19
WeeWorld
50.8
20
BrightOffice
50.5
Other entrants in the top 50 Affective Logic
eeGeo
R & G Associates LLP
Altia Solutions
Emotional Sciences
Smith & Sinclair
Bad Idea Organization
Hard Hood Clothing
So To Company
C.I.C
Hermes Apps
Biogelx BrandFour
KEY
Industry %
Consumer services/ Consumer manufacturing/ Distribution & retail
27%
Soapurity
Oil and Gas
KB Group (UK)
Spedian
B2B Software
Koolmill Systems
Totseat
B2C Software
Breaking Free Online
Lexus International
TTS Pharma
Deep Tek Winch IP
Malinkey
Wearable Technologies
Dmist Research
Mevgen Technologies
WFS Technologies
Business Services/ Business manufacturing & distribution
8% 25% 14% 20%
Downhole Energy
Opinurate
Worldteachers
Biotech/Biochem
6%
10 10 0 0 0 0 0 0 10 1 1 0 0 0 0 0 0 1 1 1 0 0 0 0 0 0 1 0 0 1 10200 1I P L E A0G U1E0 T0A B1L0E 0 1 1 10 0 0 0 0 0 0 1 1 1 0 00 10 10 0 0 0 0 0 0 0The1following 1 1 0 0 0 0 0 0 1 1 1 tables highlight the results obtained from the assessment 0 0 0 10 10 1in0each of the five individual 0 0 0 0 of0entrants IP 0 asset classes. We created 1 1 1 0 0these were discussed during 0 proprietary scorecards 0 0 1 1 for each and the 0 0 0 0 0 0 1 1 1 0 0 0 0 0 0 1 1 1 Table assessment. The League average of each relevant scorecard/ 0 0 0 0 1 1 10 0IPquestion 0 0 0 set constituted1 the overall score for each entrant company 0 0 1 1 0 0 0 0 0 1 0 1 1 0 0 0 0 0 1 0 1 1 0 0 0 0 0 0 IP 1and Reputation 10 0 1 1 Brand Patents IP 0 0 0 0 1 1 0 0 0 0 0 1 1 0 1 0 0 0 0 0 1 1 0 1 0 0 0 1 0 0 0 1 0 1 0 0 1 0 0 0 1 0 1 0 0 1 0 0 0 1 0 1 0 1 00 10 0 1 0 0 0 0 0 0 1 1 1 0 0 0 0 0 0 1 1 0 0 0 0 1 1 10 0 1 0 0 0 10 10 0 1 0 0 0 0 0 0 1 1 1 0 0 0 0 1 1 0 0 10 0 00 10 1 0 0 0 0 0 1 0 1 1 0 0 0 0 1 0 1 0 0 0 1 0 10 0 10 1 0 0 0 1 1 0 1 0 0 0 0 0 1 1 0 1 0 0 0 0 1 1 0 0 0 0 10 0 0 1 1 1 0 0 0 0 0 1 1 0 1 0 0 0 0 0 1 1 0 1 0 0 0 0 0 1 1 0 1 0 0 0 0 1 0 0 1 1 0 0 0 0 1 0 0 1 1 0 0 0 0 1 0 0 1 1 0 0 0 0 1 10 10 0 0 0 0 0 0 1 1 1 0 0 0 0 0 0 1 1 0 0 0 0 1 1 10 0 1 0 10 10 10 0 0 0 0 0 0 0 1 1 1 0 0 0 0 0 0 1 1 1 0 0 0 0 10 10 0 0 0 0 0 0 1 1 1 0 0 0 10 10 10 0 0 0 0 0 0 1 1 1 0 0 0 0 0 1 1 1 0 0 0 0 0 0 1 1 1 0 0 0 0 0 0 1 1 1 0 0 0 0 0 0 1 1 1 0 0 0 0 1 10 1 0 0 0 0 0 0 1 1 1 0 0 0 0 1 1 0 0 0 10 0 0 1 0 1 0 0 0 0 0 1 0 1 1 0 0 0 0 0 0 1 1 0 0 0 0 1 1 10 0 1 0 0 0 0 0 1 1 0 1 0 0 0 0 0 1 1 0 10 0 1 0 10 0 0 10 0 bqlive.co.uk
KEY
Consumer services/ Consumer manufacturing/ Distribution & retail Oil and Gas
B2B Software
B2C Software
Business Services/ Business manufacturing & distribution Biotech/Biochem
Patents are often seen as the most well-known form of IP assets
and were found across a range of entrant companies, with each sector well represented in the results. The broad distribution of
scores amongst entrants in the patent IP asset class indicates that the management strategies in relation to patents across these
companies varies a great deal, perhaps according to the importance of the patent portfolio to the overall business strategy. Wearable
Technologies and Deep Tek Winch IP were joint leaders in the patent question set, having equally extensive IP management strategies. Deep Tek Winch IP has developed cost effective technology for
accessing deep and ultra deep water in its core business of cargo recovery. Wearable Technologies offers a range of technologies
aimed at cyclists, runners, equestrians and the emergency services. What’s clear is that patents are core to each of these business
models, allowing these companies to create barriers to entry and to defend their current market position.
1 Wearable Technologies 2 Deep Tek Winch IP 3 Dmist Research 4 Connect-In 5 Sphere Fluidics 6 SwiftKey 7 WFS Technologies 8 LUX Assure 9 WheelRight 10 Koolmill Systems 11 Smith & Sinclair 12 Sodash 13 eeGeo 14 Standard Life 15 Hard Hood Clothing 16 Biogelx 17 Downhole Energy 18 Spedian 19 WeeWorld 20 TTS Pharma
1 Standard Life 2 Data Conversion Systems 3 WeeWorld 4 Sphere Fluidics 5 2020 Business Insight 6 LUX Assure 7 Redu Group 8 Totseat 9 SwiftKey 10 Deep Tek Winch IP 11 Anatom 12 Connect-In 13 Sodash 14 CC Technology 15 Breaking Free Online 16 Swipiicard 17 Speech Graphics 18 Worldteachers Recruitment 19 Syrinix 20 Altia Solutions
Companies that scored highly against our brand & reputation
scorecard come from a wide range of industry sectors, indicating that brand & reputation is relevant to the majority of companies. The split between all six industry sectors appears to be more or
less even, despite the difference in the range of assessment scores received across the varying entrant companies. Standard Life
attained the highest score overall for brand & reputation. They displayed a comprehensive, well-developed system for brand
management which is designed to build and maintain the value of their IP. The Standard Life brand has won numerous industry
awards, has a strong presence within the UK press and is active
on social media. Additionally, Standard Life has been involved in a number of profile raising sponsorships, the most recent of which being the sponsorship of Andy Murray and the British basketball team during the 2012 Olympic Games.
0 0 0 1 1 1 0 0 0 0 0 0 1 1 0 0 1 0 0 0 1 1 1 0 0 0 0 0 0 1 1 1 0 I P L E A G U0E0T A1B0L0E 2 1 0 0 0 1 1 0 0 0 0 1 1 1 0 0 0 0 0 1 1 1 0 0 0 0 0 0 1 1 1 0 0 0 0 1 1 Software 0 0 10 0IP 0 0 0 1 1 0 1 0 0 0 0 0 1 1 0 1 0 0 10 0 10 0 10 0 10 0 10 10 0 10 0 10 0 0 0 1 0 0 1 0 0 0 1 0 1 0 0 0 0 1 1 0 0 10 0 00 10 1 0 0 0 0 0 1 0 1 1 0 0 10 10 0 0 0 0 1 0 10 0 10 1 0 0 0 0 0 1 0 1 1 0 0 0 0 0 1 0 1 0 0 00 1 1 10 0 1 0 0 0 0 1 1 0 0 0 0 0 1 0 1 1 0 0 0 0 1 10 0 0 0 1 0 10 0 10 1 0 0 0 0 1 1 0 1 0 0 0 0 0 1 1 10 Trade Secrets 0 0 0 0 0 1 IP 1 0 1 0 0 0 0 0 1 1 1 0 0 0 0 0 1 1 0 1 0 0 0 0 0 1 0 1 0 0 0 1 10 0 1 0 1 0 0 10 0 00 1 0 1 0 0 0 1 0 0 1 0 1 10 0 0 10 0 10 10 0 10 0 10 0 0 1 0 0 0 0 1 1 0 0 0 10 0 10 0 10 0 100 10 0 10 0 10 0 10 0 10 0 0 0 1 1 1 0 0 0 0 0 0 1 1 00 1 10 0 10 0 1 0 0 0 0 0 1 1 0 1 0 0 0 0 0 1 0 1 0 0 0 1 10 0 1 0 1 0 0 0 1 1 0 1 0 0 0 0 0 1 Critical databases 1 0 IP 1 0 0 0 0 0 1 1 0 1 0 0 0 0 0 1 1 1 0 0 0 0 0 0 1 1 1 0 0 0 0 0 0 1 1 1 0 0 0 0 1 1 0 0 0 10 0 10 10 0 0 0 0 0 0 1 1 1 0 0 0 0 0 0 1 1 0 0 0 0 1 10 0 1 1 0 0 0 0 0 1 1 0 1 0 0 0 0 0 1 1 0 1 0 0 0 1 0 1 0 0 10 0 0 10 0 0 1 0 1 0 0 0 1 0 0 1 0 1 0 0 1 0 10 0 10 10 0 10 0 10 0 0 1 0 0 0 0 1 1 0 0 0 0 0 0 1 1 1 0 0 0 0 0 0 1 1 1 0 0 0 0 0 1 1 1 0 0 0 0 0 0 1 1 1 10 0 10 0 10 0 bqlive.co.uk
As was expected in this IP asset class, B2B software and B2C software dominate the top 20. Of interest, however, is the prominence of entrant companies from the business services/business manufacturing & distribution sector. This sector features prominently in the top twenty, indicating that proprietary software is of great significance to companies offering business services. CC Technology, a business software developer, was the leader in this IP asset class. The team of developers within this Company has implemented robust software management techniques, resulting in a version 4 system that still has room to evolve and manage customer needs around the lifecycle of grant management.
1 CC Technology
11 Speech Graphics
2 BrandFour
12 Sodash
3 SwiftKey
13 eeGeo
4 Bio ID Security
14 Hermes Apps
5 Altia Solutions
15 WeeWorld
6 Redu Group
16 Pingo
7 Pacifica Group
17 Exmos
8 Syrinix
18 Bright Office
9 Standard Life
19 2020 Business Insight
10 WFS Technologies
20 Sphere Fluidics
In line with current trends, we can see the increasing
1 LUX Assure
11 Syrinix
importance of unregistered IP such as trade secrets,
2 WFS Technologies
12 Biogelx
3 Smith & Sinclair
13 Anatom
number of companies recognising the importance
4 Data Conversion Systems
14 Bad Idea Organisation CIC
of implementing effective trade secrets policies,
5 WheelRight
15 MALINKEY
6 Soapurity
16 Lexus International
this IP asset class – Lux Assure and WFS Technologies
7 Totseat
17 Pacifica Group
– displayed a keen awareness of the importance of
8 KB Group (UK)
18 Mevgen Technologies
9 Speech Graphics
19 2020 Business Insight
10 Altia Solutions
20 Swipiicard
especially in the oil & gas and consumer services
sectors. Metis Partners has seen an increase in the
indicating that this informal IP asset is gaining
traction across a number of sectors. The leaders in
trade secret protection and management in their business model, having created a healthy trade secrets culture within their business.
The spread of the entrant scores for the critical
1 Worldteachers Recruitment
11 WheelRight
2 Exmos
12 Biogelx
data collection and management techniques as a key
3 LUX Assure
13 Hermes Apps
process in their business. Each industry sector performed
4 Redu Group
14 Pacifica Group
5
15 Anatom
databases asset class is exceptionally small, indicating that entrant companies recognise the importance of
well, indicating that critical databases are essential IP assets across the board, whether they are technical
TTS Pharma
databases for manufacturing companies, customer
6 BrightOffice
16 Standard Life
databases or software related datasets. Worldteachers
7 Downhole Energy
17 Connect-In
8 Speech Graphics
18 Affective Logic
firm), and Lux Assure (delivering novel, unique corrosion
9 Mevgen Technologies
19 Syrinix
monitoring technologies within the global O&G sector)
10 CC Technologies
20 eeGeo
Recruitment (a recruitment agency operating in
international education), Exmos (software development
came top in the critical databases IP asset class.
22
INTERVIEW bqlive.co.uk
INTERVIEW bqlive.co.uk
23
Getting social with your customers The worlds of mathematics and artificial intelligence are allowing SoDash to help companies join in conversations with their customers on social media Daniel Winterstein has an interesting
and Selfridges through to transport companies
Winterstein – along with Joe Halliwell – also
combination of skills – he gained a first-class
like Caledonian MacBrayne ferries, Go-Ahead
founded Winterwell Associates, which is
degree in mathematics at the University of
Group and Virgin Trains. Everest windows,
SoDash’s parent company. Members of the
Cambridge and then carried out research into
the Scottish Qualifications Authority and the
firm’s team have consulted for clients including
artificial intelligence to receive his doctorate
University of Sunderland are also putting the
the BBC, the Ministry of Defence, Motorola,
from the University of Edinburgh. Mention the
company’s product to good use.
Tesco, and the Treasury, as well as acting as an
words “artificial intelligence” and people will
“SoDash was created by what the market
approved data analyst for the Home Office.
immediately begin thinking of director Stephen
wanted,” explains Winterstein. “It all started
One of the early supporters of the SoDash was
Spielberg’s 2001 film AI or actor Will Smith’s
when I created an open-source Java client for
Simon Campbell, founder and chief executive
2004 blockbuster I, Robot.
working with Twitter. That got quite a bit of
of The Sandpit, which describes itself not as an
But Winterstein isn’t experimenting in the
interest and use and that led to people coming
“incubator or accelerator” but as a “business
realms of science fiction. Instead, he’s using
to us looking to do work around Twitter and
builder”, which helps start-up technology
artificial intelligence to help solve real-world
work that combined Twitter with data analysis
companies to grow their sales and marketing.
problems – including how brands interact with
and automation.
Campbell invested cash in SoDash, which has
their customers on social media. Winterstein
“That led to a couple of projects around what
now grown to employ 12 staff and now turns
launched social media platform SoDash in 2011.
would become SoDash, based around the ideas
over around £300,000 a year. As well as its head
Its software scours social media websites – such
of ‘Let’s collect the messages and build efficient
office in Edinburgh, the company also has staff
as Facebook, LinkedIn and Twitter – and collects
workflows on them’. There were also some
working at San Jose in Costa Rica, serving the
together messages that a company wants to
ideas floating in there of earlier work I had done
Central and Latin American markets.
read, such as customers talking to it or about it,
with the BBC on cross-channel storytelling and
“Simon and The Sandpit work with technology
or talking about its rivals or its wider sector.
communication.
companies like SoDash and help them on the
That data is then analysed, using a mix of
“We ended up building the forerunner of
sales side. So you come to The Sandpit with the
parameters that the customer sets itself and
SoDash for one client and then reusing some of
technology side of how you’re building your
an artificial intelligence that learns from the
it for a second client. At that point we realised
business sorted but you have to build a sales
user. Based on the analysis, the software then
that the market is trying to tell us that there’s a
team. So they’ll help companies to get that sales
produces a list of tasks that the company
need here. That’s when we started working on
team together and functioning.
should carry out, such as replying to messages
SoDash as a product.”
“I was introduced to Simon and he was very
on Facebook or Twitter, passing a complaint on to the customer services department or sending a comment about the company’s latest advertisement on to the marketing department for its monthly report. SoDash already has a host of big names using its services, from department stores such as Harrods
“That there are lots of companies out there that understand what they’re doing but don’t have the sales experience to get it in front of people’”
24
INTERVIEW bqlive.co.uk
much taken with SoDash, which led to The
“We recently did a project with the University
Sandpit both investing some money in its early
of Edinburgh looking at how people had been
development and providing its early-stage sales
talking about feminism on Twitter over the years
using that outsourced incubated sales model.
and how that had evolved and changed. We
Simon spotted that there are lots of companies
were able to do that by going and using the
out there that understand what they’re doing
data that SoDash has collected and archived.
but don’t have the sales experience to get it in
“The commercial applications for this service
front of people. “Mainstream social networks
could be that you can look at how your brand
such as Facebook, LinkedIn and Twitter are
has been talked about over time. Of course,
competing with more specialised services like
in an ideal world, a company will have been
Flickr, Google Plus, Pinterest and YouTube. Up to
tracking its social media from the first instance,
60% of customers change the channel that they
but a lot of businesses haven’t been doing that.
use to contact a company depending on what
So they can come to us and say ‘I’m launching
they’re doing, adding to the wave after wave
a new advertising campaign this year and of
of interactions. SoDash’s research has found
course I’m going to be monitoring it but I’d like
that fewer that one quarter of the mentions
to learn from last year’s campaign, which I don’t
of a brand, product or service online are linked
really have the data on’. Then we can tell them
to support inquiries and so companies have to
that we have controlled statistical samplings of
work hard to filter out all of the surrounding
Twitter and so we can give them the answers
noise from customers who are in need of help.
that they need.”
If customers are getting in contact with a
Big companies are already reaping the benefits
company through social media then just under
of the software, but smaller businesses will soon
half of them expect to receive a response within
be able to join in the party too, thanks to a
the next 60 minutes, meaning that time is of
version launched at the end of October.
the essence. Like many software businesses,
“So we’re taking all the things you can do with
intellectual property (IP) is at the heart of
SoDash and we’re creating a set of simpler ones.
SoDash and its business model, with customers
You can start your social media journey without
paying a subscription to use its services.
spending too much time or having too much
So far, the company has processed nearly 200
knowledge and there will be a SoDash for that.
million conversations that have taken place on
Then, as your company grows and your use of
social media.
social media grows, the relevant bits of SoDash
“As a software company, what do we provide to
will unlock and become available for you.”
people? It’s IP – it’s the software that we make.
Winterstein was attracted to enter the IP100 as
In terms of where the company is going, we’re
a vehicle for recognising the value being created
building up a user base but that’s on the back of
in technology companies. “Being able to make
having a strong technology, which is about our
that visible as a business asset allowing it then to
IP. There’s also data that we’re collecting, which
be used in fundraising activities or promotional
is of increasing value in its own right. The data
work really appeals to us. If you were to
we collect is all about things that people are
compare us against, say, one of our American
doing on social media, through their profiles and
competitors then in terms of the size of
activities. A lot of what we collect is data that’s
investments they have received they will have
in the public domain and so it’s there for anyone
more zeros on the end and they will have bigger
to collect. But the value is in having created
offices and so on. But over here we have some
an organised large archive of this data, which
very exciting IP and having places where that’s
is then curated by the SoDash system and the
recognised and celebrated will help raise the
SoDash users to organise it, tag it, market it up
profile of the company and in being able
and augment it.
to grow.” n
“We have some very exciting IP and having places where that’s recognised and celebrated will help raise the profile of the company and in being able to grow.”
INTERVIEW bqlive.co.uk
25
26
OVERVIEW bqlive.co.uk
SCOTLAND has a rich heritage when it comes to inventors and innovation. From John Logie Baird and the television to Alexander Graham Bell and the telephone, Scots can be rightly proud of their history in creating intellectual property (IP). The story doesn’t end in the 19th or early 20th centuries though. Ian Donald was hailed for adapting ultrasound for use in medicine, while James Goodfellow invented the technology behind the automated telling machine (ATM) and the personal identification number (PIN). And the theme continues today, with Scotland’s universities not only encouraging their staff and students to develop their own inventions – whether it’s through start-up or spin-out companies – but also partnering with existing businesses to transfer knowledge from the nation’s ivory towers out onto the high street.
Out of the Ivory Tower When it comes to science and technology, universities in Scotland have been making strides for hundreds of years and now a host of services are helping new and existing businesses to work with academics to develop intellectual property
OVERVIEW bqlive.co.uk
It’s not surprising that Scotland has form in this area. The nation had five ancient universities – St Andrews, Glasgow, Edinburgh and two in Aberdeen – for hundreds of years, while at the same time England could only boast Cambridge
27
‘Edinburgh is now emerging as the largest technology hub outside London, and at the heart of that phenomenon is the university and its enterprise scene.’ Grant Wheeler, head of company formation at ERI
and Oxford. Having such a lengthy record of higher education is still paying dividends today, with Scottish universities dominating on a UK-level when it comes to launching spin-out companies. According to the Praxis Unico Spinout report,
learning has been the University of Edinburgh.
organisation’s success has been attributed to
Scotland’s higher education institutions
During the 2014-15 academic year, the
Edinburgh Research & Innovation (ERI), the
produced 26% of all British spin-out companies
university produced a record 44 spin-out and
body’s commercialisation arm.
in 2013. Over the past decade, the nation has
start-up companies.
Over the past five years, Edinburgh has
accounted for 20% of all the UK’s spin-outs
Investment in companies that were born at
supported the creation of 184 companies,
and together these companies turn over more
the university also hit a record high during
which together employ a total of 343 people.
than £300m.
2014-15, with a total backing of £237m
Independent research by Biggar Economics
Leading the charge among Scotland’s seats of
invested in the past year. Much of the
found that these businesses contribute
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OVERVIEW bqlive.co.uk
more than £140m to the Scottish economy and have helped to create a further 2,300. Since Reynolds Medical – the university’s first recorded spin-out – was launched 40 years ago, more than 400 start-up and spin-out companies have been created at the university. One of the latest businesses to spread its wings is Krotos, which was set up by sound design graduate Orfeas Boteas. Krotos has developed Dehumaniser – a piece of software used to make sound effects for films, television programmes and video games – which was recently used to create the voice of Ultron in Avengers: Age of Ultron. When the latest figures were released, Grant Wheeler, head of company formation at ERI, pointed out: “Edinburgh is now emerging as the largest technology hub outside London, and at the heart of that phenomenon is the university and its enterprise scene. One of the University of Edinburgh’s most famous spin-out companies was Wolfson Microelectronics, which was launched in 1984 and floated on the London Stock Exchange in 2003. The business – which supplied audio chips to customers including LG, Samsung and Sony – was bought last year [2014] by rival Cirrus Logic for £278m. Cirrus highlighted Wolfson’s IP as one of the factors that attracted it to the takeover deal. IP is also one of the hot topics at Enterprise Campus, a joint initiative run by Aberdeen, Edinburgh and Strathclyde universities and backed by the Scottish Funding Council (SFC). The new body has three hubs where postgraduate students can go for oneto-one advice, workshops and bootcamps if they have an idea that they want to turn into a business. Budding entrepreneurs can also receive words of wisdom about funding opportunities, how to write a business plan, and how to go about commercialising their ideas. “One of the most frequent things we get asked by students accessing help from Enterprise Campus is ‘Who owns the IP in relation to my idea?’” explains enterprise executive Natasha Lobley. “And it’s one of those topics that seems to almost scare most people. “For students starting a business while in higher education, it’s very much down to their university’s standpoint on who owns what in
“Investing in entrepreneurial education will mean that Scotland will be fostering the next generation of entrepreneurs .“ Deputy First Minister John Swinney
OVERVIEW bqlive.co.uk
29
Scotland will be fostering the next generation Alexander Graham Bell
of entrepreneurs and help the higher education sector fulfil its vision for Scotland to be a worldleading entrepreneurial and innovative nation.” It’s not just students and academic staff who are getting in on the act though; existing businesses can also tap into the expertise inside Scotland’s universities, colleges and research institutes to help them create products and services or to improve their existing wares. Interface acts as a “dating agency” to match companies up with the most appropriate academics. Since it was launched in 2005, the organisation has introduced more than 2,000 businesses to academic partners, with nearly 1,200 collaborative projects being launched and 70% of clients reporting that they will or already have increased their turnover as a result of working with Interface. “Our role is to ensure that business and academic partnerships are as simple and transparent as possible,” says Interface director Siobhán Jordan. “Some of these partnerships may result in the co-creation of IP and intangible assets and we strongly encourage both the companies and universities to have an agreed strategy in place from the outset to maximise value from these. Although the Interface team doesn’t specifically advise businesses on
terms of the IP. Across Scotland’s university
own businesses, received a record number of
intellectual assets we can easily connect them to
network, there is a disparity in how IP ownership
entries, hitting 186 from 111 in 2014. The 68%
specialist advisors.
is viewed, so it’s important that students find
rise meant that more than 450 applications
“We have recently worked with Universities
out the situation at their place of study as soon
have now been made to the competition since
Scotland to create standard legal templates
as possible and are aware of the implications.
it started.
that are a condition of being granted an SFC
“We don’t lay claim to any IP from students
“This year has been quite exceptional,”
innovation voucher. This means that before
accessing help from Enterprise Campus, but we
admits Olga Kozlova, director of the Converge
any application for an innovation voucher is
can help them understand their IP and how they
Challenge. “The diversity of applications from
submitted, the company and the university,
can protect it – and with a former United States
a wide geographical spread across Scotland
research institution or college must agree on
Patent Office contractor on our team, we’re in a
universities and research institutes has shown
the ownership of intellectual assets and IP –
great position to explain most situations.”
our campuses remain full of inspirational
both existing IP and what will be produced as
The same entrepreneurial spirit exhibited by the
innovators wanting to adopt Converge
a result of the project, as well as confidentiality
students working with Enterprise Campus was
Challenge’s array of bespoke learning and
and data sharing.
also on show at the University of Strathclyde
business mentoring support programmes that
“If the IP arrangements are clear from the
in Glasgow in September, when the institution
forearm these budding entrepreneurs with the
outset, all partners are in a stronger position to
hosted the 2015 Converge Challenge. The
appropriate skill-sets to get their business idea
work together knowing that their creations, new
competition began at Heriot-Watt University in
off the ground.”
products, services or processes are protected.
Edinburgh in 2010 but has grown to encompass
Deputy First Minister John Swinney, who
Ultimately it is about increasing turnover and, in
all of Scotland’s universities.
delivered one of the speeches at the Converge
the UK, SMEs using IP rights report as much as
The challenge, which rewards staff and
Challenge dinner in Glasgow, adds: “Investing
20% higher growth, income and employment
students who have come up with ideas for their
in entrepreneurial education will mean that
than those that don’t.” n
30
INTERVIEW bqlive.co.uk
Putting IP in the driving seat Protecting her own intellectual property behind the Totseat chair harness has led Rachel Jones into helping other entrepreneurs who find themselves faced with threats from copycats IT’S a situation that’s familiar to millions of
initial contract manufacturers in Rochdale and
businesses who come to us for guidance and
parents – you arrive at a restaurant to meet your
Newcastle to a reputable factory in Shanghai
mentoring.
friends, all the highchairs have gone or are filthy
when export demand started to climb steeply.
“Meeting the first counterfeit Totseat was a
and you’re faced with the dilemma of what to
Jones signed up Boots as another big customer
moment neither I, nor the importer, will ever
do with your baby. Do you sit them on your
and now has several brand extensions, including
forget. I was incandescent with rage, albeit not
knee for the entire time? Do you leave them in
a licensing deal to sell Paddington Bear-branded
particularly surprised – which is more than I can
their pushchair and then just put up with the
Totseats, a super light-weight travel version of
say for the ‘poor woman’ who imported them –
glares from the waiter every time he stubs his
the seat, and the Oobicoo range of fabric dolls.
she didn’t know what had hit her.
toe as he passes by? Rachel Jones took matters
Yet with any successful product, there’s always
The plan was, and remains ‘We do not
into her own hands. She invented the Totseat, a
someone just waiting to get in on the act.
condone infringing products’ – identify, destroy,
fabric baby seat that attaches to an adult chair
“While you might think that imitation is the
prosecute.
and safely holds children aged between eight
highest form of flattery, it blooming well isn’t,”
‘We have worked really hard to identify
and thirty months. The original seat she made
says Jones, who co-founded the marketing
counterfeits and remove them from sale. The
by chopping up her wedding dress was such
and public relations agency Great Circle before
best form of defence, we find, is actually
a big hit with fellow mums at her baby group.
concentrating on the Totseat. “I’ve always been
our many trademarks. This is mostly because
When challenged to present to buyers from
really passionate about IP – even before the
when you’re battling people who are making,
department store chain John Lewis in 2005, she
Totseat – but now it’s absolutely part of the way
exporting or importing infringing products it’s
was astonished when they loved the idea too.
I look at every day, and also in terms of the many
the customs agencies that are potentially the
Totseat has since grown into a fully-fledged business, turning over £500,000 a year and exporting its products to 45 countries, with overseas sales accounting for 80% of its revenues. Production quickly switched from the
“The plan was, and remains ‘We do not condone infringing products’ – identify, destroy, prosecute“
INTERVIEW bqlive.co.uk
31
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INTERVIEW bqlive.co.uk
first port of call - and they pay great attention to
“If you’re manufacturing offshore – whether
don’t normally have the language skills to do
trademarks.
it’s in China or anywhere else – you absolutely
something about it in-house.”
“Europe benefits from an absolutely fantastic
need to consider your IP,” Jones advises. “We
Exports have also been a key theme for the
border control system called Citex, which I
may be small but we’re absolutely gung-ho
Totseat right from its very earliest days, with
cannot recommend highly enough to anyone
about our IP. I ask lots of questions of mentee
Germany quickly establishing itself as a key
who is importing or exporting. You can register
businesses about their IP because I’ve been
market, where it trades under its “Mobiseat”
your product, brand and trademark, and note
through it in a number of places. Sometimes
brand. Markets have come and gone over the
any key differences between genuine and
when you’re looking to register a trademark in
years and the business hasn’t been immune to
counterfeit products, pictorially and in words.
new territories, being able to prove its use in
the global finance crisis and ensuing recessions.
The Citex system then alerts all European Union
the territory, and earlier registrations elsewhere,
“Various countries have been through various
member states and the relevant border agencies
can really help the case. We’ve had to do this
hiccups, including Spain and Greece, which used
so they know to keep an eye out for your brand.
ourselves two or three times, and it’s a useful
to be big markets for us before the Eurozone
It’s a fabulous service. And entirely free.”
exercise in understanding the value of IP, its
crisis,” Jones says. “People may wake up and
When the first and only counterfeit Totseats
potential and what it brings to the business. No
listen to the news about the global economy
arrived at Southampton in 2012, the UK Border
IP, no business.
each morning but, until it actually hits them,
Agency picked up on them simply because they
“If you have solid IP and you’re working with a
they don’t really think about it. When you have
were listed on the Citex system. “It was the most
distributor in a certain country then it gives that
a product that you’re exporting all around the
extraordinary experience,” Jones remembers. “They phoned us up and told us that they had found these counterfeit items. When they arrived with us for inspection and verification, the packaging made me go weak at the knees because it was so true to ours, but the quality of the product was horrific. But, when sold
“It’s a useful exercise in understanding the value of IP, its potential and what it brings to the business. No IP, no business.”
online, it’s almost impossible to tell sometimes – particularly when the counterfeiters use genuine and ripped off images.
distributor confidence that you are interested
world then you’re really fiercely affected by all
“It all comes back to registering your
enough in your product to defend it. Distributors
sorts of things going on in all sorts of countries.
trademarks. “And so began our great foray for
and partners like to know that you’re passionate
But we’ve lived to tell the tale.”
always paying great attention to our IP. In every
about IP and that you will stand beside them if
One of the motivating factors for setting up
country that we work in, we try to register our
something comes up.”
the business was to encourage family freedom,
IP. That’s not always possible – sometimes it
Licensing other people’s IP has also been an
allowing parents to travel with the minimum
takes a long time and sometimes it’s just never
interesting part of the journey for Jones, who
of luggage.
going to happen, but we always try to do it to
makes Totseats with images of Paddington Bear
“When you’re stuck at home with a little one
protect ourselves in that territory. But there’s a
on them. Jones’s experiences with IP have struck
the energy and luggage quotient required to
limit to what you can do when you’re a small
such a chord with her that in March [2015] she
simply leave the house can be hideous,” says
business and sometimes these things are just
spun-out a new company called SnapDragon
Jones. “That’s what the Totseat is all about –
too expensive. In China, it’s quite common for
Monitoring, which combs e-commerce platforms
giving someone the confidence to leave the
people to come along and try to register your
for products that infringe small companies’ IP
house with a highchair alternative in their
brand name for themselves, which is incredibly
rights and has them taken down. The team
pocket, or for grandparents to keep a spare one
frustrating.”
includes data analysts and linguists. When
in a drawer for small visitors. The Totseat simply
One of Jones’s friends, who moved their
legal action is required on behalf of its clients,
makes mealtimes easier, absolutely anywhere,
manufacturing from the UK to China, didn’t
SnapDragon calls on a global network of IP
whether just round the corner, or around the
think to register the relevant trademarks locally,
attorneys and lawyers.
world. “The feedback we get from people is
leaving room for registration by a Chinese
“Slightly astonishingly, it all started from
terrific. We still get emails at four o’clock in
manufacturer instead. When the moment
experiences we had in defending our brand
the morning from people on the other side of
came to export the goods, they were impounded
across the globe,” says Jones. “SnapDragon
the world sending us pictures of their son in
– while the counterfeits were free to leave, being
currently supports and defends brands in
his Totseat. It makes it all worthwhile. What I
in possession of the relevant trademark. The
Chinese, French, Russian, Spanish, Polish and
appreciate less is the emails from people asking
genuine goods remain in China to this day.
Turkish. People who want to defend their IP
for the pattern.” n
INTERVIEW bqlive.co.uk
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34
PROFILE Murgitroyd
What a revealing call told Alice Europe and the US are closer now in their views on whether a computer implemented invention - software - is patentable, as a phone call from Alice confirmed. Sam Towlson, director – patents, explains I often hear the phrases “Software isn’t patentable”
conventional or non-trivial manner then it was found
and “You can get a patent on anything in the US”.
to be patentable. While at first glance this may seem
Neither is true. Nowadays, both the US Patent and
dissimilar to the EPO, consider the situation where
Trademark Office (USPTO) and the European Patent
a technical means, such as an electronic door catch,
Office (EPO) apply broadly similar tests to determine
works due to an electronic signal triggered by a
whether a computer implemented invention –
computer program. If the implementation of that
software – is patentable. This hasn’t always been
computer program is inventive then the computer
the case, with the US having a generous view on
program is patentable.
the patentability of software from the late 1990s
Consequently the USPTO and EPO have moved closer
onwards. In the EPO, by comparison, the case law
together on software over recent years. So when
developed relatively slowly, hinging on the ideas of
considering patent protection for an invention,
technical effect and technical contribution.
reliant on software, not just the function of the
According to the EPO, to avoid being excluded from
software but the technical means with which that
patentability, a computer program must be capable
function is implemented needs to be claimed. Bear
of bringing about a further technical effect going
in mind though that the relatively high bar of patent
beyond the normal physical interactions between
eligibility and obviousness in the USPTO is now
the computer program and the computer on which
almost stricter than the technical effect criterion of
it is run. Consider software controlling a physical or
the EPO.
data driven process, or requiring a technical element
Maybe it was a good thing that Alice made that call.
to function: this is a technical effect. In determining inventive step, the same feature must provide the solution to a problem. I use the example of a door swipe card when I’m explaining this: swipe the card through a card reader, read data from the card and send to a server for checking. If you are identified successfully the door is opened. Whether or not these processes are inventive is a different question. In the UK this idea has been taken further in what are commonly called the AT&T1 signposts; five
“So when considering patent protection for an invention, reliant on software, not just the function of the software but the technical means with which that function is implemented needs to be claimed”
features collated from case law that indicate whether
Dr Sam Towlson is a Director with Murgitroyd and a qualified UK and European Patent Attorney. She specialises in hi-tech inventions, in particular relating to software, physics, electro-mechanical engineering and materials. For further information, please visit: murgitroyd.com/people/sam-towlson Murgitroyd is a global firm of patent and trade mark attorneys with 15 offices spread across Europe and the US, and over 230 staff. Murgitroyd has Scottish offices
a computer program may be patentable. This follows
in Aberdeen, Edinburgh and Glasgow and works across
on from the idea of technical effect, giving the UK
did it transform an article from one state to another?
all industrial sectors. For further information, please
some of the most well-developed case law.
This is similar to the EPO idea of a technical effect
visit: murgitroyd.com
In the US, however, things changed following the
in the control of a physical process, such as the
Alice2 decision. One issue was the feeling that
transition between an open and closed door in the
almost anything was patentable as long as it was
example above.
computer implemented. In an effort to avoid this,
Alternatively, courts also considered whether there
judges employed tests derived from the so-called
were elements of the computer program in the prior
“Patent Eligibility Trinity”; three cases that summed
art, and if so, the computer program was patent
Please contact your local Murgitroyd office to arrange a
up how a computer program could be patentable.
eligible. The question remaining was whether the
free initial consultation:
The basic assessment was whether the computer
current implementation was obvious or not. If a
Aberdeen: 01224 706616 Edinburgh: 0131 339 9910
program met the “machine or transformation test”:
computer program was implemented in a non-
Glasgow: 0141 307 8400
INNOVATION SPOKEN HERE Murgitroyd is one of Europe’s largest IP firms, with more than 40 years experience. We’re experts at identifying, managing and creating value from IP. With over 230 IP professionals working across our 13 European and two US offices, we’re able to represent you across the globe. Why not contact one of our local experts in Aberdeen, Edinburgh or Glasgow to find out how we can help you.
Come and find out how we can create value for your business.
murgitroyd.com
Aberdeen 01224 706616
Edinburgh 0131 339 9910
Glasgow 0141 307 8400
36
INTERVIEW bqlive.co.uk
Making a noise in the library The British Library isn’t just home to books and journals, but also the Business & Intellectual Property Centre, which helps entrepreneurs to carry out research and launch their companies
INTERVIEW bqlive.co.uk
37
WITH its 400 miles of shelves and more than
IP information. Aberdeen Central Library also
150 million books and other items, the British
covers IP rights such as copyright, design,
Library is one of the biggest repositories of
patents and trademarks. The centre has a
knowledge in the world. Each year, a further
network of ambassadors who promote it at a
three million items are added to the library’s
national and local level. One of the ambassadors
vaults. Just like the National Library of Scotland
is Tim Campbell, who rose to fame after
in Edinburgh, the British Library receives a copy
winning the first series of The Apprentice back
of each and every book, magazine and other
in 2005. Campbell became the first project
publication produced in the UK and Ireland each
director within the health and beauty division of
year, while its sound archive boasts everything
Lord Sugar’s Amstrad company, before setting
from 19th Century wax cylinders through to
up the Bright Ideas Trust, a social enterprise that
compact discs. The British Library at St Pancras
encourages young entrepreneurs from deprived
not only houses billions of pages of words, but is also home to one of the most useful tools that a budding entrepreneur could ever hope to find – the Business & Intellectual Property Centre. The centre was opened in March 2006 to help entrepreneurs and inventors from a wide range of industries to grow their businesses by offering advice, resources and support. Since it was
“We’re looking to grow the network to 20 centres by the end of the decade and part of that is looking to work with libraries in Scotland, Wales and Northern Ireland.”
backgrounds to launch their own businesses. “I used the centre to find the information I needed to develop a business plan for the Bright Ideas Trust,” explains Campbell. “The centre has an extensive list of all the charities in the UK, in terms of their incomes, their outgoings and in terms of what they stand for and more specifically I wanted to know more about the knowledge economy. My own business is
launched, more than 400,000 people have used its collection of databases and publications for
information and expertise on how to protect
focused around supporting businesses within
free of charge, as well as taking part in advice
their innovations and inventions, while also
the knowledge economy.”
sessions, workshops and other events.
gaining access to free and low-cost advice and
Other ambassadors for the centre include: Lord
Using the centre has helped entrepreneurs to
support for starting, growing or running their
Bilimoria, the founder of Cobra beer; Shazia
carry out the essential market research that they
businesses. Pilot centres are also now being
Awan, co-founder of PP Couture; and Emma
need to give them the edge when setting up
developed in Exeter and Northampton.
Jones, founder of Enterprise Nation and co-
their company or the knowledge and insight
And the network could be spreading its wings
founder of StartUp Britain. The newest recruit
that they require to grow their business or
into Scotland too. The British Library’s centre is a
to the team is Paul Lindley, who launched
enter further markets. Business news, company
member of PATLIB UK, a Europe-wide network
baby food brand Ella’s Kitchen in 2006.
data, market research and information about
of patent information centres that also includes
Lindley launched his latest business, toiletries
copyright, patents, trademarks and other
Aberdeen Central Library and the Mitchell
brand Paddy’s Bathroom, earlier this year “I’m
intellectual property (IP) have all been placed at
Library in Glasgow.
honoured to become an ambassador for such
the user’s fingertips.
“We’re looking to grow the network to 20
a game-changing organisation,” says Lindley,
Not content with just serving London and those
centres by the end of the decade and part of
who was also one of the speakers at the Made
entrepreneurs prepared to travel to St Pancras,
that is looking to work with libraries in Scotland,
Festival for entrepreneurs in Sheffield in October.
the British Library wants to expand throughout
Wales and Northern Ireland,” explains Isabel
“The British Library’s centre has the credibility,
the UK, opening a network of 20 centres by
Oswell, head of business audiences at the British
assets and potential to improve fundamentally
2020. Its vision was given a boost in February
Library. “We want to work with other libraries
the likelihood of success for any British
2013 when Eric Pickles, then communities and
that share the same model or core service
entrepreneur. It’s open, accessible and of such
local government secretary, threw his weight
around IP support and business information that
quality to aspiring entrepreneurs that I’ll be
behind the Enterprising Libraries initiative with
the centre supplies. We’re at the early stages
humbled if acting as an ambassador can help
Arts Council England.
of talking to Glasgow about its future plans
spread awareness and its use.”
Pickles’ support allowed the British Library to
for its library services, part of which includes
Before taking up his role as an ambassador,
setup its national network in collaboration
developing its support for businesses and the IP
Lindley had addressed the owners of more than
with the Intellectual Property Office (IPO) and
element there.”
350 small businesses during one of the centre’s
six city libraries in England – Birmingham,
Glasgow Libraries already runs Business at
Inspiring Entrepreneurs events. He told delegates
Leeds, Liverpool, Manchester, Newcastle and
The Mitchell, a range of services that include
how he had used the centre while carrying out
Sheffield. The result is six locations throughout
access to business news, company accounts,
the research that led to him launching Ella’s
England that entrepreneurs can visit to access
funding opportunities, market research, and
Kitchen. n
38
IP CLUB CHAMPION bqlive.co.uk
Angels in the capital Business angels invest £1.6bn a year in start-up and early-stage companies and investment groups like Angel Capital love to find businesses with strong intellectual property that can be commercialised Anthony Clarke knows a good deal when he sees one. After cutting his teeth as a chartered accountant, Clarke served as finance director and chief executive for a string of SMEs before becoming a business angel in 1995. Over the past two decades, he’s invested or advised more than 30 start-ups and early stage businesses – and intellectual property (IP) is high up on his wish-list when he’s running the rule over a potential investment. “IP is very important, particularly when you’re
into both. I think the IP100 league table is
looking at medical technology businesses and
a great idea,” Clarke adds.
clean technology businesses,” explains Clarke.
“The benefit to companies in our portfolio
“In fact, it’s fundamental. We’ve had some very
is that they will get some exposure and their
interesting companies that we’ve seen over the
brands will become better known.”
years that have had some very strong IP.
Clarke served as managing director of Greater
“They’ve been very popular with our investors if
London Enterprise (GLE) Growth Capital
we have been able to spot a way of monetising
between 2002 and 2009 and also was chief
the IP, which is always a challenge. If you can
executive of GLE’s London Business Angels
overcome that test then you’re onto something
(LBA). When LBA was spun-out by him from GLE
and in five-to-seven years you could get a
in 2009, Clarke founded his present business,
tax-free return under the Enterprise Investment
Angel Capital Group, acting as LBA’s parent
Scheme (EIS) or the Seed Enterprise Investment
company.
Scheme (SEIS) of ten times or more on your
Today, LBA has more than 200 high net worth
initial investment.
individuals as its members. Since 2000 it has
“When it comes to software, you can get
helped more than 250 companies to raise in
copyright and trademarks but not the hard IP in the same way as you can with med-tech and clean-tech. But those companies often require less capital to grow anyway. So from an angel’s point of view, you have to make a choice between which route you want to go down or take a portfolio stance and put a bit of money
IP CLUB CHAMPION bqlive.co.uk
39
excess of £100 million, with over 40% of the companies that have pitched to its angels over the past three years securing investment from its members. Typically the angels help businesses to raise between £100,000 and £1m.
“It’s a competitive world out there when it comes to high net worth individuals deciding where they want to invest their money.”
LBA is also well-connected to sources of matchfunding as it is one of the partners of the already had friends and family funding and have
capitalists, doing due diligence, looking critically
maybe also won a couple of non-dilutive grants.
at pre-money valuations, doing research into
“These companies will perhaps have a prototype
the management teams and really pooling the
which the UK
and some early adopters. The future financial
knowledge of the syndicate.
Government
positioning of the business will have become
“After that, one of the angels in the syndicate
launched in 2011.
more defined so our angel syndicates can do
– the ‘lead angel’ – will usually join the board
Angel Capital Ventures, the other part of Angel
more due-diligence and really figure out if the
of the company. That person will be the most
Capital Group’s business, also has its own
company could scale-up.
appropriate person for the syndicate to put
co-investment funds, called the LBA EIS Round
“We’re quite active in medical technology,
forward – they’ll have experience in that specific
Table Fund. This fund invests in deals alongside
clean technology and digital technology. LBA
sector and they might not necessarily be the
LBA syndicates. LBA raises an HM Revenue &
handles around 150 equity funding applications
person who’s written the biggest cheque.
Customs-approved EIS fund each year, with
a month, so it’s very active in London. Our
One of Angel Capital’s recent success stories
its 2015 fund bringing in £665,000 from its
members are mostly in London and the south-
is Audioboom – a software company that lists
members. These EIS funds’ structures allow LBA
east but we fund deals throughout the country.”
the BBC and the English Premier League among
members to build a portfolio of LBA-backed
Around 70% of the £1.6b a year invested by
its customers – which floated on the London
early-stage deals, which helps to balance their
business angels is pumped into companies in
Stock Exchange in May 2014. An LBA syndicate
risk profile. An LBA SEIS has also been raised to
London and the South-East of England. Yet
had supported Audioboom all the way from its
invest in start-up businesses.
the cold hard cash is only half of the story.
early-stage funding through to its initial public
“We don’t invest in deals such as pubs,
Companies often choose to take investment
offering (IPO).
restaurants and potentially lifestyle businesses”
from business angels because those investors
“Angel investing in the UK has doubled over
says Clarke. “We’re looking at highly-scalable
can also offer them advice and help to introduce
the past two years and there’s no doubting the
technology businesses, usually post-seed, so
them to potential customers or other investors.
importance of tax breaks to angel investors,”
typically two or three years old, which have
“In the past three or four years we’ve probably
Clarke adds. “Policymakers need to keep
had only one deal close that involved a single
their eye on the ball and make sure that, in
angel – they’re all done by syndicates now,”
a rash moment, things aren’t changed. It’s a
says Clarke. “The syndicates are becoming
competitive world out there when it comes to
very structured and very experienced. I’ve been
high net worth individuals deciding where they
in the industry for 20 years and the angel
want to invest their money. It would be great to
syndicates are now acting more like venture
see total EIS and SEIS investments rising to £2bn
£25m London Co-investment Fund and the £100m Angel CoFund,
or £3bn throughout the UK in the near term to fuel the growth of some great early-stage British businesses. I’ve travelled around the world in the past ten years, speaking to other countries about stimulating their levels of angel investment and I’ve never found an eco-system that’s as good as the one that we now have in the UK.”n
40
INTERVIEW bqlive.co.uk
Making waves WFS Technologies in Livingston worked out that it could use low-frequency radio waves to transmit signals underwater. Now its technology is being used by oil and gas companies around the world ONE of the most challenging aspects of working
enabling the radio wave to carry data such as a
captured as they come about and – if they are of
in the oil and gas in the North Sea is finding out
video of what’s going on at the bottom of the
enduring value – then protected.
exactly what’s going on beneath the waves.
sea or temperature readings from along the
“We have some core patents that cover all of
Step forward WFS Technologies. The Livingston-
length of an oil pipeline.
our products and we’re filing further patents
based company uses radio waves to send
“Intellectual property (IP) is fundamental to what
to protect the continuing development work.
signals through the water. Radio waves have
we do,” explains Ruth Patterson, IP manager at
WFS has applied for more than 200 patents in
both an electric field and a magnetic field;
WFS. “To be able to get into the manufacturing
jurisdictions around the world and has been
while the magnetic part of the wave can travel
phase, it helps to have ownership of the IP
granted around 75. Part of Patterson’s job is to
through water more easily, WFS has developed
that you created. Throughout the research and
make sure that WFS is being canny about which
techniques to optimise the transmission of
development (R&D) process, an eye has been
inventions and innovations it protects and which
the electrical part of the wave through water,
kept on making sure that new innovations are
ones it chooses to share with the wider world.
INTERVIEW bqlive.co.uk
41
“As we’ve become more mature as a company,
commercial underwater radio modem in 2006
have included I-Tech, a division of engineering
we’ve also become more diligent at abandoning
and today its devices are used by oil and gas
firm Subsea 7, which used the Seatooth Video
the IP that isn’t of value, otherwise it can
companies in the UK and North America, as well
wireless subsea camera as part of a maintenance
become very expensive to protect everything,”
as customers in Africa, Australia and Japan. The
project in the North Rankin field off the north
says Patterson. “While we have a very active
company has grown to employ around 20 staff
coast of Australia on behalf of oil and gas
policy of pursuing protection, we also have an
and now has an office in Houston, Texas.
operator Woodside. The wireless camera was
active policy of ditching the unnecessary to try
Earlier this year [2015] WFS took over a site at
mounted to an ROV, which didn’t need to have
and keep a main portfolio that does actually
the Inspire Business Centre in Belfast to open
a data cable attached, removing the risk of
reflect the company, what it does and where it is
a manufacturing facility and customer support
snagging.
going. We have to be quite ruthless about what
centre, where it expects to create up to 15 jobs.
Meanwhile, Baker Hughes used a Seatooth
we look after and what we don’t and where we
Bill Strahan was appointed as vice president
system to collect data during a pipeline pre-
invest the money and where we don’t.”
of operations and general manager of the
commissioning project In the Liwan 3-1 gas field
In addition to the patent portfolio, WFS is
business in Northern Ireland. WFS isn’t Hyland’s
in the South China Sea at a depth of 1,000m.
utilising trademarks to help build brand value
first technology company; in 1998 he founded
Next year [2016] the Japanese Agency for
around the subsea radio technology developed.
Livingston-based electronics company Kymata,
Marine-Earth Science & Technology (JAMSTEC)
The key trademark, Seatooth, represents the
which attracted backing from BT, IBM and
is due to use a Seatooth device at depths of
technology enabling transmission of data
Kleiner, Perkins Caufield & Byers before being
2,000m when it explores hydrothermal vents at
wirelessly through fluid. As well as protecting
bought in 2001 by French group Alcatel.
the bottom of the sea.
its own IP, WFS also set up the Subsea Wireless
Back at WFS, Patterson says: “It’s been a very
It’s not just oil and gas companies that have been
Group to promote communication systems that
intense R&D process and also a very innovative
using the technology. Businesses operating in the
operate underwater to the oil and gas industry and to develop open industry standards so that devices made by one manufacturer can talk to products made by rival companies. Conventional wisdom had accepted that radio waves couldn’t
“We have to be quite ruthless about what we look after and what we don’t and where we invest the money and where we don’t.” Ruth Patterson, IP manager at WFS
be sent through the water and so the company has spent time educating the market about its low-frequency radio waves.
one. The guys in the company are hugely
defence and renewable energy sectors have also
The business was founded in 2003 by Brendan
innovative and approach complex problems with
been using WFS’s devices, along with WaveJet,
Hyland and, after initially working on a contract
some really quite fabulous ideas about how
which made battery-powered motorised
with BAE Systems on data communications for
to solve them. And that makes my job really
surfboards. The Scottish company’s sensors were
aircraft, WFS began investigating underwater
interesting as well. It’s a job that I love – working
used in a wireless device that turned off the
radio in 2004. The BAE contract had been a
with innovations, you never know what you’re
engine if the surfer fell off their board.
success, but WFS hadn’t owned the IP and so
going to get. It really is a new thing every day
WFS has also provided its expertise and
Hyland wanted to explore other fields.
and it’s very inspiring.”
technology to researchers at British universities
Hyland and his team weren’t the first people to
Patterson joined WFS as its IP manager in 2011
including Edinburgh, Newcastle, Oxford and
consider the problem.
following a career that has seen her work with
Strathclyde, and American institutions such as
“Good, reliable data is an expensive thing to
IP in a wide variety of guises. She started out as
Georgia Tech and the Massachusetts Institute of
obtain in the oil industry,” explains Patterson.
a patent examiner at the UK Intellectual Property
Technology (MIT).
“As a result, a lot of the assets involved in oil
Office before moving into private practice,
“IP is an important part of developing a strong
operations work blind – once you put it down,
working for patent attorney firm Marks & Clerk
company from research. If you’re going to use
you don’t have a massive amount of information
in Glasgow.
R&D as your basis then protecting that IP makes
about how it was operating. So there is an
Later she joined Scottish Health Innovations
you stronger,” Patterson says. “Your product
obvious need for a solution to give more reliable
(SHI), “I enjoy working in-house at WFS because
differentiators can be protected and that defines
and robust data in an effective manner.
I am doing the day-to-day patent work –
your market place as well.
“WFS’s Seatooth product enables higher-quality
making sure the patents are drafted and filed
“By entering the IP100, it gives us feedback on
and higher-content data to be transmitted
– but at the same time I’m also helping to
how our company is progressing in this area.
over short, medium and long distances. You
commercialise the patents,” Patterson says.
It also shows other companies that there are
can set up a network of sensors and you don’t
“We’re actually using the patents rather
advantages and value in protecting their IP and
need cables connecting each of the sensors
than just protecting them.”
that you can manage your IP portfolio to protect
to the surface. WFS launched the world’s first
Companies that have used WFS’s equipment
the work that you’re doing and build strength.” n
42
IP CLUB CHAMPION bqlive.co.uk
Spreading the knowledge Gordon Brown isn’t just looking to recruit staff for his clients at Nine Twenty but he’s also passionate about spreading the word on the importance of intellectual property to small businesses
IP CLUB CHAMPION bqlive.co.uk
43
AS THE chief executive of Glasgow-based recruitment consultancy Nine Twenty, Gordon Brown sees the value of intellectual property (IP) every single time that he speaks to his clients. “IP is hugely important because most of the time
they use knowledge management to make sure
the way you look at the value of a business is
they keep all the secrets and all the value to their
through its people, its trade secrets and what its
business if a member of staff leaves?
product is,” Brown says.
Brown and his business partners founded 9-20
“A lot of the companies that we speak to don’t
Recruitment as a specialist in the technology
“Our focus was to support the rich-IP, small,
consider IP when they look at their business
sector in 2004. They spotted a gap in the market
new-start technology firms and give them a
plan or the growth of their company or their
because they believed recruitment agencies
support mechanism to find the right talent,”
exit strategy. At times, I feel that, as a recruiter,
in Scotland were concentrating on just big
Brown explains. “Our unique selling point was
I have a responsibility to educate these business
companies, leaving an opportunity for 9-20
about how we engaged with these tech firms,
owners about how they consider their IP. How do
to work with technology start-ups and other
build an employer brand and position them
they retain the knowledge of their staff? How do
small businesses.
as the employer of choice within the Scottish
44
IP CLUB CHAMPION bqlive.co.uk
marketplace.“We helped companies like Gael Software and Memex get to exit. That was another one of our focuses – working with business owners to understand what their strategy was. Was it a lifestyle business, was it about maintaining high profitability or was it about supporting an event like an exit? The majority of the time you do that through your people and you have a resource strategy to get to that exit.” In 2007, the company began developing and implementing its own software, which handled each stage of the recruitment process, from posting advertisements through to handling candidates’ applications. The unit was spun out in 2011 as Firefish Software and led to Brown implementing a management buyout of 9-20 Recruitment in April 2013, which he rebranded as Nine Twenty. “My focus has been to try and keep the DNA of having a bespoke boutique recruitment approach, but having multiple sectors,” Brown says. “In Nine Twenty now, we have technology, engineering, energy, e-health, digital, and sales and marketing. That allows the business to still have a unique approach to how we recruit. “What I didn’t want to do was create a large recruitment firm that was focused on transactions; instead I wanted to create a business with multiple small organisations within it that could act in their own way and recruit in their own way depending on what their market was. My goal now is to take Nine Twenty international.” Over the past two years, the company has grown from having just five staff to now having 33 employees and has spread its wings from its Glasgow birthplace to open offices in Dundee, Southampton and Warrington. Turnover has risen from £500,000 in 2013 to £1.2m last year, with the firm on course to double revenues to £2.4m in its current financial year. Brown, who is also a member of the board of ScotlandIS, the trade body for Scotland’s technology sector, used a small amount of investment to grow his business, which was raised through his network of contacts in the finance community, but most of the expansion has been fuelled by cash from within the company.
“What I didn’t want to do was create a large recruitment firm that was focused on transactions; instead I wanted to create a business with multiple small organisations within it “
IP CLUB CHAMPION bqlive.co.uk
45
“I don’t want to have a lifestyle business – I want to grow and reinvest in the right people, because I believe I will have some form of exit or event in the next five to seven years. I’d like to do that with the directors I have at the moment, so I offer a very lucrative share policy, which gives me buy-in and commitment from the people who are driving the business forward,” he says. Having grown the IP within his own business, Brown is keen to help his clients to make the most of the innovations and ideas in their companies too. “If you look at software engineering for example, where you have lots of developers, how do you ensure you put a value on the IP?” he says. “The IP100 is an opportunity to give business owners the chance to consider that when it comes to evolving and growing their company. “I don’t think there’s enough education in the marketplace. If I look back over the history of Nine Twenty, Stephen Robertson from Metis Partners has been a non-executive director for me and he’s been instrumental. Metis has supported and educated me through growing 9-20 Recruitment, spinning out a company, leading a management buyout and working with Jumpstart to look at research and development (R&D) tax relief. “I’m just a recruitment consultant – I’m not a consultant when it comes to IP – but I’m surprised at the lack of knowledge within a lot of businesses that don’t even consider their IP and how they can look at adding real value at the bottom line. “There’s a war of talent across all industries right now and it’s coming specifically from good graduates, whether they be in engineering or technology or digital or marketing. The key for me is how do you attract that talent then retain it and then maximise and increase your knowledge by putting the right processes in place. “As a recruitment company, a lot of the time we get a phone call from a client saying ‘Someone’s left and there’s a big black hole, can you come and fill it?’. Where there’s a big black hole and that knowledge has moved on, I ask the company questions about how they are going to protect their knowledge and IP if other members of staff move on? n
46
INTERVIEW bqlive.co.uk
Having skin in the game Owning the intellectual property behind her range of soaps and other products allowed Helen Gilmour to move her business from upstate New York to Scotland WHEN Helen Gilmour’s son, Cameron, was born in January 1999, he had skin issues. As a trainee nurse, Gilmour knew that it wasn’t unusual for babies to have skin problems because they lose around 9% of the water in their bodies after they’re born. Cameron’s skin problems didn’t clear up though and he developed a bad rash on his back so Gilmour took him to her doctor, who diagnosed childhood eczema when he was three months old and prescribed a steroid cream. But when Gilmour returned to her nursing course and learned about what was in the steroid cream and what its long-term effects could be – such as developing diabetes or becoming sterile – she knew that she had to explore other options for her son. Gilmour, who is originally from the Bronx in New York City and who was living with her family in upstate New York at the time, developed a soap to help her son and, within a month, his eczema had cleared up. Her family and friends soon became interested in the soap and it wasn’t
INTERVIEW bqlive.co.uk
long before they suggested that she should set
47
I’m going to get me one of those . I’m going to go to Sco tland and marry a Sco tsman.’
up a business to start selling her product. As Cameron grew up, he wanted to have other products that he could use and so Gilmour developed brand extensions, including a bubble bath. “He was my guinea pig,” she laughs. Having started to build her business through her website, Gilmour’s big break came through online video site YouTube. “YouTube is a lot more popular in the States than it is here,” Gilmour explains. “I was watching videos of women showing you how to put make-up on and some of them had 100,000 followers. Reading the comments that their followers left underneath the videos, it was clear that they were going out and buying the
move back to his native Scotland. Gilmour
eyeshadows and blushers and other products
and her brother had watched Mel Gibson in
soaps for Historic Scotland – the Scottish
that the women were recommending on their
Braveheart and, at the end of the film, Gilmour
Government agency that looks after more than
videos. “One of the women on YouTube wanted
had turned to her brother and said “I’m going
300 sites, including Edinburgh Castle, Linlithgow
to run a competition for her subscribers and
to get me one of those. I’m going to go to
Palace and Stirling Castle – and the National
I got in touch with her and offered her my
Scotland and marry a Scotsman.” She visited
Trust for Scotland, the conservation charity that
products to use as prizes, as long as she also
for three months and then went back to the
manages 129 properties, including Culloden
reviewed them in one of her videos. That blew
US, where she was studying for a degree in
Battlefield, the David Livingstone Centre and the
the business out of the water. She explained in
film and television. The university offered the
Falkland Palace.
her video that I had invented the soap because
chance to work in Europe following graduation,
Other tourist attractions that stock her Scottish-
my son had eczema and I didn’t realise how
so she signed up to work in Scotland for a
themed soaps include Dunvegan Castle,
many people had the condition. That’s how the
further six months.
Edinburgh Gin Distillery, Eilean Donan Castle,
business grew in the States.”
She joined an online forum to help plan her
Glamis Castle, the New Lanark World Heritage
Eczema, or dermatitis, is a dry skin condition
return trip to Scotland and met Barry through
Site, Prestongrange Museum, and the Wallace
that comes in a broad range of different forms
the website. He ended up visiting her in America
Monument. As well as producing the Scottish
and varies from person to person. The National
for two weeks. The pair have now been
soaps, Gilmour also makes soaps from beer for
Eczema Association estimates that there are
together for nearly 20 years. “It wasn’t like I
Grunting Growler, a craft ale shop in Glasgow,
around 31.6 million cases of eczema in the
picked the first one – I picked the right one,”
and for Skye Brewery.
United States, with at least 17.8 million of those
she smiles.
The next step for Gilmour is to develop and
cases classed as moderate to severe.
When they moved back across the Atlantic,
market the product that changed her son’s
Around 10.7% of American children have the
Gilmour slowly began to build her sales of the
life under the Soapurity brand. Protecting the
condition, with the figure rising as high as 18%
eczema soaps in Scotland, but the process was
intellectual property (IP) behind the business is
in some states.
much slower than it had been in the US. While
an important part of her plan.
On the other side of “the Pond”, the condition
she continued to grow sales, Gilmour also
“No one knows what’s in the soaps per se,”
is just as prevalent. In the UK, the National
introduced a second focus for the company,
explains Gilmour. “You can’t patent the recipe
Eczema Society estimates that one in five
on business-to-business products. She began
because you need to put the ingredients on
children and one in twelve adults have eczema,
producing soaps aimed at the tourist industry,
the label. But nobody knows exactly what
highlighting the scale of the problem but also
featuring impressions of Highland cows, Scottie
proportions of the oils that I put into the soaps.
the size of the market for products that can help
dogs, thistles and the lion rampant.
The tourist soaps are seasonal, but Soapurity
to relieve the condition.
Her soaps have been a big hit and are now on
and the medicinal soaps will be year-round.
Gilmour’s business grew its sales to between
sale in nearly 50 shops around the country,
It’s really important for me to protect as much
US$2,500 and US$3,000 a week and then in
including three branches of Edinburgh Woollen
of the IP as I can and then go global with
2011 her husband, Barry, suggested that they
Mill. Gilmour has won contracts to produce
the products.” n
48
IP CLUB CHAMPION bqlive.co.uk
“It’s not often that tax credits are described as “sexy”. But the word certainly does justice for research and development (R&D) tax credits, which have helped businesses to claim back millions of pounds from the taxman”
IT’S not often that tax credits are described as “sexy”. But the word certainly does justice for research and development (R&D) tax credits, which have helped businesses to claim back millions of pounds from the taxman. The Treasury introduced R&D relief on corporation tax in 2000. Businesses of all shapes and sizes have been able to claw money back from HM Revenue & Customs (HMRC) if they have developed a technological advance to improve a product or service. As long as they’ve used qualified staff working under appropriate project controls and there’s been an element of doubt about the outcome of their research then companies stand a good chance of filing a claim. Jumpstart, an Edinburgh-based consultancy that has 15 technical analysts operating throughout the UK offers advice to a whole range of companies. Jumpstart takes a technical approach to tax credits, rather than approaching them from an accountancy point
We’ve got tax appeal Jumpstart helps companies to get tax relief on their R&D costs and has become an evangelist on the importance of intellectual property to small businesses
of view. Since we launched the business in 2008, we have secured more than £60m of benefits for our clients,” explains director and technical analyst Richard Edwards. “During the process of securing those benefits, we have identified, documented and reported in excess of £300m-worth of eligible activity on behalf of our clients.” Edwards founded Jumpstart with Don Galloway and Stuart Wyse in an attic. Managing director Brian Williamson completed the team in 2008. Jumpstart raised £3.4m in equity finance to fuel the growth of its own operations from the Business Growth Fund (BGF) in February 2014. The BGF initially pumps between £2m and £10m into a company in return for an equity stake and a seat on the board and has so far backed around 100 entrepreneurs. As well as the cash, the BGF also brought
50
IP CLUB CHAMPION bqlive.co.uk
Most of the R&D tax relief documentation produced by HMRC is on the technical side of eligibility – it’s about what is and what is not eligible for relief – it’s not all about the numbers, it’s about the challenges being faced further experience and expertise on board at
R&D tax relief but they don’t understand the
10 to 15 years I think more SMEs are realising
Jumpstart in the form of Jim Faulds as chairman.
technology well enough to be able to apply
that there’s an intrinsic value to IP – whether
Faulds founded his eponymous advertising
HMRC’s legislation in identifying what is and
it’s a patent, trademark or even branding – and
agency in 1985 and grew it into the largest
isn’t eligible for relief.” Jumpstart’s analysts are
so they’re now recognising the commercial
outside London. “Taking a technical approach
scientists and technologists, many of whom
value of the IP. “We got involved in the IP100
instead of an accounting approach enables us
have been educated to doctorate-level and
because we’re passionate about spreading the
to lever greater accuracy, compliance and value
most of whom have industrial R&D experience.
message about the commercial value of IP. All
into claims on behalf of clients explains Edwards.
Jumpstart identifies what qualifies as eligible
innovative, fast-growing SMEs have the same
“Most of the R&D tax relief documentation
activity within the company rather than relying
problem – they never have enough cash. We’re
produced by HMRC is on the technical side
on the business itself to know. A broad variety
in the business of helping to find more cash for
of eligibility – it’s about what is and what is
of clients have used Jumpstart’s services.
those companies. For innovative SMEs that are
not eligible for relief – it’s not all about the
“Almost every company that has some form of
growing fast, recognising their IP, documenting
numbers, it’s about the challenges being faced,
intellectual property (IP) will have carried out
it and valuing it are really important steps to
the activities undertaken and the advances in
R&D and will be eligible for tax relief,” says
bringing more funding into the business – and
knowledge, understanding and technology that
Edwards. “Up until 10 or 15 years ago, IP was
R&D tax credits are another way of leveraging
need to be achieved in order to be eligible to
not of great concern or interest to small and
funding into exactly the same sort of companies.
claim the relief.
medium-sized enterprises. It was seen as the
As soon as they document and put a value on
“There are about 500 pages of legislation. The
preserve of large companies. That’s because
that IP, they can use that as a lever for bringing
majority of our new business comes through
most SMEs believed the cost of securing
in additional bank funding or reducing the
accountants because they come to us and say
and policing IP protection outweighed the
equity stake that they need to give away to an
that they have a client that wants to apply for
commercial value of the IP. “But in the past
investor.” n
MADE 2015
51
A MAJOR EVENT TO INSPIRE, MOTIVATE & SHARE BUSINESS SUCCESS bqlive.co.uk
National Emerging Entrepreneur Dinner 2016 In association with
Thursday 25 February 2016, ROYAL ARMOURIES, LEEDS BQ Magazine is delighted to announce that nominations are now open for the BQ National Emerging Entrepreneur Dinner 2016 sponsored by Irwin Mitchell. Celebrate the legacy of MADE by supporting emerging entrepreneurs across the UK. The search now begins once again to identify some of the UK’s leading emerging entrepreneurs. We are seeking nominations across Scotland, the North East and Cumbria, Yorkshire and the West Midlands to find the best in emerging entrepreneurial talent.
The BQ National Emerging Entrepreneur dinner brings together established entrepreneurs with the challenge of being accompanied by individuals who in their view are representative of a next generation entrepreneur. The 2016 national dinner is being held at the Royal Armouries, Leeds on Thursday 25 February 2016 where we will celebrate and acknowledge entrepreneurship across the UK. If you would like to nominate an emerging entrepreneur for consideration then visit www.bqlive.co.uk/events/bq-events/
“It’s a great honour to win this award. Whilst it is recognising entrepreneurship it is also recognition for the whole company that have put in the hours of work to enable me to stand up and receive it” Richard Kirk, founder and CEO of PolyPhotonix
Entries from Scotland open now at bqlive.co.uk/events/bq-events/
10 10 0 0 0 0 0 0 10 1 1 0 0 0 0 0 0 1 1 1 0 0 0 0 0 0 1 1 1N E W S 0 0 0 0 0 0 5 2 1 1 1 0 10 0 10 0 0 0 0 0 0 0 1 1 1 0 0 0 0 0 0 1 1 0 0 0 0 1 1 10 0 1 0 0 0 0 0 1 1 1 0 0 0 0 0 0 1 1 1 10 0 10 0 0 0 0 10 0 0 0 1 1 0 0 0 0 0 0 1 1 1 0 0 0 0 0 0 1 1 0 0 0 0 1 1 10 0 1 0 0 0 0 1 1 1 0 0 0 0 0 1 0 1 1 0 0 0 0 0 1 0 1 1 0 0 0 0 0 0 1 1 1 0 0 0 0 0 1 1 0 1 0 0 0 0 “The IP 0 League 1Table gives SMEs 10 0 10 0 1 0 0 0 1 1 0recognition for the IP they’ve 0 created. 0 0 1 0 0 0 1 0 1 0 0 1 0 0 0 This is a 0 unique 1opportunity to 0 1 0 1 0 0 0 1 0 1 0 0 your company1as00IP-savvy 1 00 10benchmark 1 0 0 0 0 1 1 0 0 0 and demonstrate to the world how 0 0 0 1your company is.” 0 10 0 1 0 0 1 10 0 1 IP-rich 0 10 10 0 1 0 0 0 0 0 0 1 1 1 0 0 10 0 1 0 0 0 0 0 10 0 0 1 1 0 0 0 0 0 1 0 1 1 0 0 0 0 1 0 10 1 0 0 0 0 0 1 0 1 1 0 0 0 0 1 1 0 1 0 0 0 0 0 1 1 0 1 0 0 0 0 0 1 1 0 1 0 0 0 0 0 1 1 0 0 0 0 0 0 1 1 0 1 0 0 0 0 0 1 1 0 1 0 0 0 1 0 1 0 0 10 0 0 0 1 0 0 1 1 0 0 0 0 1 0 0 1 1 0 0 0 0 1 0 0 1 1 0 0 0 0 1 10 10 0 0 0 0 0 0 1 1 1 0 0 0 0 0 0 1 1 0 0 0 0 1 1 10 0 1 0 1 10 10 0 0 0 0 0 0 0 1 1 1 0 0 0 10 0 10 0 10 0 10 0 10 0 10 0 10 0 10 0 10 10 10 10 0 0 0 0 0 0 1 1 1 0 0 0 0 0 1 1 0 0 0 0 0 0 1 1 1 0 0 0 10 0 10 0 10 0 10 0 10 0 10 0 10 0 10 0 10 0 10 1 10 0 0 0 0 0 0 1 1 1 0 0 0 1 0 00 1 0 0 0 0 0 1 0 1 1 0 0 0 0 0 0 1 1 0 0 0 0 1 1 10 0 1 0 0www.bqlive.co.uk/IP100 0 0 0 1 1 0 1 0 0 0 0 0 1 1 0 10 0 1 0 10 0 0 10 0 bqlive.co.uk
Stephen Robertson, founder, Metis Partners
IP
in association with