BQ Special Report

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

BQ Magazine is published quarterly by room501 Ltd.

BQ Magazine is available to read online at bqlive.co.uk for when you are on the move

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room501 Publishing Ltd is part of BE Group, the UK’s market leading business improvement specialists. www.be-group.co.uk

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

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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

33

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