How can US businesses protect their Intellectual Property when expanding to the UK?
The majority of Employer of Record UK’s clients are US based businesses and it is common that they sit in the technology sector. With so much of the value of these businesses being contained in their intellectual property (IP), it is of vital importance that the ownership of all the IP created by their UK employees, lies entirely with the US company. Employer of Record UK uses a pass-through mechanism to ensure that we, as the legal employer, have ownership of the IP in the first instance. And then, by virtue of the Service Agreement we have with our client, we pass that through immediately and entirely.
When US businesses who are expanding to the UK have additional questions on IP protection, we bring in the experts! This article explores some of the key considerations American businesses have when seeking to protect themselves in the UK.
IP in the UK – Key Considerations
To effectively operate a business in the United Kingdom, it’s crucial to understand that intellectual property protections are limited to specific geographic areas. This means that only the jurisdiction where they are registered can enforce such protections. The most powerful IP safeguards are trademarks and patents, which require registration every time a business expands its operations to a new country or market. Failure to register IP assets can leave them vulnerable to infringement, resulting in severe consequences for the business. This may give competitors the opportunity to copy parts of your brand, resulting in financial losses, harm to your reputation, and difficulties in protecting unregistered assets in court or preventing infringement.
What IP related challenges might be faced by a US business entering the UK market?
When American businesses are considering entering the UK market, they can take advantage of the strong alignment between the intellectual property laws and procedures in both countries. This coherence makes it easier to safeguard their assets before entering the market. However, it can also lead businesses to think they can handle their intangible intellectual property independently. But not having a comprehensive understanding of the UK’s IP laws could put the businesses at risk. Therefore, it’s recommended that businesses work with a British law firm while registering their intellectual property in the UK.
While there aren’t any major barriers to registering and safeguarding intellectual property for American businesses that are expanding into the UK market, there are still potential difficulties that could arise. The UK’s trademark categories are distinct, and this could lead to a situation where an incorrect application is made, or a critical registration is missed, leaving your intellectual property exposed to infringement. This underlines the importance of engaging a UK-based legal firm to handle their intellectual property.
Passing off laws, Infringement and Negotiation
In the UK, if an unregistered intellectual property asset is violated, the “passing off” laws can be utilized to safeguard the property. Nonetheless, this approach may not be successful when expanding into a foreign market where brand recognition may not exist. Therefore, it is crucial to register all intellectual property assets to ensure their protection.
Unintentional infringement is another possible outcome, particularly if a smaller business with the same name already possesses a UK trademark. To steer clear of contentious conflicts or being denied registration, it is vital to access searching and clearing services before registering your assets.
If the trademark you want to register is already owned, negotiation could be a potential option. Engaging a UK intellectual property expert, who truly understands the market factors and nuances, will give you the best chance of arriving at the most advantageous deal.
Employer of Record work with JMW Solicitors, one of the leading intellectual property firms in the UK. Their expertise in the UK’s intellectual property landscape is unparalleled, having collaborated with numerous US businesses in securing their assets. JMW offer a comprehensive suite of services ranging from registering and defending assets, to managing your IP portfolio and devising strategies to maximize financial returns. If the issues in this article are relevant to you, we would be pleased to make an introduction.
Sam Barnes
Co-Founder & Sales Director
