Protecting intellectual property

by The Times 100 on Monday 7th February, 2011

The entrepreneur and founder of the European pallet distribution company Pall-Ex, Hilary Devey, has been announced as the replacement for James Caan on the next series of Dragons' Den. Devey launched Pall-Ex in 1996, having sold her car and house to finance its start-up. The firm now turns over almost 100 million pounds per year. Hilary Devey has already been seen on TV as one of Channel 4's 'Secret Millionaires' and also as the 'Business Inspector' in a series of programmes where she gave advice to the owners of struggling businesses. She will now be joining Peter Jones, Theo Paphitis, Duncan Bannatyne and Deborah Meaden in the Dragons' lair as budding entrepreneurs pitch their ideas in the hope of securing investment. (BBC, 4th February 2011)

Getting the necessary finance is just one of many challenges facing prospective entrepreneurs. Protecting ideas, designs and inventions is also important if they are to benefit fully from their intellectual property (IP). The Intellectual Property Office is a UK government body which helps people to get the right type of protection for their creation or invention. There are four main types of intellectual property — patents, design rights, trademarks and copyright. The IP rights apply to businesses and individuals and are recognised in UK law, as well as in agreements with other countries.

Through managing and protecting intellectual property rights, the IPO encourages innovation and creativity. There is more incentive for individuals and firms to invest in new ideas if they know they are the ones who will receive the rewards. In the age of the internet, new ideas can be shared easily and quickly. Large, established organisations are likely to have more resources at their disposal to help bring an idea to market. To ensure that entrepreneurs such as those on Dragons' Den do not lose out on getting their ideas to market first, registering and protecting intellectual property is an essential step.

Questions
1.List the four main categories of intellectual property.
2.In addition to all the other challenges entrepreneurs face, they also have to contend with ever-changing factors in the external environment. Use the IPO case study to describe these external factors.
3.Analyse why it is important for new entrepreneurs to protect their intellectual property.

Answers
1.List the four main categories of intellectual property

  • Patents
  • Design rights
  • Trademarks
  • Copyright

2.In addition to all the other challenges entrepreneurs face, they also have to contend with ever-changing factors in the external environment. Use the IPO case study to describe these external factors.

The external factors are:

  • Social factors – things that relate to the population such as changing trends and tastes and the availability of labour
  • Legal factors – the laws which affect the business, the workers or the customers
  • Economic factors – the general position of the economy in the business cycle and the associated economic factors such as inflation, exchange rates and levels of employment
  • Political factors – government policies that affect businesses such as those related to taxation and the National Minimum Wage
  • Technological factors – changing technology can provide opportunities and challenges for businesses.

3.Analyse why it is important for new entrepreneurs to protect their intellectual property.

Relevant answers may include:

  • To ensure they are rewarded for their ideas
  • To prevent others from benefiting from their ideas, especially established organisations which might be able to bring an idea to market more quickly
  • To encourage future innovation. If they have benefited financially, they may have more resources to support future ideas
  • To establish unique selling propositions
  • Because intellectual property can add to the value of a business.

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