What would an independent Scottish government do about Intellectual Property?






















In view of recent opinion polls I have taken another look at page 102 of the Scottish Government's white paper Scotland's Future. That contains a section headed "Intellectual Property" which consists of 4 paragraphs though only the first sets out any policy. The second is concerned with the Scottish Arbitration Centre, the third is on immigration and the fourth is on a joint venture between Visit Scotland and the Walt Disney Company and the exposition of Scottish food and drink in Florida.

So what is the policy? I reproduce the first paragraph of the section on IP in full:
"We will ensure continuity of the legal framework for protecting intellectual property rights. Independence will also allow Scotland to offer a simpler and cheaper, more business-friendly model than the current UK system, which is bureaucratic and expensive, especially for small firms. The UK is one of the few EU countries which does not offer a scheme which covers the basics of protection. Scotland could follow, for example, the German model which protects technical innovations."
As to the first sentence on the continuity of the legal framework, I am very glad to hear it. Of course, a large part of that legal framework derives from EU regulations - Community trade marks, designs and plant breeders' rights - and there will soon be the Unitary Patent which will apply to most of the EU member states. It is by no means certain that Scotland would be allowed to join the EU on the day that it secedes from the Union or indeed at all since Scottish secession would not be welcomed by countries like Spain and Belgium with their own secessionist regions. Scotland would also have to join the World Trade Organization and the World Intellectual Property Organization and accede to and ratify the European Patent Convention, the Paris and Berne Conventions and other intellectual property treaties all of which would take time.

As for the second sentence the biggest problem for small firms is enforcement. We have gone quite a long way in that regard in England and Wales by establishing the Intellectual Property Enterprise Court including the small claims track. There is nothing like that in Scotland.  Intellectual property claims have to proceed in the Court of Session in Edinburgh. On the last occasion I found myself in the small claims track of IPEC I was representing a business in the Highlands in relation to infringements that were alleged to have taken place in Scotland. Both parties found it cheaper and easier to litigate in the small claims track where the costs downside was  minimal than in Edinburgh. In  Buchanan v. Alba Diagnostics Ltd [2004] UKHL 5, 2004 GWD 5-95, 2004 SCLR 273, 2004 SC (HL) 9, (2004) 27(4) IPD 27034, 2004 SLT 255, [2004] RPC 34 which was a case between two Scottish SME the case went on for ages even before it got anywhere near the House of Lords and there were even experiments in the well of the court. It must have cost the parties a fortune.

The third sentence of the policy seems to favour utility models. As Laddie, Prescott and Vitoria have observed we used to have something like utility models in the whole UK until the 1930s when we protected functional designs. Until the Copyright Designs and Patents Act 1988 came into force we provided very extensive protection for industrial designs by treating design and engineering drawings as artistic works and products made to such drawings as infringing copies of those works even though the infringer never had sight of those drawings. Remedies were draconian for each infringing copy was treated as the copyright owner. The decision of the House of Lords in  British Leyland Motor Corp and others v Armstrong Patents Company Ltd and others [1986] 2 WLR 400, [1986] UKHL 7, [1986] RPC 279, (1986) 5 Tr LR 97, [1986] FSR 221, [1986] 1 All ER 850, [1986] ECC 534, [1986] AC 577 prompted the reform of industrial design law.

Both Sir John Whitford and the government of the day considered re-introducing utility models as an alternative to artistic copyright protection of industrial designs but ruled it out as there was no support, and indeed some opposition, from British industry. Much the same happened when the Commission canvassed the idea of a European utility model some years ago. The problem is that utility models are essentially unexamined patents which add to the problems of "patent thickets" which Professor Hargreaves identified in his report.  It is true that we are one of the few countries in the EU not to have utility models but that is because we have something better: unregistered design rights which come into being automatically and cost business nothing. Scottish businesses had the opportunity of objecting to unregistered design right in the consultation on the reform of design law following Hargreaves but none chose to do so.

This very brief and vague statement of policy probably has something to do with the fact that innovation in Scotland is not what it was.  As I showed in "Funding your Invention: R & D Tax Credits"  27 Aug 2014 NIPC Inventors Club there were only 900 British patent applications from Scotland in 2013 compared to 2,822 from South East England, 2,588 from London and 1,802 from East Anglia and only 905 applications for R & D tax credit from Scotland compared to 3,030 from the South East, 2,715 from London and 1,630 from the East of England.  Of course Scotland does have the revenues from North Sea oil for the time being but that will run out one day. Won't it.

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