The legal importance of IP for small and medium-sized businesses within the UK

Hana Hassanbek – Brandsmiths 


Protecting Intellectual Property (IP) is one of the most valuable assets for any business. IP protection is vital for growth and innovation of a business. Incorporating IP into business strategy allows firms to distinguish themselves from competitors and creates a brand identity. It also adds significant value to a business as it acquires these unique property rights.

IP can consist of inventions, symbols, images, logos as well as literary and artistic works. These are all fundamental intangible property that only become valuable in the context of the business. IP is an umbrella term for a variety of different rights such as: Patents, Trade marks, Designs, Copyright and confidential information.  Patents protect the invention behind a product or process. Trade Marks protect brands and other distinguishing features of a product or service that allow consumers to identify your business. Designs look to protect the appearance of products. Copyright can protect a huge range of creative material from software , databases, website imagery and marketing material. Confidential Information is a useful tool to protect internal secrets from competitors, for example customer lists or a drinks receipt. 

This article is based on law within England and Wales and will focus on IP within small and medium-sized businesses (SMEs) as we discuss how to register and protect IP, the importance of IP and the repercussions if businesses do not protect their IP.


SMEs account for 99% of all UK businesses and employ over 13 million people. SMEs are across all industries and are the key to future growth. The European Commission published a report on 26 April 2021 suggesting that “SMEs owning intellectual property rights generate 68% more revenue per employee than their peers who don’t possess IP rights”. These are clear indications that IP should be a focus point for the R&D in SMEs. Below are two ways in which SMEs can start focusing on their IP:

  1. IP HEALTH CHECK: SMEs can start their search here, the IP Health Check is a free online tool that will allow business owners to have a confidential report that provides an explanation of potential registerable IP in the business.
  2. IP FOR BUSINESS: The IPO has a free online tool and training kit that helps take SMEs’ ideas to the market. There is an e-learning section to help businesses understand all the different types of IP and why it is important.  

Recommendations on how to protect IP 

Below are the different ways in which SMEs can protect their IP:

  1. IP Audit: A comprehensive audit of the IP position in your business is a great first step. It will allow you to identify where the business is strong in IP, and also where there are areas that need attention.
  2. Register your rights: SMEs can register their trade marks and designs through the UK Intellectual Property Office (IPO). There are fees for this process that vary which can depend for example with trademarks on how wide the protection sought is and thus the number of classes of goods and/or services registered in.  An IP Audit will assist in identifying what is capable of registration. 
  3. Protect IP early and have good lawyers: Registering rights can be a long process, for example, registering a UK patent takes approximately 2-4 years. There is a fast-track option but that is more costly. A trade mark application can be filed relatively quickly, but usually take around 6 months to obtain the registration. It is recommended that a trade mark search be carried out beforehand in order to see if the mark is too similar to another already registered.
  4. Copyright protection: Since there is no register of copyright works, it is vital for SMEs to maintain evidence of creation of the works be protected by copyright. Helpful evidence includes: the date of the work created, the process of creating the work and who is the owner of the copyright.  It is also important to ensure that the ownership of IP is dealt with at the start when commissioning third parties to produce material for the business that might have copyright. The default position is that the commissioner is not the legal owner.

Importance of protecting IP 

The European Commission state that SMEs who have IP as a key pillar of their business model and have registered rights are “33% more likely to become high-growth firms”. SMEs need to focus on recognising its IP right, and making IP an integral part of their long-term business strategy as it sets their business apart from rivals and forms a key part of the brand’s marketing. Protecting the brand’s name and logo is pivotal to business success. In addition, SMEs add instant value in registering their rights as such rights can be sold or licenced to third parties, thus creating royalty payments, which is an important revenue stream back into the business.

Examples of failure to protect IP 

The main aim for SMEs that want to protect their IP is to be proactive with registering their rights. There are various pitfalls that SMEs encounter, such as commissioning third parties to develop literature or websites or creating a brand identity that is too closely linked to a registered trade mark or trading-style of another business. Further, failing to register your trade mark early can lead to problems in the long-term if a third party enters the market with the same or similar name.  Problems like these can be easily avoided by obtaining sound legal advice in advance and ensuring that agreements with third parties have clear IP clauses with the appropriate licence agreement, if required.


Overall, protecting IP is very important. In short, IP typically underpins a businesses key revenue drivers and protecting that is vital. Through protecting IP, this allows the owner of the registered mark(s) to have legal control over their IP. This can either prevent others from infringing the owner’s right or the owner can create strategic alliances for remuneration.  It is also adds significant value to a business which is important if the business is raising finance or being sold.

How Brandsmiths can help

At Brandsmiths, we represent a multitude of IP-rich businesses to help them identify, protect and enforce their IP rights. We offer specialist trade mark advice to ensure that SME owners are well-advised and aware of the fees that can be incurred. We can provide key assistance on IP audits in order to maximise the value of the IP within a business. Please see our website for more information or email on

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