Most companies will not look at outside ideas unless an application for protection has been obtained.
You can hire an agent registered to practise before the UK Patent office to provide this service for you for a fee. You can also seek advice about securing ‘unregistered’ design protection. Meanwhile, it is important that you document your idea and put the original documentation in a safe place. You may want to keep an ‘invention ledger’: a bound notebook to record all pertinent information regarding the steps you have taken to protect your idea, a file for legal documents, sales receipts etc. Keep this ledger up to date. Include a description and sketch of the product, its elements and how it works. If you make a prototype, photograph or video it and keep a copy with the ledger.
Patent
The most comprehensive protection of an idea is a patent. Many solicitors advise this form of protection. This can be arranged through a patent agent. However, it is usually impractical to patent ideas for two main reasons:
1. The fees and costs in pursuing a patent are considerable. Even for professional inventors, the ratio of ideas to successes is such that it is economically not justifiable to take out patents on their ideas.
2. The time taken for a patent to be granted and enforced is usually much longer than the lifecycle of the product. There are few items of longevity in the toy world. Most companies change at least one third to one half of their line every year. Although court action can be retrospective, the damage has often been done.
Patents can be taken out for the United Kingdom and elsewhere in Europe or in individual countries throughout the world.
Design Registration
The next most comprehensive form of protection is design registration. Any graphic material can be registered (provided it is original) for a few hundred pounds at the Design Registration Office. This protects against all similar designs, even if those designs were conceived seperately and are coincidental.
Photographs or drawings with an aesthetic content (not industrial product engineering). Again, this is expensive if registration is done speculatively.
This form of protection applies to the United Kingdom only.
Alternatively you can investigate the right to protection under the Unregistered Designs Directive.
Copyright
A good and much used form of protection is copyright. Any graphic or textual material can be copyrighted by putting a ‘c’ in a circle followed by the name of the person or company who owns the copyright and the date, (for extra security, a copy of the work may be deposited with a solicitor or at a bank to prove date of copyright). Copyright gives good protection for games and for items which can be manufactured and/or made up into three dimensions from drawings without further investigation.
However, there are disadvantages:
1. It is difficult and expensive to detail a design or mechanism comprehensively.
2. Small deviations from the original material may invalidate a copyright infringement.
3. In order to make a claim, it is necessary to prove that the infringing party has copied directly the original material. Coincidental similarity is not covered.
Non-disclosure form
Some solicitors advise that inventors should get companies to sign a non-disclosure letter or confidentiality form before they see the new idea. This gives protection specific to the relationship between the inventor and person or company to whom the idea is submitted. However, because this type of document is legally biased in favour of the inventor and is constrictive, most companies will not sign. In order to evaluate a product it is difficult to treat it confidentially and a company may unwittingly be liable to the inventor in the future.
Conclusion
Whatever form of protection an inventor has, it is important to keep an accurate record of what was shown and submitted to be signed by both parties. Litigation is rarely successful financially.
The simplest and most effective protection is reputation, and it is suggested that anyone wishing to submit an idea should call or write for references. The UK toy and game industry is small enough for word to get around rapidly of any unethical business behaviour.
Once an idea has been licensed it is usually up to the licensee to protect the product. They have the expertise and, more importantly, the money to do so.
The Contract
Once the inventor and the manufacturer/marketing company (the licensee) have reached an agreement, a contract needs to be negotiated. The main points to be found in a licensing contract are:
1. The parties – details of the identity of the licensor (or his agent) and the licensee.
2. The product – the subject matter of the agreement.
3. Financial commitments – royalty rates, the basis of calculation, the timing of payments and details of any advances and minimum guarantees.
4. The territory – the geographical area in which the licensee will be permitted to exercise their rights.
Financial commitments
Royalty rates are generally 3-8% of the licensee’s net sale price. Rates vary due to certain factors – for example, lower rates for items to go with a character licence, higher rates if the item is a proven success in another territory.
Advances are an up-front payment in advance of royalties.
Minimum guarantees are also frequently a part of licence agreements. A minimum guarantee is the absolute minimum payment that will have to be made to the licensee, regardless of the success or failure of their use of the product. This also ensures that the licensee does not hold on to an idea indefinitely without making payments.
