Patent - Sole Trader or Ltd Company

[Alan Huntley]

Hi, my first post here so forgive me if I've posted in the wrong place.

I've been running my small business as sole trader for 10 years. Recently I have developed a product for which I am planning on applying for a Patent and Design rights.

My question is would it be wise to register as a Ltd company just in case the worse happens and my product is patented but at some point it is legally challenged, I lose and am liable for some sort of penalty. Would the Ltd company status give me protection (assuming the Patent is in the company name, not mine)?

Thanks for your time.

 

[Karllacey]

I do not see why your limited company would not protect you, nor do I see why your patent would be legally challenged after the event. I am not skilled within the patents area although I understand that there is a timeframe for people to challenge any patent before it is granted and it does not necessarily have to be a legal challenge.

One point of note that is that if you put the patent into the company and get shareholders, directors unless you specify this within the contract I dare say that they have will have legal challenge on the patent if you do not protect yourself whereas if you keep the patent in your sole name and have the limited company separate it might give you more leverage.

Just thinking of the bigger picture.

 

[WeddingsInWales]

Once a patent is applied for, it is eventually published, before it is granted, so there is scope for anyone to challenge the patent before it is 'granted'. A Patent Application can spend a year or more as an Application before you incurr further fees to get it granted. Searches etc are done to check it is not infringing any other patent. You can also buy insurance against anyone copying it though you would need to check the extent of the cover by looking at the 'exclusions' pages. A patent without insurance may be of no practical use if you cannot afford the £100k or more that it might eventually cost you to enforce it in the courts. But all this sort of advice you should be able to gain from a Patent Agent in any case, and you would go to a Patent Agent in order to apply for a Patent.

 

[Panoramix IP]

I practice as an IP lawyer in the UK and US. My advice would be to file the patent in the name of a limited company (or assign to the limited company shortly after filing). If you are looking for investment at any point in the future you will need to set up a limited company anyway. Many grants and innovation support are not available to sole traders. Most patents are never challenged. This typically only happens if you seek to assert your patent against someone else or if you are active in a congested IP field and your patent application is opposed. Patenting is expensive but if you are looking to successfully market and sell a new product without it being copied, or at least having recourse against copiers, then patent protection (and design protection is a must). Please let me know if you would like to discuss further.