The Intellectual Property Regulation Board (IPReg) is set to apply to become an alternative business structure (ABS) licensing authority, it has emerged.
A scoping document published last week lays out the process required to be designated in October 2013, after both the Chartered Institute of Patent Attorneys (CIPA) and Institute of Trade Mark Attorneys (ITMA) – both of which are regulated by IPReg – signalled their support for the move.
IP firms have long been allowed non-lawyer owners – the highest profile is AIM-listed Murgitroyd – although IPReg rules require 75% lawyer ownership.
Those which have non-lawyer owners and managers will need to become ABSs once the Legal Services Board ends transitional arrangements, and the two institutes see the application as strategic, enabling both ABS and non-ABS IP firms to continue to be regulated by the same regulator.
The scoping document, prepared by consultant Sarah Willison, raises various issues that need to be addressed in preparing the application to become a licensing authority, such as whether to retain the 75% r
equirement, the extent to which IPReg needs to change its rules to reflect a more outcomes-focused approach, and how IPReg can meet the statutory requirements for compensation arrangements, given that the mutual indemnity scheme currently operated “does not appear to meet in full the requirements” of the Legal Services Act.
Alasdair Poore, a partner at regional law firm Mills & Reeve and immediate past president of CIPA, said the move would help both IP businesses like Murigtroyd that have created “a coherent business strategy around funding”, and small practices with family shareholdings.
He added: “It also provides the opportunity to put in place firms that are more vertically integrated in the services they offer.” By delivering additional services such as investment and marketing advice, a single firm would be able to take a business “from bench to market”.
Mr Poore predicted that ABSs would get off to a slow start in the sector – given that external investment has been available for many years – but said they do raise “some quite interesting opportunities”. The one that stands out, particularly for patent attorneys, is forming ABSs with European patent attorneys, he continued.
Keven Bader, chief executive of ITMA, said surveys had shown enough interest among practitioners in ABSs “to warrant us taking it to the next step”. ABSs offered increased flexibility for firms “to broaden their scope of work and finance their activities”.
IPReg declined to comment.