The Intellectual Property Regulation Board (IPReg) will apply this year to become an alternative business structure (ABS) licensing authority, it has emerged.
Having unveiled its plans shortly before Christmas, IPReg has published a timeline saying that following a consultation this summer, it will seek designation as a licensing authority in October.
The Legal Services Board has a year to decide on such applications – extendable to 16 months – but IPReg hopes to have approval within around six months so that the parliamentary process can then be completed and it can begin accepting ABS applications from the start of 2014.
ABSs are seen as offering increased flexibility for IP firms to broaden their scope of work and finance their activities.
If approved, it will join the Solicitors Regulation Authority and Council for Licensed Conveyancers as ABS licensing authorities, with the Bar Standards Board also planning an application for advocacy-focused ABSs. Longer term ILEX Professional Standards and possibly the Institute of Chartered Accountants in England and Wales are eyeing up applications as well.
The Chartered Institute of Patent Attorneys (CIPA) and Institute of Trade Mark Attorneys (ITMA) – both of which are regulated by IPReg – have signalled their support for the application, which is expected to cost around £130,000 to prepare, plus Legal Services Board fees.
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.
Alasdair Poore, a partner at regional law firm Mills & Reeve and past president of CIPA, told Legal Futures last year that the move would help both IP businesses like Murgitroyd 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”.