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Murgitroyd out to make its mark on US patents business

IT IS often remarked the majority of American citizens do not travel beyond their own borders.

The same might also be said of patents for intellectual property secured in the United States.

Ed Murgitroyd, deputy chairman of Glasgow-based trademark attorneys Murgitroyd and Company, said very few patents ultimately make it across the Atlantic, in spite of a quarter of applications for European patents being generated in the US.

It is the main reason the company set up a bridgehead in Durham, North Carolina in 2008.

Mr Murgitroyd, son of company founder and chairman Ian Murgitroyd, said the aim was to build on the "robust" presence it already commanded in the market.

"Even 10 years ago, 13 per cent or 14 per cent of our turnover was in the US," he said. "It's always been a market.

"If you were to visit any European patent attorney, anywhere in Europe, they will always have a US client base, and it will probably be double digits."

Speaking in the firm's Scotland Street office, Mr Murgitroyd, a UK and European patent and trademark attorney, said he understands why American clients have traditionally been reluctant to take their patents worldwide.

This has partly been down to cost, but equally it's because he detects a "fear of the unknown in these foreign jurisdictions, that even US lawyers are nervous of".

However Mr Murgitroyd, who is based in North Carolina, insists attitudes are gradually changing.

With the US now accounting for a third of the firm's sales, the cost for an American client to take its patents global is "no longer excruciating".

And the company, which expects pre-tax profits to come in at not less than £4million for the year ended May 31, is gearing up to do a lot more business in the States in future.

The surge in the number of patent filings in California, many connected to the high-end electronics and pharma-ceuticals sectors, convinced the company to open a base in San Francisco.

Its team on the west coast has recently been expanded with the recruitment of a senior sales executive and the relocation of a European-based member of staff.

Mr Murgitroyd acknowledges that America does not manufacture as many physical products as it used to, but it remains very much a hotbed of idea generation.

He said: "You watch the State of the Union address year after year, and IP (intellectual property) is pretty much mentioned every time.

"But what you do know is that China is making the most of their stuff, so what's left? In my opinion, what is left is the intellect. If you look at Apple (it's) designed in California, made in China.

"China is becoming a much better partner in that arena."

For all the potential the market has to offer, Mr Murgitroyd accepts it has and will continue to be a slow burn to build the practice in the States, where its market share is still "infinitesimal".

The company's strategy is to make the process of gaining a European patent for US clients as simple as possible, whether that's by handling transactions in dollars or employing local staff.

Mr Murgitroyd, who joined the firm from university in 1997, said a willingness to invest long-term was needed to "convert opportunities to revenues," and is content his firm is taking the right approach.

He noted: "The thing that makes me very comfortable is that I know that even if our biggest competitor showed up in America tomorrow and decided to open an office, I know what is involved in getting from A to B."

That Murgitroyd has adopted an international outlook can be traced to the influence of its founder, who always believed there was "a better way to do IP law".

Today, the company employs more than 230 staff across a network of 13 offices, with eight in the UK and six in other European cities such as Nice, Munich, Helsinki and Milan.

Chief executive Keith Young, who doubles as finance director and joined in 1995, said it was unusual for a trademark attorney practice to build up such an international presence.

This is partly because, in contrast to accountancy and law, where economic pressures have sparked consolidation, "there aren't external factors forcing change" in the sector.

"If you look at the IP profession today it is largely as it was 30 years ago," Mr Young said.

"It is still pretty fragmented. There are very few international firms."

That many firms have "reciprocal relationships" with practices in other countries, which allows them to spread the work for clients between their respective markets, has also removed the motivation for some to expand overseas.

It is not an approach that Murgitroyd favours. "We have just never really signed up to that methodology," he said. "We pick the attorneys that we think are the best (and) that give us the best prices, so quality comes first, compet-itive forces second.

"You don't really have that much leverage if you work with each other's client. That is not to say there is not some work going back and forth, but it's not a foundation we have built (upon),"

Mr Young said the desire to do things differently at Murgitroyd was the guiding factor behind the company's decision to incorporate in 1993 (which also remains atypical for intellectual property specialists), and then to float the company on the London Stock Exchange in 2001.

The aim of both moves was to help the company maintain a trajectory of steady and sustainable growth, noting there was no single objective behind the decision to go public.

While he said it is natural for a business to float once it reaches a certain size, he acknowledged that going public "fundamentally differentiated us, in that globally there are no other listed patented practices".

There were concrete benefits to the float, though. One was the opportunity to offer staff what Mr Young a more-credible share options scheme. Another was the chance to show to corporate clients that they understand some of the challenges they face in being a publicly traded company.

He said: "There is a sense that within our profession, we can uniquely say we do understand some of the pressures you face, because we too are a public company."

And there are some big changes for both the firm and its clients to get their heads around at present.

The proposed introduction of a unitary patent for the European Union (EU), which would mean a single patent would give holders protection across Europe, without having to file for patents in individual countries, is a source of ongoing debate.

Mr Young notes that, while the London Agreement will greatly reduce the cost as it removes the need to have patents translated into different languages, other issues have still to be resolved.

These centre on which governments generate the income from processing patent applications, and what the ramifications are for a patent holder in the rest of Europe if they are sued for breach of trademark in one specific country within the EU.

Mr Murgitroyd said: "From our point of view, we will go with whatever is best for our clients.

"And if there is an opportunity with a new system we will review it and see if we can get clients the best way forward."

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