Defending its patents in David and Goliath battle costs innovator dear

From post-it notes to cat's eyes, a simple invention can net a fortune for its creator. But David Instance, chairman and chief executive of Inprint Systems, has spent millions defending the rights to his patented design, the extended text label which folds out like a concertina, allowing companies such as Glaxo Wellcome and Monsanto to display legally-required information on their packs without destroying the visual appeal of their product.

Mr Instance, who set up his privately-held business in 1963, has been involved in five patenting actions in the past 10 to 15 years. Inprint has been successful in winning four out of the five cases.

But Mr Instance says the group spends up to 15 per cent of its £45m-a-year turnover on defending its intellectual property, which has been appraised at about £46m and which comprises 524 patents registered in 45 countries.

"Defending our patents is an ongoing thing. Although imitation is flattery, it is also a form of stealing. I don't think it's appropriate for us to hold up our hands and let go," says Mr Instance. Inprint is currently involved in a series of David and Goliath-like cases, including the biggest ever pan-European injunction against Merck, Sharp & Dohme, the Dutch pharmaceutical giant. All of MSD's subsidiaries have been named in the case and DND, the company whose printed labels for MSD allegedly infringed Inprint's patents, last week gave an undertaking that it would not infringe Inprint's trademarks in the future. The case continues.

Inprint has recently won a similar undertaking from Scotts, a US horticultural company, and the two groups negotiated a settlement out of court. The UK group is also in negotiations with Roche Products, a pharmaceutical company, and is expected to reach an agreement in the next six to nine months.

Mr Instance says he has "several other cases in the pipeline, which will involve some of the biggest names in Britain both in terms of manufacturing and retailing". International cases are harder to defend, because of the lack of harmonisation between laws in different jurisdictions.

Although he acknowledges that his company is "on the defensive" when it comes to promoting its products, Mr Instance denies that he is simply being litigious. He says: "Patents have a bad image today. People tend to think they give businesses an unfair advantage in the marketplace. But we don't use them to knock people on the head. Patents encourage others to develop new products. They stimulate and drive the whole sector."