Registered and Licensed Bodies
IPReg authorises both registered and licensed bodies. PReg became a Licensing Authority on 1 January 2015 pursuant to the Legal Services Act 2007 ("LSA").
Chapter 3 of the Core Regulatory Framework specifies the requirements which must be met for a firm to be regulated by IPReg as a registered or licensed body.
Registered bodies are wholly owned and managed by patent attorneys, trade mark attorneys and/or other authorised persons such as solicitors or barristers. Licensed bodies are alternative business structures (ABS) that have at least one non-authorised manager, owner or partner.
Registered and licensed bodies authorised by IPReg are entered onto the Register of Patent Attorneys, the Register of Trade Mark Attorneys or both registers.
It is a criminal offence for any person or practice to provide reserved legal activities unless authorised to do so by a legal services regulator (s14 LSA). The full list of reserved legal activities is set out at section 12 of the LSA.
IPReg is permitted to regulate the following reserved legal activities:
- the exercise of a right of audience;
- the conduct of litigation;
- reserved instrument activities; and
- the administration of oaths.
IPReg cannot advise whether or not a particular activity falls into the definition of “reserved legal activities”. If in doubt, you should obtain legal advice.
Whether an attorney practice needs to be licensed under the LSA (as opposed to being registered under the Copyright, Designs and Patents Act 1988 and/or the Trade Marks Act 1994) depends on who manages and owns the practice and whether it is an ABS.
Under the LSA, a body is an ABS if a non-authorised person (s111 LSA) is either a manager (a director, member or partner as applicable – s207 LSA) of that body or has an interest (holds shares or is entitled to exercise, or control the exercise of, voting rights) in that body (s72 LSA). Only regulators designated as a “Licensing Authority” by statutory instrument can license ABS.
European Patent Attorneys and European Trade Mark Attorneys fall within the definition of non-authorised person, so ownership or management of a body by such persons will mean the body is an ABS and will need to apply to become licensed if it intends to carry out reserved legal activities.
As part of a licensing application, non-authorised persons (including corporates) with a material interest must be approved. A “material interest” is defined at Schedule 13 of the LSA. It can be a complex issue as it covers both ownership and management rights; however, in summary, it is either:
- an ownership interest of 10% or more (directly or indirectly) in the practice; or
- another interest (whether through ownership or management) that allows a “significant influence” over the practice.
Applicant practices must consider all rights and interests of Managers and Owners so that they may determine material interests that require approval under the LSA.
In assessing “significant influence”, Schedule 13 sets out that they must assess whether the non-authorised person:
- can impose directions on the operating or financial policies of the applicant practice or a parent undertaking (including, for example, by any articles of association or a control contract);
- has an unqualified right to appoint or remove the majority of directors of the applicant body or a parent undertaking; and/or
- has any right of veto or are otherwise able to have dominant influence in respect of the exercise of voting power in the applicant practice or a parent undertaking.
A licensed body must have a Head of Legal Practice and a Head of Finance and Administration and they must be approved by IPReg before the firm starts trading. For more information, see the tabs to the left.
A licensed body must have a practising address and be domiciled or have a real and effective industrial or commercial establishment, in England or Wales. For entry onto the patent register, at least one manager or partner must be a registered patent attorney. For entry onto the trade mark register, at least one manager or partner must be a registered trade mark attorney.
The managers and partners (including corporates) of a registered body may be registered patent attorneys, trade mark attorneys, or solicitors and barristers regulated by an approved regulator. For entry onto the patent register, at least one manager or partner must be a registered patent attorney. For entry onto the trade mark register, at least one manager or partner must be a registered trade mark attorney.
A registered body must have a practising address and be domiciled or have a real and effective industrial or commercial establishment, in the United Kingdom.
A registered body need not have a Head of Legal Practice or a Head of Finance and Administration, but we are increasingly seeing firms appoint a named compliance or risk officer to carry out these roles and take responsibility for regulatory (including AML) obligations.