Increasing numbers of patent and trademark firms can be expected to join the swathes of legal entities becoming alternative business structures (ABS) after their regulatory body won the support of the Legal Services Board (LSB) to become an ABS licensing authority.
In one of three significant recommendations made this week by the LSB to the Lord Chancellor, the regulatory body recommended that the Intellectual Property Regulation Board (IPReg) – the joint regulatory body for the Chartered Institute of Patent Attorneys and Institute of Trade Mark Attorneys – be awarded ABS licensing authority status, meaning patent and trade mark firms will be able to operate as ABSs under IPReg’s governance.
In a ‘decision notice’ published on its website, the LSB said that it is ‘satisfied that IPReg is competent and has sufficient resources in place,’ adding: ‘It has already demonstrated its capability as an approved regulator and has researched and planned for additional resources to fulfil its role as a licensing authority.’
Under IPReg, trademark and patent attorneys have for some years been able to have up to 25% external ownership but provisions under the Legal Services Act 2007 will lift any such restrictions.
A spokesperson for IPReg said: ‘IPReg supports the notion of a competitive legal services market and IPReg has not historically put a barrier on external ownership of patent attorneys and trademark attorneys so it seemed entirely sensible, with the full support of the profession, to be designated as a licensing authority.
‘For patent and trademark firms becoming an ABS, the big difference will be the degree of external ownership and management because the Legal Services Act puts no constraint on that.’
Patent and trademark firms can currently apply for an ABS license from the Solicitor’s Regulation Authority (SRA) however, if IPReg is granted licensing authority status, it is likely streamline the process for patent and trademark ABS firms.
It is now up to the Lord Chancellor to make a decision, although the time frame is unknown, dependent upon the parliamentary timetable.
If designated as a licensing authority IPReg will become the third body with such powers alongside the SRA and the LSB.
The decision comes as the LSB is also expected to announce this week whether the Institute of Chartered Accountants in England and Wales (ICAEW) has been successful in applying to become a regulator of probate services and an ABS licensing authority and whether the Chartered Institute of Legal Executives will be able to grant members independent rights to conduct conveyancing and probate.