Keeping tight control of your IP and other assets can help in tough conditions says Simon Trahair-Davies, partner at
These are challenging times for many in the mining and minerals industries. With commodity prices on a long downward trend, the pressure has risen for operators.
In just the last couple of weeks, for example, platinum producer Lonmin has announced a $2.2 billion (approximately €2 billion) loss for the year and launched a $407 million (€378 million) rights issue; BHP Billiton has said it is reviewing its iron ore production targets while its share price recently reached its lowest level since late 2008, and Belgian company Nyrstar, the world’s largest zinc producer, is reportedly considering a complete exit from mining and has announced a capital raising in a bid to bolster its balance sheet.
And, of course, the sector’s cousins in the steel industry are suffering much-publicised difficulties due to the falling price of steel, with the closing of the SSI plant on Teeside (north-east England) and the Caparo steel enterprise entering administration.
In such times, it becomes all important to make the most of what you do have, and make sure that you are clear about who owns the rights to what.
For all operators, large or small, R&D could be significant, and you are likely to have talked to your accountant about the credits available for it and the benefits that can be sought by use of effective tax planning.
As a rule of thumb, when you find yourself talking to your accountant about R&D, you should also be talking to your lawyer about Intellectual Property (IP). The IP of a business that conducts R&D of any kind will be pivotal to its future success: it is the ability to harness those intangible assets and put them to work for a profit that makes the company successful.
Less obviously, but equally importantly, it is those businesses which rely on the IP of others that should consider the implications of not fully understanding the way in which intangible assets are held, controlled and used.
For example, if your business uses hardware to collect data across a quarry or site, and then a suite of software to analyse that data and produce reports, who owns the outcome: your business, the hardware manufacturer or the software developer? These issues are much easier (and more cost-effective) to resolve at the outset of a relationship but you need to be clear on the contracts between your business and third parties to ensure you are not getting a raw deal, or worse, giving away your own rights unknowingly.
Regardless of whether your business is at the cutting edge of innovative technology or putting the tech of others to good use, one key area that has become pervasive is online reputation management. Cyber attacks are becoming more and more widespread across industries, with TalkTalk the most recent high profile example.
Existing and potential customers (and competitors) will review your business by the most easily accessible format: your website. Every business should take steps to ensure that its site is secure and that it has the correct legal documentation present to limit its liability in the event of an attack from a third party.
That same documentation should also provide compliance with the relevant data laws and, as an added extra, also offer a way to seek legal redress against anyone who uses text or images from your site without your permission.
Maximising the R&D support available to you, and ‘locking up’ your IP and online assets, won’t change the hard economics of falling commodity prices. But at a time when the going can be tough, it will at least give you a little help around the edges.
Simon Trahair-Davies is a partner in the mining and minerals team at Stephens Scown LLP in the UK. The firm has more than 70 years’ experience representing mining and minerals clients and its specialist team has recently been recognised once again by independent guides to the law Legal 500 and Chambers.
Simon can be contacted
on +44 (0)1872 265100 or email <%$Linker:
