• McCain Foods
• Dragon Plastics
• Gems TV Holdings Ltd
• i2r Packaging Solutions Ltd
• Kings College London
• Luxtaltek
• Medic-Aid Limited
• Peter Savage Ltd
• P&B Weir Electrical
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Gems TV Holdings Ltd

How we help our clients to protect and grow their business

Background

Gems TV is a manufacturer and retailer of genuine, coloured gemstone jewellery. The company specialises in manufacturing exclusive, handcrafted designs, selling to customers through a unique falling price, reverse auction system via television home shopping and the internet.

Employing more than 2,000 staff worldwide, they deliver exceptional value to customers by cutting out intermediaries in the traditional gemstone and jewellery supply chain.

The jewellery is sold via its two UK-based home shopping channels, Gems TV and Gems TV2, along with similar channels in other countries including the US. The internet and mail order are also used extensively to sell direct to customers.

Gems TV was founded in 2002 with the merging of two businesses. Its owners had an ultimate goal to grow the business by flotation on the stockmarket, while realising some of its value for personal gain.

The issue

As the business grew, so did its infrastructure, with call centres, a website and product lines being established and developed; however, with the explosion of TV shopping channels, it became apparent that the business was potentially vulnerable to challenges from competitors' intellectual property rights (IPR). Furthermore, the possibility existed that a copycat competitor could set up a similar operation, based on their reverse auction system of selling, apply for a patent for the system and then begin legal proceedings against Gems TV on the grounds of infringement.

In fact, it was discovered that a competitor had already filed a patent application and the company was concerned that this could adversely affect their planned IPO (public flotation).

The solution

In an effort to overcome these concerns and satisfy possible investors, Withers & Rogers were invited to carry out a due diligence exercise. Thorough research led to the discovery of a complete family of patent cases owned by a competitor. The next step was to check whether the cases were in force, establish how close to grant they were and, importantly, understand how narrowly or widely defined they were.

Throughout this process, we took care to understand Gems TV's business in detail; this meant that, once the analysis had been completed, we were able to issue a ‘freedom to practice' opinion, suggesting that there appeared to be no infringement.

We also made recommendations on minor design changes to their selling system in order to further reduce the threat of infringement and strengthen the "opinion" and were able to evaluate a number of different options with the management team. A patent watch was also established to monitor external activity that might affect Gems TV's business and the IPO process.

The outcome

The successful IPO generated sufficient funds to enable a launch in the US and several other countries, and enabled the owners to realise some of the value of the business for personal gain.

On-going support

A new concern then emerged; given that Gems TV had still not patented its system, the business was vulnerable to a competitor filing its own patent, prior to the launch in the US. Withers & Rogers helped resolve the situation by drafting, applying and ultimately receiving the grant of a patent which served as a deterrent to others hoping to break into the market place.

What the client says

"From the moment of engagement, Withers & Rogers' role was invaluable. Without the due diligence report, we would not have been able to convince investors to come on board; the proof that our IP was protected gave them the reassurance that their investment was secure. Withers & Rogers worked quickly and showed that they were commercially astute. They remain a key supplier for us."

Chris Lawton, UK Head of IT, Gems TV