The IP Value of Business Plans—Protection For The Entrepreneur

The England and Wales High Court recently explained that the elements of a business plan had to be analysed to support an award of damages for professional negligence against the defendant, Mr. Ball's former lawyers and those who failed to protect his interests in the subject matter of the business plan. Ball v. Druces & Attlee (a law firm) [2004] EWHC 1402 (QB).

A business plan is rarely thought of as being valuable because of the protectable IP rights contained and embodied in it. While such a plan is usually treated as confidential if disclosed through a non-disclosure agreement, it is usually considered as a vehicle to raise money and not as intrinsically valuable in its own right. The basis of the value of the underlying ideas in a business plan is rarely analysed.

Ball was co-founder of The Eden Project, an international award winning environmental tourist attraction near St. Austell, Cornwall England. He and his co-founder developed the concept of the project in a long business plan which was used as the basis for funding. Mr. Ball and his co-founder, Mr. Smit, were the originators of the name and logo for The Eden Project, which, at the time of the alleged breach of duty, had limited value and could have been superseded.

The business plan contained text and spreadsheets from accountants, architectural concepts from an award-winning firm of architects and a general structure from business structure advisors. The underpinning and concept originated from Mr. Ball and his co-founder Mr. Smit.

At an early stage of this project, Mr. Ball retained Druces & Attlee to protect his position and to help establish an appropriate legal entity so that funding could be received. Druces & Attlee established the Eden Trust, which was the eventual recipient of the funding, but did so without protecting Mr. Ball's legal position. In terms of rewards from the project, as a result of the formation of the trust, Mr. Ball's position changed from possessor of legal rights to a supplicant to the trust. See Lakeview Computers Plc v. Steadman (CA) (Unreported, November 26, 1999). Some two years earlier the High Court had specifically declared that the trademark rights belonged to the Eden Trust and not Mr. Ball personally (Jonathan Ball v. The Eden Project Limited & The Eden Trust Chancery Division - 11/04/01 - Laddie J.).

Under English trust law, on the founding of the trust, all of Mr. Ball's rights in the business plan vested in the trust, and his position...