Shares digital

Patent and trade mark attorney Murgitroyd (MUR:AIM) should unveil a new acquisition within the next week as it continues to benefit from growing demand for European intellectual property services.

Chief executive Keith Young refused to disclose details of the purchase, but indicated that a key reason behind acquisitions is to add more qualified attorneys to the group.

New legislation from May will change the patent market. France recently signed up to the London Agreement – a scheme which reduces the requirement for companies wanting a European patent to translate documents into a local language, as long as the original is in either English, French or German. Only the executive summary will need translating. Young believes corporates will shift the money saved from needing less translation into core patents – Murgitroyd’s main line of work.

The Agreement, however, is also likely to have its losers, and patent translation specialist RWS (RWS:AIM) believes it will reduce its pre-tax profit by £2 million per year from 2009. To compensate, it is investing for growth in other parts of its business. It has paid £6.8 million for a German technical specialist to boost its non-patent translation operations, which currently account for 14% of group earnings.

Shares says: Murgitroyd continues to trade strongly and the legislative changes are a positive to its business. RWS already has the risks priced into its stock.

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by: Dan Coatsworth