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Protecting Intellectual Property

Intellectual property is the core of many businesses these days. But what exactly is IP, and how can you identify, protect, and maximise its value? Tony Ward looks at these issues and the crucial aspect of timing—when it is too late or too early to protect intellectual property.

Active ImageIntellectual property (IP) is an umbrella term covering a range of exclusive legal rights. The common thread is that they all relate to creative products of the mind, but are protected by law and transferable in much the same way as physical or ‘real’ property.

For some companies, especially those working with emerging technologies, the majority of their worth may reside in their patents. For others, it may be in their trade marks and brands, or in the unique design elements in their products. Often it’s a combination of mutually supportive IP rights.

Whether your company is established or just launching, you should have an IP plan that identifies, protects, and capitalises on those things you do or create that give you a competitive advantage. This can be as simple as the company logo (registered as a trade mark) or as complex as a business process that could be patented and licensed to others. You should instil a culture within the company that recognises and values invention and innovation, and your IP strategy should be properly aligned with your wider commercial objectives and plans.

You must ensure that, should your monopoly right to any IP be challenged, you have all the proof required to show that it is rightfully yours. Because invention is so heavily based on ideas, many inventive people don’t fully realise that information or ideas in their mind count for nothing should litigation begin. Companies must have a policy of record keeping that captures both the detail and the chronology of their inventions, designs, brand creations and product developments. Copyright applies to a wide variety of subject matter including computer programs, technical drawings, brochures, marketing materials, catalogues, client lists, market research and the like, so it is important that proper record keeping disciplines are applied in this context also.

To be patentable, an invention must be both new and non-obvious. However, you usually won’t know whether yours is until you have undertaken a thorough search. Patent and trade mark attorneys know where to search and how to evaluate what may appear to be similar to prior publications or inventions.

For important research projects, products or brands, searching can be crucial in order to understand the prevailing IP landscape. The last thing you want is to go to market with a new product, service or brand, only to find you are infringing the IP rights of others.

IP Protection Forms

With numerous types of IP protection available, a key element in IP protection is choosing the right form/s for you. The type of protection you take out will vary according to the nature of your products or services, the nature and geographic footprint of your business, and often the activities of your competitors in particular markets.

It takes many people to bring an invention to technical and commercial fruition. Employees work on it, and may in the early stages involve colleagues, friends or family. External consultants may also be involved at various stages including concept validation, industrial design, prototype manufacturing, and market research. Companies must ensure that issues of IP ownership are clarified at the outset through such means as confidentiality agreements and IP ownership agreements with staff and any other parties involved.

Patent attorneys in Australia are often confused with lawyers. They are not the same, although some patent attorneys are also qualified as lawyers. A patent attorney is someone with a science or engineering degree who has undergone specialist legal training and qualification in the field of IP. When looking for a suitable patent attorney, you should investigate their specific fields of qualification and expertise to ensure they will understand your invention and how best to protect it. You can locate the best attorney for your business via the IPTA website at www.ipta.org.au.

After filing your patent application, you will have 12 months to consider other countries and markets in which you may wish to file. Each country has its own laws, procedures, and cost structures. Some will present greater market opportunities than others. You should undertake an objective analysis of the cost/benefit of applying for patent protection on a country-by-country basis. In some instances it may be better to spend the money on developing and promoting a new product in a primary market, rather than obtaining protection in additional countries where you may have little or no chance of commercial success.

Your invention may become an initial success, but in many cases it is the further development of the original idea that will give it wider or prolonged success. You should carefully monitor the development process and discuss it with your patent attorney if it moves outside the scope of the disclosure in the original patent application.

Most companies will be aware of the need to monitor their competitors. Doing so will provide early intelligence on products that may be similar to your own, and may also give insights into future competitive plans. A patent attorney can assist you in monitoring your competitors’ IP activities, to provide additional insights into their current research directions, as well as highlighting deadlines for opposing the grant of patent or other rights to competitors, where appropriate. These monitoring activities and related searches can provide a valuable source of technical information as well as revealing potentially valuable licensing opportunities.

Disclosing Information

Of all the points in this article, the one I feel most strongly about is the timing of announcements about an invention. In essence, it is through the timing of announcements that companies can make or break their competitive edge. Everyone understands the phrase ‘perfect timing’–that is, knowing exactly when to do something to gain the maximum benefit or effect. And in business it’s knowing when to disclose company information that will give your company a competitive advantage, here and in international markets.

Innovations in business and industry deliver such competitive advantage, and many within organisations want to disclose as much as they can, as soon as they can, about new products or processes. This urge to disclose can come from aggressive marketing departments wanting to get the jump on competitors. It can also come from a company’s investor relations people wanting to impress markets with results from research and development.

High-tech industries often fall into this category, where the value of the company is heavily based on its IP portfolio and they are eager to let investors know what they have in development.

The danger is that poorly timed disclosure of an invention or innovation can ruin a company’s chances of being granted valid patent protection for it.

Most inventors and IP managers understand that details of an invention should not be published before a patent application has been safely filed. This is the golden rule, although there are certain circumstances in which this rule can be bent, provided sufficient care is taken.

Applying for a patent usually begins with the filing of a provisional patent application. This establishes a priority date for the invention, and sets a 12-month deadline for filing corresponding applications in foreign jurisdictions. However, even before the priority date is set it is possible to publish a limited amount of information about your invention, so long as you are careful in exactly what you say about it. This means you must be absolutely certain that you avoid providing what is termed an enabling disclosure of your invention. Ask yourself: ‘Does what I am about to publish contain sufficient detail that it would allow a person of ordinary skill in the relevan
t field to put the invention into practice?’ If it does, the validity of any subsequently filed patent application will be in jeopardy.

Some inventors and innovative companies understand this principle and endeavour to disclose only enough about inventions and innovations to gain some interim advantage without disclosing any enabling information. They also make sure that if they are going to include any enabling disclosure, any magazines, technical or educational papers that may carry the details have publishing deadlines beyond their patent filing date.

In the past, this strategy has always carried some risk because it is often not clear what minimum level of disclosure might be sufficient to enable a person skilled in the relevant technology to understand the concept and put it into effect without the need for further inventive input. Even a shadow of doubt in this context may provide sufficient basis for competitors to challenge the validity of a subsequently filed patent, even years down the track when its commercial value has become apparent.

However, the strategy is even riskier today because many publishers now supplement their hard-copy publication with an email version, many of which are circulated well in advance of the hard-copy issue. And while a hard-copy version may circulate only within a country, a state, or even a campus, the email version may go geographically much further afield, possibly to countries where you intend to later seek protection for your invention.

Another publishing aspect that can jeopardise your patent application is in thinking that once you have your priority date, you can publish details about further developments to your invention that take place within the 12 months following your provisional patent application. This is not necessarily so. If you deem it advantageous to disclose or commercialise details about further development, you may well need to file a further provisional application specifically to cover those developments. Indeed, many companies do this, compiling all of their separate provisional patent filings into a single complete application at the end of the initial 12-month period.

Often, this strategy allows companies to have multiple ‘perfect timings’, disclosing details of an invention’s progress to customer or investor markets at key times within the development period.

Many companies and individuals, in the race to be granted a patent before their competitors, file too early. The danger in filing early is that the invention may still be in a quite conceptual stage, more in the nature of an idea, with insufficient development to include an enabling disclosure that shows how the idea can be put into practice. If this is the case, and the provisional specification is inadequate, then any public disclosure or commercial use of the invention even after the filing date of the provisional application may compromise the validity of the any subsequently granted patent.

Conversely, waiting too long to file leaves the door open to others to beat you to a patent.

Patent attorneys advise clients on the timing and drafting of patent applications, enabling disclosures, and other aspects of patent law, not just for local jurisdictions, but for foreign jurisdictions as well. For further information visit the Institute of Patent and Trade Mark Attorneys of Australia (IPTA) website at www.ipta.com.au

* Tony Ward is president of the Institute of Patent and Trade Mark Attorneys of Australia.


IP Ideas in Action

Dynamic Business recently attended the Trading Ideas symposium held in Sydney to air the latest trends and advice from leading IP experts across the Asia-Pacific Economic Cooperation (APEC).

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An Australian government initiative, the symposium provided insights into the changing regional IP environment, and what it means for business and trade in the Asia-Pacific.

A clear message delivered throughout the event was that the development of ideas and innovation is crucial to the prosperity of businesses and our economy. But, as innovation is increasingly fostered, protecting IP has become more crucial than ever.

While this is positive in many aspects, the increase in demand for IP protection around the world has put significant pressure on IP registration offices, which has the detrimental effect of delaying application processing, opening up opportunities for IP infringement in the meantime.

Many speakers called for collaboration between nations as well as an increase in IP law enforcement to help combat this. In his opening address, Attorney General Philip Ruddock called for a "harmonisation of IP laws across APEC", in order to collaborate and meet IP challenges. He also believes a higher level of IP protection and enforcement will enable increased trade liberalisation and business investment throughout the region.

The IP environment has evolved in recent times, mainly thanks to significant advances in technology. Dr Francis Gurry of the World IP Organisation recognised that the digital age has made ‘copying’ easier than ever before, giving rise to the need for businesses to have IP protection.

Michael Williams from Gilbert & Tobin lawyers said in his presentation that as internet speeds increase and wireless networks widen, the incidence of IP infringement is likely to increase also. To address this, he suggested providing a legal framework for online protection is "the single most significant step to copyright protection".

Gurry also stressed the need for a more uniform approach to IP law globally, especially given the increasing demand in IP from North-East Asia (mainly China)—something Australian businesses need to be wary of, in terms of remaining competitive both locally and abroad.

Jon Dudas from the US Patent and Trademark Office said successful IP protection around the world "will come from a collaboration between governments, as well as between business and governments".

Jorge Amigo from the Mexican Institute of Industrial Property added in his presentation that more regional and free trade agreements would contribute to harmonising and strengthening IP standards.

Representatives from private companies (large and small) presented their companies’ strategies around IP protection, and its importance given increasing competition in their respective markets. Jari Vaario from the Nokia Group explained that the Nokia IP portfolio was made up of numerous trade marks, patents and designs, to ward off competitors and maintain the value of the Nokia brand. He also advised, given the growth in China, innovators should definitely consider filing patents in that country as well as Australia.

Marina Yastrebroff from Bluescope Steel had this key message for attendees: "If you merge your corporate strategy with your IP strategy, you can improve your bottom line." She said Bluescope works on solutions ahead of the need for them, and advises other Australian businesses do this to remain competitive.

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Comments from Kevin Inkster, founder of Arbortech, a small Perth-based business, were of particular interest. Among other innovative products, Arbortech designed and developed the world’s first Airboard, first featured at the 2000 Olympic Games opening ceremony. Arbortech realised that a Chinese company released the first copy of the product last year, and Inkster’s main response to this was, "the best way to stay ahead of copies is to have the best". But he also has a serious IP strategy which enforces patents and designs in target markets; licenses distributors to enforce rights; involves more use of registered designs; redesigns and improves products; improves pat
ents; and takes out IP registrations in China.

In a later session on valuing IP, Suzanne Harrison of LECG said businesses should stop thinking of their intangibles (IP) as assets and begin to think of them as "generators of value streams". Consequently, she said, businesses should "start thinking of intangibles as entries on an income statement, not as items for the balance sheet".

For more information about presentations from the symposium visit http://www.tradingideas.org

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